Social capital and Economic Development

Social capital encompasses systematic informal values, established norms, rules and commitments that facilitate and increase efficiency of the relatiouships amongst the members of a society and expand the capacity of the society to achieve certain goals. The social capital can compensate some of the inefficiencies of the government and the market. Beside of the government and the market institutions (and not as their substitute), the social capital can regulate human beings interrelationships in the realem of economy and facilitate economic development. In this study social capital indicators for thirty three countries are studied and the results show that the distribution of the social capital follows a specific pattern that makes economic situation predictable. The richest countries in terms of the social capital have the most flourishing economies. Therefore, it can be said that social capital accumulation plays a crucial facilitator role in the economic development process.