Social Capital and Economic Performance: Comparative Analysis of Iran's Provinces

The purpose of the present article is to examine the relationship between social capital and the economic performance of Iran analytically and experimentally. The theory of this study is. Besides the other factors like physical and human capital, social capital (taken as mutual trust among people and economic units) is an important factor that could help define the differences in the economic growth of the regions. Based on such viewpoint, trust is regarded as "belief in people's ties to their commitments in economic-social interactions". In reality, such beliefs would facilitate the establishment of interactions and transactions. First, a theoretical framework has been presented to demonstrate the positive impacts of social capital on economic growth, and this relationship was tested in an experiment that was conducted in 2001 among the different provinces. For this reason, through using the data of the 28 provinces, the relationship between trust (specific and general trust) and economic growth was examined. In order to analyze the impact of trust (trusting the various economic-social groups) on economic growth, the social-economic groups which came under the "general trust" category were divided into three sub-categories: legal, social and economic authorities. The impact of each of these sub-categories on economic growth was separately examined. The results indicate that the impact of general trust is more intense and its significance level is much higher. Also, the division of general trust into the three sub-categories of legal, social and economic authorities has helped define the significant differences among the provinces in justifying changes in the economic growth. Trust in economic and legal authorities had a higher impact on the economic growth of the provinces.