A Study of the Impact of Out-group Social Capital on Economic Development in Iran's Provinces

In recent years, discussions on the positive results of social capital have become prevalent; in intellectual circles, it is called the missing link of development. This article defies the belief and assumes that there are different kinds of social capital and some kinds of it may have negative impact on development. Its out-group version which is based on the confidence of open groups and civil society can reduce exchange costs,expand confidence, and increase human capital only in certain circumstances with positive impact on the process of development. Also, it studies two different concepts of development in relation to social capital. The method of research is based on secondary analysis. To formulate constructs, various indices were selected from centers such as Statistical Center of Iran, Institute for Trade Studies and Research, National Survey ofIranian's Values and Attitudes, Vice-Presidency for Strategic Planning and Supervision, and some previous research and the hypotheses of research were tested by using AMOS software and model of structural equations. Statistical population is the whole of Iran and the unit of analysis is its provinces. Findings show that a negative correlation exists between outgroup social capital and development, so that higher out-group social capitalin a province leads to lower economic development in it. This intensifies as for the construct of second generation economic development.