The Role of Social Cohesion in Economic Development

Social cohesion is a type of relation that shows individuals, institutions, organizations and various executive groups in different levels are capable of working together, respect each other’s rules and the strategic decisions of the government are presupposed to be adopted from public opinion. Such a situation paves the ground for equal distribution of socio-economic, political opportunities as well as handing parts of decision-makings over to the society. According to institutional approach, different degrees of social cohesion mainly accounts for various achievements of different countries in establishing efficient institutions and gaining economic development. This study firstly calculates the social cohesion indicator in 82 selected developed and developing countries through the use of “social capital” and “distribution of opportunities” and then tries to estimate the effect of the social cohesion on economic development. Numeral taxonomy approach is used for economic development ranking while cross-sectional data regression is applied to estimate the effect of social cohesion on economic development. The findings indicate social cohesion has a positive significant effect on the level of economic development