Social Capital

• Social capital is neither material capital nor human capital. Thus neither refers to natural resources or human resources.
• The concept of social capital developed in USA in the 19th century. It refers to the social interaction & the social intercourse among people. It was developed by L. J. Hanifer and later on explained by Robert D. Putname. It refers to the collective of economic benefits derived from the preferential treatment & cooperation between the individuals and groups. It is based on the principle that social networks have value.
• Hanifer stated that social capital is the means to achieve the material & the tangible substances necessary for our development through goodwill, fellowship, mutual sympathy, & social intercourse among a group of individual who make up a social unit.
• Social capital is formed by the networking & the social cohesiveness or interaction with people working in various affairs.

Case Study of Italy

• In Italy, Northern & southern region both developed industries, but southern region had lesser growth rate than northern region because it lacked social capital. Here, social capital means awareness & conciousness of being a part of the social unit & demanding growth. Thus the current economic development are also questions of social awareness, interaction & social co-mingling.