Social Capital

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Social Capital

      A broad definition of social capital describes it as a resource which focuses on social relations that have productive benefits. This does not always mean economic benefits, even though social capital can have a direct effect on economic capital. The various definitions of social capital stem from its highly context specific nature and complex operationalization.

When defining social capital, it is important to understand that by selecting an existing/exact definition from the literature, your doing so may limit the application and understanding of the concept. For those studies that discuss social capital, it is important to include its relation to the discipline at hand; that identification of operationalization in specific contexts provides a better understanding of what it means.  


Social Capital in Context

Other definitions describe social capital as the “connections between individuals and entities that can be economically valuable”[1]. A good way to demonstrate this is through the economic value that social capital has brought to enterprises like Airbnb and Uber. By harnessing  the power of social capital through peer marketing and public reviews for quality control, these companies have increased their market shares and become disruptive forces in more industries than just their own. Apart from the economic gains social capital can bring, it is also defined as “the web of cooperative relationships between citizens that facilitate resolution of collective action problems”[2]. Thanks to social media, the pro-democracy uprisings and social movements of the Arab Spring would not have been possible as well as the global discussion that resulted. The collective action that social media platforms encouraged, allowed citizens to cooperate and come together for a common cause[3]. This demonstrates how social capital is a powerful asset for growth and development, regardless of economic gains/losses.  

Further categorization between external and intern definitions of social capital can be found below. External refers to a focus on external relations among actors of different groups and internal refers to the internal relations among actors within similar groups. Examples[2] of such definitions are…

External versus Internal 


Definitions of Social Capital 

External/ Bridging/ Communal 


‘a resource that actors derive from specific social structures and then use to pursue their interests; it is created by changes in the relationship among actors’; (Baker 1990, p. 619)[16] . 

 Belliveau, O’Reilly, Wade 

‘an individual’s personal network and elite institutional affiliations’ (Belliveau et al. 1996, p. 1572)[17] . 


‘the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance or recognition’ (Bourdieu 1986, p. 248)[18] .’made up of social obligations (‘connections’), which is convertible, in certain conditions, into economic capital and may be institutionalized in the form of a title of nobility’ (Bourdieu 1986, p. 243)[18] . 

 Bourdieu Wacquant 

‘the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition’ (Bourdieu and Wacquant 1992, p. 119)[19] . 

 Boxman, De Graai. Flap 

‘the number of people who can be expected to provide support and the resources those people have at their disposal’ (Boxman et al. 1991, p. 52)[20] . 


‘friends, colleagues, and more general contacts through whom you receive opportunities to use your financial and human capital’ (Burt 1992, p. 9)[21] .’the brokerage opportunities in a network’ (Burt 1997, p. 355)[21] . 


‘the process by which social actors create and mobilize their network connections within and between organizations to gain access to other social actors’ resources’ (Knoke 1999, p. 18)[22]


‘the ability of actors to secure benefits by virtue of membership in social networks or other social structures’ (Portes 1998, p. 6)[23] . 

Internal/ Bonding/ Linking 

Brehm Rahn 

‘the web of cooperative relationships between citizens that facilitate resolution of collective action problems’ (Brehm and Rahn 1997, p. 999)[24] . 


‘Social capital is defined by its function. It is not a single entity, but a variety of different entities having two characteristics in common: They all consist of some aspect of social structure, and they facilitate certain actions of individuals who are within the structure’ (Coleman 1990, p. 302)[25] . 


‘the ability of people to work together for common purposes in groups and organizations’ (Fukuyama 1995, p. 10)[26] .’Social capital can be defined simply as the existence of a certain set of informal values or norms shared among members of a group that permit cooperation among them’ (Fukuyama 1997)[26] . 


‘a culture of trust and tolerance, in which extensive networks of voluntary associations emerge’ (Inglehart 1997, p. 188)[27] . 

 Portes Sensenbrenner 

‘those expectations for action within a collectivity that affect the economic goals and goal’ seeking behavior of its members, even if these expectations are not oriented toward the economic sphere’ (Portes and Sensenbrenner 1993, p. 1323)[28] . 


‘features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit’ (Putnam 1995, p. 67)[29] . 


‘those voluntary means and processes developed within civil society which promote development for the collective whole’ (Thomas 1996, p. 11)[30] . 

Both types 


‘naturally occurring social relationships among persons which promote or assist the acquisition of skills and traits valued in the marketplace. . . an asset which may be as significant as financial bequests in accounting for the maintenance of inequality in our society’ (Loury 1992, p. 100)[31] . 

 Nahapiet and Ghoshal 

‘the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit. Social capital thus comprises both the network and the assets that may be mobilized through that network’ (Nahapiet and Ghoshal 1998, p. 243)[32] . 


‘the web of social relationships that influences individual behavior and thereby affects economic growth’ (Pennar 1997, p. 154)[33] . 


‘the set of elements of the social structure that affects relations among people and are inputs or arguments of the production and/or utility function’ (Schiff 1992, p. 160)[34] . 


‘the information, trust, and norms of reciprocity inhering in one’s social networks’ (Woolcock 1998, p. 153)[34] . 


  1. Baker, W. 1990. ‘Market Networks and Corporate Behaviour.’ American Journal of Sociology 96: 589 – 625. ^
  2. Belliveau, M. A, C. A III O’Reilly, and J. B Wade. 1996. ‘Social Capital at the Top: Effects of Social Similarity and Status on CEO Compensation.” Academy of Management Journal 39: 1568 – 1593. ^
  3. Bourdieu, P. 1986. ‘The Forms of Capital.’ Pp. 241-58 in Handbook of theory and research for the sociology of education, edited by John G Richardson. New York: Greenwood Press. ^
  4. Bourdieu, P., and L. P. D. Wacquant. An Invitation to Reflexive sociology. Chicago: University of Chicago Press. ^
  5. Boxman, E. A. W, P. M De Grant, and H. D Flap. 1991. ‘The Impact of Social and Human Capital on the Income Attainment of Dutch Managers.” Social Networks 13: 51 – 73. ^
  6. Burt, Ronald. 1992. Structural Holes: The Social Structure of Competition. Cambridge: Harvard University Press. ^
  7. Knoke, D. 1999. ‘Organizational networks and corporate social capital.’ Pp. 17 – 42 in Corporate Social Capital and Liability, edited by S. M. Gabbay. Boston: Kluwer. ^
  8. Portes, Alejandro. 1998. “Social capital: its origins and applications in modern sociology.” Annual Review of Sociology 24: 1-25. ^
  9. Brehm, John, and W Rahn. 1997. ‘Individual-Level Evidence for the Causes and Consequences of Social Capital.’ American Journal of Political Science 41: 999 – 1023. ^
  10. Coleman, James S. 1990. Foundations of social theory. Cambridge: Harvard University Press. ^
  11. Fukuyama, Francis. 1995. Trust : the social virtues and the creation of prosperity. London: Hamish Hamilton. ^
  12. Inglehart, R. 1997. Modernization and post-modernization: cultural, economic and political change in 43 societies. Princeton: Princeton University Press. ^
  13. Portes, Alejandro, and Julia Sensenbrenner. 1993. “Embeddedness and immigration: Notes on the social determinants of economic action.” American Journal of Sociology 98: 1320 – 1350. ^
  14. Putnam, Robert D. 1995. “Bowling alone: America’s declining social capital.” Journal of Democracy 6: 65-78. ^
  15. Thomas, C. Y. 1996. “Capital markets, financial markets and social capital.” Social and Economic Studies 45: 1 – 23. ^
  16. Loury, G. 1992. ‘The economics of discrimination: Getting to the core of the problem.’ Harvard Journal for African American Public Policy 1: 91 – 110. ^
  17. Nahapiet, Janine, and Sumantra Ghoshal. 1998. “Social capital, intellectual capital, and the organizational advantage.” Academy of Management Review 23: 242. ^
  18. Pennar, K. 1997. “The tie that leads to prosperity: The economic value of social bonds is only beginning to be measured.” Business Weekly: 153 – 155. ^
  19. Schiff, M. 1992. “Social capital, labour mobility, and welfare: The impact of uniting states.” Rationailty and Society 4.

[1] “Social Capital”. Investopedia, 2016.

[2] “Definitions of Social Capital”. Social Capital Research 2016.

[3] Shearlaw, Maeve. “Egypt five years on: was it ever a social media revolution?” 2016.