Abstract

This paper investigates the relationship between social capital and economic growth. The three main aims of the paper are: i) to introduce a definition of social capital based on the concept of trustworthiness present in a community; ii) to elaborate a proxy of the concept of social capital considered; iii) to carry out an empirical analysis on the role of social capital in fostering economic growth. The paper is divided into five sections (including introduction and conclusions). The first section surveys the empirical literature about the effects of social capital on economic growth, with particular reference to the different proxies of social capital considered in this literature. The second section introduces a definition of social capital based on the concept of trustworthiness present in a community and briefly analyses, at a theoretical level, the relationship between this notion of social capital and the economic growth. The third section describes the variables and the methodology used to elaborate a social capital index in order to measure the level of trustworthiness present at a regional and provincial level in Italy. The fourth section empirically investigates the relationship between the social capital index and the GDP growth rate per capita in the regions and in the provinces of Italy. The two main findings of the paper are: i) the definition of social capital based on the concept of trustworthiness introduced in this paper has proved to be useful in investigating, in an original way, the impact of interpersonal relations on economic growth and, in particular, it has proved to be an original notion with respect to the definition of social capital proposed by Putnam; ii) an empirical relationship seems to exist between the level of social capital in terms of trustworthiness and economic growth at a regional and provincial level; the empirical results are robust to model specification and endogeneity.