Social capital, human capital and economic development: theoretical model and empirical analyses

Researchers have mainly concentrated on traditional types of capital (natural, physical and human) in explaining the process of economic growth and development. Yet, it is now widely recognized that social capital is the missing link in this process.

Social capital, as conceived by its promoters is intrinsically relational and can only exist within a pattern of relationships. The emphasis placed on social capital focuses on the way in which the economic actors interact and organize themselves to achieve goals.

This thesis follows the literature on social capital. Specifically, this research is an exploration of the impact of social capital on socioeconomic outcomes such as education and economic growth. It is argued that, at the aggregate level, social capital impacts economic growth through its effect on human capital accumulation. Precisely, the interaction between social capital and human capital and their joint effects on economic growth is formalized in a multisector endogenous growth model. It is showed that, in contrast to existing alternative specifications, this setting assures that social capital enhances productivity gains by playing the role of a timing belt driving the transmission and propagation of all productivity shocks throughout the society whatever the sectoral origin of the shock.

At the individual level, we investigated whether social capital is an independent variable that explains educational outcomes of children in developing countries. Fixed effects and instrumental variable models have been used to address concerns about heterogeneity and endogeneity. The results suggest that social capital in the family contributes significantly to improve children educational attainment. Furthermore, the positive effects of social capital on education are not short lived, they last for the long term.

The main contribution of this research is to provide a formal modelling of the important relationships between social capital human capital and economic growth. Another contribution is the extension of the empirical research on social capital effects on education in developing countries.