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The race for 'social capital' in the 21st century: Asia versus the Old World

The world's most advanced economies need to start worrying about 'social capital' - the degree of trust, cooperation and networking in their societies - according to new research by Marta Felis-Rota at the London School of Economics and Political Science (LSE). 

Over the past 100 years, there has been a significant decline in measures of the health of civil society in the West - notably in the UK, France and the United States - compared with Asian countries like Japan and India.

The study, presented at the Economic History Society's Annual Conference on Friday 8 April, proposes a new way of looking at an issue that has captured the attention of sociologists, economists and other social scientists: social capital.

What is new? International levels of social capital have now been estimated for the nineteenth century. The resulting series is called the Social Development Index (SDI), comparable to the Human Development Index (HDI). Just as the HDI measures the level of human development, the SDI measures the health of the civil society, what has been called social capital - the degree of networking, trust and cooperation.

The incorporation of the new SDI estimates for the nineteenth century reveals some interesting information. It allows for comparisons between countries over the long run, together with the existing estimates for the second half of the twentieth century. We can now observe both the evolution of social capital over time for a given country, and compare it with that of other countries.

There have been notable changes in the relative positioning of countries. Japan and India exhibit exceptional improvements in social capital between 1960 and 1980. These and other Asian countries have had an outstanding level of economic growth in the last decades.

Harvard professor Robert Putnam expressed his concern about the shrinking civic engagement in US society in recent decades in his bestseller Bowling Alone. The new study finds signals of decline of the civic values not only in the last 30 years, but also in the relative position of the United States, -and other advanced economies like France and the UK - in their social positioning compared with more than 100 years ago.

The study reports the underperformance of the most advanced economies with respect to social capital. Germany, Belgium and France score well below the Scandinavian countries and the Asian newcomers in levels of general trust among people. The results are particularly alarming for France, with only two-thirds of the level of trust in India and half of the level of trust in Japan.

The UK was the social development leader in 1870, but was losing its leadership as early as 1890. In fact, the UK position has worsened even further over the course of the twentieth century, especially against rapidly changing societies like India or Japan.

Why does this phenomenon occur? Why are French citizens seen by their fellow citizens as less reliable than Japanese see fellow Japanese? The phenomenon can be caused by a variety of reasons ranging from ethnical fragmentation of society to historical involvement in conflict. None of these arguments is as yet well established.

What is the bottom line policy recommendation? According to Marta Felis-Rota, the bottom line is a special emphasis on social policy in the most advanced economies. She comments: 'Of course, we cannot change the course of history, but fighting against social exclusion and for full integration of immigrants into civil society could potentially help to increase the feeling of togetherness and co-operation.'




Comparative Measurement of Social Capital in the 19th and 20th Centuries by Marta Felis Rota was presented at the Economic History Society's 2005 Annual Conference at the University of Leicester on Friday 8 April.

Marta Felis-Rota is a postgraduate student at LSE.

11 April 2005