A Survey of the Impact of Social Capital on Economic Growth in Iran

In general, social capital is collection of concepts such as, trust, formal and informal norms and networks which lead to optimum correlation and partnership between memberships of society. In this study, to identify the effects of social capital on the economic growth in Iran by using the Fucuyama index, factors such as ended dossiers of overdraft cheque and defalcation, and bribery per capita were used as substitutions proxy for social capital.We applied Microfit software and ARDL methodology to estimate augmented Solow model (MRW) that itself was augmented by Ishise and Sawada (2008) for the period of 1970 - 2006. Base on the results, shortrun and longrun coefficients in both models indicate adverse relation between reduction of social capital and economic growth in which the elasticity of GDP per capita toward overdraft cheques is -0.16 and for ended dossiers of defalcation, beribery is -0.06. Finaly, ECM coefficient in the overdraft cheques model is -0.79 and defalcation, beribery model is -0.86 which is significant and adjusted to steady state is highly. So in microlevel the friendly relation of parents with children and attention to their education as well as their acquaintance with religion and its instructions are necessary. Furthermore, macro - level suggests that the government against the extinctive factors for social capital act intensly and with creation of social security and conservation from the low land property and decreasing the rates of inflation and unemployment keep the peoples trust to government more than before.