Organizations and Markets

| Peter Klein |

Recent work by Robert Putnam, Douglass North, Ed Glaeser, and others has highlighted the role of social capital — membership in organizations, participation in civic activities, social trust — plays in economic development. Empirically, social capital has typically been measured with survey data, making historical comparisons difficult. It is important to know, however, how social capital changes over time. If social capital is largely path dependent, then there is little that can be done to improve the stock or productivity of social capital at a particular time.

A new paper by Marta Felis Rota, “Is Social Capital Persistent? Comparative Measurement in the Nineteenth and Twentieth Centuries,” exploits Adelman and Morris’s (1965) database of socio-economic indicators for 23 countries from 1850 to 1914 to construct social capital indicators for the late nineteenth century, which can be compared to similar indicators for the twentieth century. Evidence for path dependence is weak; all countries enjoy long-run increases in social capital but rates of change vary widely. Check it out.