ERD Working Paper No. 40
The Puzzle of Social Capital
A Critical Review
M.G. Quibria
May 2003
M.G. Quibria is Advisor, Operations Evaluation Department, Asian Development Bank. This note
is derived from a presentation at the ADB Institute in Tokyo on March 2002 on this topic. The
author would like to thank the participants of the seminar and Ernesto Pernia, Salim Rashid,
Syed Zahir Sadeque, and Juzhong Zhuang for helpful comments; to Cherry Zafaralla for
editorial assistance; and to Marilen Macasaquit, Dionisa Boro, and Gina Buenaventura for
research assistance.
Asian Development Bank
P.O. Box 789
0980 Manila
Philippines
2003 by Asian Development Bank
May 2003
ISSN 1655-5236
The views expressed in this paper are those of the author(s)
and do not necessarily reflect the views or policies of the
Asian Development Bank.
FOREWORD
The ERD Working Paper Series is a forum for ongoing and recently completed
research and policy studies undertaken in the Asian Development Bank or on its
behalf. The Series is a quick-disseminating, informal publication meant to
stimulate discussion and elicit feedback. Papers published under this Series
could subsequently be revised for publication as articles in professional journals
or chapters in books.
CONTENTS
ABSTRACT
VII
I.
INTRODUCTION
1
II.
DEFINITIONS OF SOCIAL CAPITAL: A CONFUSING MEDLEY
2
III. IS SOCIAL CAPITAL REALLY CAPITAL OR A BAD METAPHOR?
6
IV. TAUTOLOGICAL DEFINITION AND EXAGGERATION OF BENEFITS
8
V.
THE PROBLEMS WITH THE EMPIRICS OF SOCIAL CAPITAL
VI. CONCLUDING REMARKS
10
12
ABSTRACT
This paper provides a critical review of the burgeoning literature on
social capital, highlighting a number of serious conceptual and empirical
problems associated with this literature. First, the concept of social capital
remains largely elusive, with many different ideas attached to it. This
elusiveness has serious ramifications for empirical and policy analysis. Second,
while the concept of social capital is used to highlight the positive, productive
aspects of sociability, it fails in important ways to qualify as a form of capital.
Third, there are both theoretical and empirical presumptions to suggest that
social capital can to lead to undesirable socioeconomic outcomes. Finally,
a large body of empirical work on social capital remains mired in measurement
and estimation problems.
Here I learn to do a service to another,
without bearing him any real kindness; because I foresee,
that he will return my service, in expectation of another of the same kind,
and in order to maintain the same correspondence of
good offices with me or others. And accordingly, after I
have served him and he is in possession of the advantage
arising from my action, he is induced to perform his part,
as foreseeing the consequences of his refusal.
David Hume
Treatise of Human Nature (1740/1978, 521)
I. INTRODUCTION
S
ocial interactions matter. They create social networks, foster trust and values, sustain
norms and culture, create community, and influence economic and social outcomes. While
these ideas have antecedents in the writings of such diversity of earlier authors as Karl
Marx, David Hume, Adam Smith, Antonio Genovesi, Emile Durkeim, and Thortsen Veblen, they
have taken pride of place in the recent literature on social capital. The concept of social capital
has been applied to explaining a wide variety of social and economic phenomena, ranging from
the growth tragedy in Africa (Easterly and Levine 1997) to the mortality crisis in Russia (Kennedy
et al. 1998); from the successful group lending programs in Peru (Karlan 2003) to the flourishing township village enterprises in People’s Republic of China (PRC) (Weitzman and Xu 1994).
This concept highlights the importance of nonmarket social interactions to fill a lacuna in the
traditional neoclassical economic framework. It has been argued by sociologist Granovetter
(1985) that the neoclassical framework posits an “undersocialized conception of man” that
views man as atomized, anonymous, and bereft of any social influence through social relations.
In other words, the neoclassical framework ignores the role of nonmarket social interactions in
determining individual and collective behavior and shaping economic and social outcomes. In
the real world, there are many examples of how individual and collective behavior is shaped by
nonmarket social influences in the form of culture, norms, and social structure. An individual’s
taste for books, restaurants, and movies is often largely determined by what is considered
“hip.” Similarly, one’s educational aspirations, or decision to smoke or take drugs, or to have
children out of wedlock are all matters significantly affected by the behavior of one’s peer
groups, role models, and norms and values of the surrounding society.
While there has been a proliferation of the literature on social capital in recent years, it is
fraught with serious conceptual and empirical measurement and estimation problems. This
paper highlights some of these conceptual and empirical measurement and estimation problems that seem to have arrested the pace of progress of this literature. This paper divides these
issues into four broad categories. First, the concept of social capital remains largely elusive.
THE PUZZLE OF SOCIAL CAPITAL
A CRITICAL REVIEW
M. G. QUIBRIA
Different authors have attributed different meanings, leading to a wide range of conceptual
ambiguities. Second, in parallel with human and physical capital, this literature uses the metaphor of social capital to highlight the positive, productive aspects of sociability. However, in
some important ways, social capital falls short of being a form of capital. Third, the existing
literature emphasizes largely the positive consequences, eschewing the bad ones. There are
both theoretical and empirical presumptions that nonmarket social interactions can lead to
undesirable social and economic outcomes. Fourth, a significant body of empirical works in this
area remains mired in serious measurement and estimation problems.
The organization of this paper is as follows. Section II deals with the definitional aspects
and the confusions surrounding them. Section III addresses the question: Is social capital
really a form of capital? Section IV discusses the negative aspects of social capital that have
been largely ignored in the existing literature. Section V points to some measurement and
estimation problems that tend to threaten advances in the literature. Given the background of
this author, the empirical works that receive greater attention in this discussion are those from
economists. The final section offers some concluding remarks.
II. DEFINITIONS OF SOCIAL CAPITAL: A CONFUSING MEDLEY
Social capital has been variously defined by different writers. Sociologist Bourdieu, who
has provided an early exposition of the concept, views social capital as “the aggregate of actual
and potential resources which are linked to the possession of a durable network of more or less
institutionalized relationships of mutual acquaintance or recognition—or in other words, to
membership in a group” (Bourdieu 1986, 248). This definition highlights the network aspect
of social capital, i.e., the opportunities and advantages that accrue to individuals from group
membership. Bourdieu’s concept of social capital is essentially individualistic. In his writings,
Bourdieu focuses on the instrumental value of social capital in deriving economic and social
benefits from group membership and the impetus for individual investment in such membership.
An early reference to the concept of social capital in the economics literature is to be
found in the work of economist Glen Loury, who has provided an incisive criticism of the neoclassical theories of racial income disparity. Loury (1977, 176) argues:
The merit notion that, in a free society, each individual will rise to the level
justified by his or her competence conflicts with the observation that no one
travels that road entirely alone. The social context within which individual maturation occurs strongly conditions what otherwise equally competent individuals can achieve. This implies that absolute equality of opportunity … is an ideal
that cannot be achieved.
Loury’s main contention is that the traditional view on intergenerational income mobility
is highly misleading: it is based on a framework that is excessively individualistic and devoid of
social dimensions. A full understanding of the issues of intergenerational income mobility,
Loury argues, needs to be based on a framework that incorporates such factors as social net-
2
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works that influence one’s access to opportunities. And unequal opportunities in turn can lead
to persistent income disparities across ethnic groups. In other words, the orthodox economic
theories that focus merely on creating a competitive market for individual human capital without consideration of social networks would be inadequate to address issues of persistent racial
income disparities. In a recent paper, he further notes:
Individuals are embedded in complex networks of affiliations: they are members of nuclear and extended families, they belong to religious and linguistic
groupings, they have ethnic and racial identities and they are attached to particular localities. Each individual is socially situated, and one’s location within
the network of social affiliations substantially affects one’s access to various
resources. Opportunity travels along these social networks (Loury 2000, 233).
Emphasizing social network, Loury’s view of social capital closely parallels that of Bourdieu
in its micro perspective as an individual asset that affects one’s economic locus in society.
A similar micro perspective is also evident in the recent work of Glaeser, Laibson, and
Sacerdote (2002, F439) who define social capital as: “a person’s social characteristics—including social skills, charisma and the size of the Rolodex—which enables him to reap market and
non-market returns from interactions with others.” They further add, “individual social capital
includes both intrinsic abilities (e.g., being extroverted and charismatic) and the results of
social capital investments (e.g., a large Rolodex).” The above highlights a number of characteristics of social capital: (i) social capital is an individual asset; (ii) some aspects of it are intrinsic to an individual and some can be augmented by individual action; and (iii) social capital
can be purposefully used to augment one’s market and nonmarket position.1
The author who has done the most to popularize the concept, particularly in sociology, is
Coleman. Coleman’s characterization of social capital is however astoundingly vague. According to Coleman, “social capital constitutes a particular kind of resources available to an actor”
and he goes on to state:
Social capital is defined by its function. It is not a single entity but a variety of
different entities, with two elements in common: they all consist of some aspect
of social structures, and they facilitate certain actions of actors—whether persons or corporate actors—within the structure (Coleman 1988, S98).
Coleman’s work has opened up the way for a whole plethora of new definitions that often
emphasize different and contradictory aspects of social capital. Indeed, Coleman himself has
been a leading contributor to this potpourri of confusion. While Coleman’s examples of social
1
All social relationships need not be instrumental or driven by considerations of maximizing one’s market and
nonmarket positions. Social relations can be desired for their intrinsic value. In this connection, it may be noted
that long ago, Aristotle argued in his Nichomachean Ethics that utilitarian friendship is a very unreliable type of
friendship (van Stavern 2000).
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interactions—like the Jewish diamond merchants in New York in Coleman (1988)—in maintaining trusting relationships are interesting, he includes under the rubric of social capital
many disparate ideas. As Portes (1998) has correctly noted, Coleman includes under social
capital both the causes and consequences of social capital—that is, both the mechanism that
generates social capital (such as the reciprocity of expectations and group enforcement of
norms) and the benefits that accrue from it (such as access to group resources). Also included
in this expansive definition of social capital are “appropriable” social organizations2 that provide the context for both sources and effects to materialize. While social capital can help generate resources for group members, it is important to distinguish between social capital itself
and the outcome of social capital, i.e., the benefits one receives from group membership;
between the motivations of donors who provide the gifts and those of recipients who receive
the gifts. Coleman’s discussion of social capital does not seem to differentiate among the three
elements: the beneficiaries of social capital who are making claims, the sources of social capital
and those who are agreeing to the claims, and the resources themselves.
The above individualistic perspective of social capital differs from the aggregate/community perspective that seems to have emerged as the dominant paradigm in the literature, particularly in the hands of political scientist Putnam. Putnam offers an even more expansive
definition of social capital than Coleman. According to Putnam (1995, 67), “social capital
refers to features of social organization such as networks, norms, and social trust that facilitate
coordination and cooperation for mutual benefit.” In his recent work, he provides further
elaboration on the definition:
Social capital is closely related to what some have called “civic virtue.” The
difference is that “social capital” calls attention to the fact that civic virtue is
most powerful when embedded in a network of reciprocal social relations. A
society of many virtuous but isolated individuals is not necessarily rich in social capital (Putnam 2000, 19).
According to this aggregate perspective, social capital is a property of the group or the
community or even the nation as a whole, although there is less than unanimity among authors
what this property is. Different authors have highlighted different aspects.
Some recent notable contributors to this aggregative perspective include Inglehart,
Fukuyama, Bowles, Gintis, and Hayami. Inglehart (1997, 188) equates social capital with culture: that is, “a culture of trust and tolerance, in which extensive network of voluntary associations form.” And to him, culture is “a system of attitudes, values, and knowledge, that is widely
shared within a society and is transmitted from generation to generation” (Ingelhart 1997,
15). His interest is however to link these cultural dimensions to economic and political outcomes at the country level—in particular the level of democracy.
2
4
Appropriable social organizations, according to Coleman, refer to voluntary associations that are used for purposes
other than their original intent. An example of an appropriable social organization is the residents’ association in
an urban housing project. The association is initially formed for the purpose of pressuring builders to fix various
problems (leaks, crumbling sidewalks, etc.). After the problems have been solved, the organization becomes
available for appropriation by the residents to improve their quality of life.
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Fukuyama (1995) emphasizes the role of “trusts” and “spontaneous sociability” in reducing transactions costs and increasing economic efficiency.3 These transactions costs are salient
in day-to-day economic activities like finding the appropriate buyer or seller, negotiating a
contract, complying with government regulations, and enforcing that contract in the event of
dispute or fraud. According to Fukuyama (1999, 16), social capital is:
an instantiated set of informal values or norms shared among members of a
group that permit them to cooperate with one another. If members of the group
come to expect that others will behave reliably and honestly, then they will
come to trust one another. Trust acts like a lubricant that makes any group or
organization run more effectively.
Echoing similar themes, Bowles and Gintis (2002, F419) define social capital as: “trust,
concern for one’s associates, a willingness to live by the norms of one’s community and to
punish those who do not.” This definition highlights the role of trusts and norms to bind the
members of the group/community to cooperate. According to Bowles and Gintis, their definition follows a “social structural approach” that contrasts with the “individual-based approach”
of Glaeser and others.
Hayami (2001, 291) highlights a community perspective:
Relationships of mutual trust created through long-term and multiple transactions … would not only be effective in suppressing moral hazards between the
contracting parties but would also promote collaborative relationships within
the wider community. …Thus, trust accumulated through personal interactions
in the community increases efficiency and reduces costs associated with the
division of labor. In this regard, trust is a kind of “social capital” similar to
social overhead capital such as roads and harbors.
As is obvious from the above, social capital has become shorthand for “community.” The
trust and social harmony that glues a community can help overcome the opportunism and
moral hazard in interpersonal relationships. This can help not only to reduce transaction costs
in various types of market relationships but also overcome the free-rider problem in the provision of local public goods in a community.
3
Without using the term social capital, economists have long recognized the role of “trusts” in coping with market
failures and establishing economic efficiency, well before Fukuyama. A clear explicit statement is to be found in
Arrow (1971, 22) who notes: “In the absence of trust, opportunities for mutually beneficial cooperation would have
to be foregone…. norms of social behavior, including ethical and moral codes … (are) reactions of society to
compensate for market failures.” Even much earlier, as Bruni and Sugden (2000) note, such 18th century economists as David Hume, Adam Smith, and Antonio Genovesi recognized the importance of trust in economic transactions. Indeed they devoted considerable attention to such issues as: how trust can be rational, the conditions
under which such rational trust is possible, and the economic and social institutions that reproduce these conditions.
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The above sampling of definitions suggests that social capital has been used to indicate
many different notions.4 Some view social capital as an individual asset that comes from access
to networks and social connections, whereas others hold that it is a collective asset in the form
of a homogenous community with common interests and shared values. Some authors have
focused on trusts and tolerance, while others have focused on the degree of civic and social
engagements. Still others have highlighted issues of culture and social norms. The theory of
repeated games5 have been used to interpret norms of behavior, culture, and informal institutions: how they emerge and how they are sustained over time.6
Given that the concept of social capital is a heterogeneous one, embodying a set of related but distinct notions, it throws up a serious measurement and aggregation problem. This
is most explicitly stated by Dasgupta (2000, 327) who notes: “ It encourages us to amalgamate
incommensurable objects, namely (in that order) beliefs, behavioral rules, and such forms of
capital assets as interpersonal links, without offering a hint as to how they are to be amalgamated.” This led Dasgupta to suggest—quite sensibly — that these different notions of social
capital need to be studied separately to understand how they are interrelated.
III. IS SOCIAL CAPITAL REALLY CAPITAL OR A BAD METAPHOR?
Proponents of the concept of social capital have devoted considerable attention to explaining why it can indeed be considered as capital. Its current conceptualization draws on the
early work of Pierre Bourdieu, which differentiates between different forms of capital that
included economic capital, cultural capital, linguistic capital, scholastic capital, and social capital. Later on, in his work entitled “The Forms of Capital,” Bourdieu (1986) narrows these different types of capital into three—economic, cultural,7 and social—and addresses the question of
how these forms of capital interrelate and can be converted from one form to the other in order
to maximize accumulation. From this perspective, he defines social capital as “the aggregate of
4
5
6
7
6
In the words of Dasgupta (2000, 325), “social capital (has been) a peg on which to hang all those “informal”
engagements we like, care for and approve of.” Not only that, the concept is being continuously stressed. This has
led Fischer (2001, 3) to comment that the concept is “expand(ing) in all directions like a swamp in a bad weather.”
Repeated-game models highlight how long-run self-interest can help overcome short-term temptations of opportunism. A well-known result in game theory, known as the folk theorem, informs us that enlightened self-interest
of sufficiently forward looking players is adequate to ensure a full gamut of cooperative possibilities (Gibbons
1992). The basic intuition behind the theorem is that if an individual is to be punished in the future for noncooperative behavior today, this threat is sufficient to sustain cooperation over time. This result has been further
generalized by Kandori (1992) who shows that when each member of the group punishes noncooperative behavior
even when she is not directly affected, it leads not only to greater cooperation but also to the emergence of a set
of strictures, something akin to a social norm. This paper also shows how the idea of social sanctions can be
formalized.
The repeated-game approach suggests that one’s understanding of the other’s long-term self- interests may help
one to “trust” the other and not succumb to certain short-term temptations. However, there is more to trust than
this calculative conception (Williamson 1993). To the extent that this calculative trust is important, the theory of
repeated games can provide useful insights.
Cultural capital refers to one’s cultural features and social backgrounds (such as language, accent, manners, social
conduct etc.) that influence one’s advance in life. Obviously, the concepts of social and cultural capital are closely
interrelated.
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OR A
SECTION III
BAD METAPHOR?
the actual or potential resources which are linked to possession of a durable network of more
or less institutionalized relationships of mutual acquaintance and recognition … which provides each of its members with the backing of collectively-owned capital” (Bourdieu 1986,
248). This view of social capital as resources—accumulated primarily as a set of obligations
from others according to the norm of reciprocity—which agents can draw on to achieve their
interests is however not new.8 A macro-aggregative perspective of social capital, as may be
recalled, is to be found in the recent works of authors such as Putnam who view it as an
attribute of social organization. Putnam (2000) also makes a further taxonomic distinction
between two types of social capital—bonding and bridging. Bonding social capital fosters
denser social networks while bridging social capital creates larger networks. Notwithstanding
this taxonomic refinement and the heuristic appeal for the idea of social capital as a form of
capital, the argument is yet to win many converts in social sciences, particularly among economists.
At first blush, social capital may seem like a natural complement to the concepts of physical and human capital. However, this extension is far from neat and throws up serious conceptual incongruities. To Solow (2000, 6), “it is an attempt to gain conviction from a bad analogy.”
And Arrow (2000) calls for an outright abandonment of the capital metaphor and the term
social capital. To him, capital has three important characteristics: (i) capital has a time dimension; (ii) it requires deliberate sacrifice of the present for future benefit; and (iii) it is “alienable”—that is, its ownership can be transferred from one person to another. According to
Arrow, social capital may have a time dimension similar to physical capital—for example, reputation or trust takes time to develop and hence it satisfies (i). However, social capital does not
necessarily entail any material sacrifices,9 and hence does not generally satisfy (ii). And finally,
in most cases, it is difficult—as with human capital—to change the ownership of social capital,10 and hence does not satisfy (iii). All this would suggest that conceptually, social capital
falls short of being a form of capital.
And of course, this conceptual criticism applies as much to social capital in general as to
Putnam’s taxonomic innovation regarding bridging and bonding social capital. In this connection, Fischer (2001, 3) rightly notes that Putnam’s use of such metaphors, as “bridging” and
“binding” social capital is somewhat infelicitous as “both terms are more suited to a metaphor
around “ties” than around capital.”
Solow (2000) raises some measurement problems. While physical and human capital can
be measured and their rate of returns calculated, such rigorous measurements are much more
8
9
10
As Portes (1998) notes, similar perspectives can be found in sociology in the classical analysis of social exchange
by Simmel, which has resurfaced more recently in the works of authors of the rational action school such as
Coleman and Schiff.
While there may be some aspects of social capital that are costly to acquire, most others do not entail any material
sacrifice. The examples of the latter include: people are born into religious and ethnic groups and into nobility; or,
as noted by Glaeser et al. (2000), some people are born with inherent social skills and charisma.
The problem of alienability in social capital has been expressed most starkly by Fischer (2001, 3) who observes: “It
(social capital) is a metaphor that misleads: Where can I borrow some ‘social capital’? What is the going interest
rate? Can I move some of my social capital off-shore?”
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problematic in the case of social capital.11 Solow cites the example of the East Asian miracle
economies and the total factor productivity estimates of Kim and Lau, and Collin and Bosworth,
and notes that these estimates seem to suggest that either there is no special social capital
story underlying the Asian success, just conventional production economics, or that social
capital is precisely what accounts for the ability of these societies to accumulate capital and to
mobilize skilled labor effectively. He concludes that “either way, there is something to look for
that is at least capable of being found” (Solow 2000, 9). In light of these conceptual and
measurement problems, many economists are reluctant to label social capital as capital.12
In other words, although there is a general consensus that social interactions have important influences on economic outcomes, there is not much of a consensus whether these influences can be—or should be—meaningfully codified into such a metaphor as social capital. The
situation has been nicely summarized by Bowles and Gintis (2002, p. F420):13
Perhaps social capital, like Voltaire’s God, would have to have been invented if
it did not exist. It may even be a good idea. A good term it is not. Capital refers
to a thing that can be owned—even a social isolate like Robinson Crusoe had
an axe and fishing net. By contrast, the attributes said to make up social capital
describe relationships among people. As with other trendy expressions, “social
capital” has attracted so many disparate uses that we think it better to drop the
term in favor of something more precise.
IV. TAUTOLOGICAL DEFINITION AND EXAGGERATION OF BENEFITS
The way much of the existing literature defines social capital tends to exaggerate its
beneficial aspects. As Portes (1998) and Durlauf (1999) have noted, many have defined social
capital in such terms that confuse its sources with consequences or its existence with functions.
That is, the evidence of the existence of social capital is often inferred from its positive outcomes. As noted earlier, according to Coleman (1988) social capital is to be defined “by its
functions” and Putnam (1995) viewed social capital in terms of “features of social life … that
11
12
13
8
As Dasgupta (2000) has noted, there is a serious measurement problem with social capital, even if it is assumed
that it is a type of capital. To aggregate the different components of social capital as networks and norms into a
stock of capital, one would require a set of market prices associated with different types of social capital. However,
these are the commodities where market failures are most conspicuous.
Even many ardent advocates of the concept of social capital concede that social capital is not really a capital in the
strict sense of the term. For example, Ostrom (2000), who argues that social capital is a fundamental concept that
offers an essential complement to natural, physical, and human capital, notes that social capital is different from
other forms of capital in some important ways. She identifies four key differences: First, social capital does not
wear out with use—on the contrary, it erodes from a lack of use. Second, it is not easy to see or measure. Third,
it is hard to construct through external (for example donor) intervention. Finally, national and regional government
institutions strongly affect the level and type of social capital available to individuals to pursue long-term development efforts. Indeed, these key differences constitute the very basis for the Arrow-Solow critique.
Bowles and Gintis advocate abandoning the term social capital in favor of community that “better captures the
aspects of good governance that explain social capital’s popularity, as it focuses attention on what groups do rather
than what people own” (Bowles and Gintis 2002, F.420) It is noteworthy that a recent volume by Aoki and Hayami
(2001) on the subject was named, Communities and Markets in Economic Development.
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facilitate cooperation and coordination for mutual benefit.” This line of argumentation leads
to circuitous reasoning—and exaggeration of the benefits of social capital. Social capital has
its benefits and costs: it is not an unmixed blessing. It can lead to such adverse effects as
exclusion of outsiders, excessive claims by insiders, restrictions of individual freedoms, and
perpetuation of backward norms. The following further elaborates these points.
First, social capital that opens up opportunities for the members of the network, which is
often based on ethnicity, religion, language, and profession, can at the same time constitute an
enormous barrier to entry for others outside the network. There are many real world examples
of this type of exclusion based on race and ethnicity. As cited by Portes (1998), Waldinger
(1996), in his study of immigrant labor in New York City, notes that poor blacks do not have
entry to jobs in construction and service industries for lack of access to the ethnic networks
that control the recruitment process. Similarly, the adverse effects of the networks of merchants have been underscored by Smith (1776/1976, 232), who notes:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some
contrivance to raise prices. It is impossible indeed to prevent such meetings,
by any law which either could be executed, or would be consistent with liberty
and justice. But though the law cannot hinder people of the same trade from
sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.
While the “conspiracies” referred to by Smith14 can help the group members to safeguard
their economic interests or perpetuate monopoly privileges, they certainly do not help society. 15
Second, while a close-knit group can be a source of economic dynamism for its membership, it can also dilute personal incentives to work hard. Social capital can lead to moral hazard
and the creation of welfare-haven. It can help sustain the indolence and economic impoverishment of those who failed by the resources and hard work of those who succeeded. Social capital
can be a safety net that can penalize success and reward failures. A concrete illustration is
provided by Geertz (1963) who notes that successful entrepreneurs in Bali were constantly
14
15
A similar skeptical view about the network of interest groups is to be found in Olson (1982) who argues that the
collusion of interest groups is harmful to economic development as it leads to unproductive rent-seeking activities.
Sobel (2002) provides another interesting illustration of such a “conspiracy” in terms of the prisoner’s dilemma.
When the prisoners cooperate with each other and do not confess they receive a brief sentence. This conspiracy of
the culprits certainly makes the prisoners better off (relative to the equilibrium outcome), but this is unlikely to
make the rest of the society better off as it would presumably want see the criminals put behind bars.
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taxed by job-hunting and money-seeking kinsmen. Social capital, in conjunction with the redistributive social norm of many traditional societies, may represent a serious obstacle to
accumulation and successful entrepreneurship.16
Third, while group membership of a community has its advantages, it often enforces strict
conformity, infringes on individual freedoms, and creates pressures for submission to mediocrity. Many independent-minded individuals consider these aspects of a community life suffocating—and have attempted to escape them for the freedom of urban life. As Hayami (1998)
has noted, enlightenment philosophers such as Montesqieu considered traditional customs
and norms as oppressing human minds. These traditional customs and norms, needless to
emphasize, can have a similar dampening effect on the dynamics of economic development. In
his theory of entrepreneurship, Schumpeter (1934 and 1950) discussed about “industrial mutation”, a process of industrial development facilitated by entrepreneurship in an evolving
market economy. This industrial mutation entails transition from personal capitalism, ensnared
by traditional behavior, to one of rational capitalism that “breaks the crust of convention” and
thrives on the impersonal forces of the market.
Finally, network and group coordination can often lead to the establishment of a bad
equilibrium of norms and values. When a bad equilibrium is established, role model and peer
group influences tend to sustain it. Such a bad equilibrium is individually rational: it is optimal
for individuals to subscribe to such group norms because any deviation leads to social opprobrium and group retribution and hence lower individual welfare. However, the group as a whole
is worse off because it is engaged in socially suboptimal behavior (behavior that is either
destructive or risky). Teenage pregnancy and drug addiction are examples of such behavior,
which is often established through role model and peer group influences and sustained through
group conformity. When a network or group leads to such a bad equilibrium system of norms
and values, then the members of the network or group and the society as a whole would be
better off if such a network or group did not exist.
16
A different kind of mechanism may be at play in developed countries where social networks can create a culture
of poverty. When the disadvantaged interact only with the disadvantaged, this can foster social stagnation. As the
evidence from developed countries suggests, social networks among the poor are often better at supplying information on welfare eligibility than job availability, creating more negative peer pressures than positive role models
and sustaining a culture of welfare dependency than an environment of entrepreneurship and economic dynamism.
A recent paper by Bertrand, Luttmer, and Mullainathan (2000) provides strong empirical support from the US in
favor of this hypothesis. Their careful empirical work confirms the existence of a high degree of correlation
between social networks (based on a common linguistic identity) in a neighborhood and the extent of welfare
dependency among language groups that rely highly on welfare.
10
MAY 2003
SECTION V
THE PROBLEMS WITH THE EMPIRICS OF SOCIAL CAPITAL
V. THE PROBLEMS WITH THE EMPIRICS OF SOCIAL CAPITAL
Recent years have seen the emergence of a sizeable empirical literature on social capital.
A high profile work that has brought social capital to doorsteps of the wider policy community,
particularly in developed countries, is Putnam’s (2000) much celebrated book, Bowling Alone:
The Collapse and Revival of American Community.17 In this book, Putnam attributes a whole
variety of social ills in the United States (US) today—from declining voting participation to
increasing crime rates to shrinking philanthropy—to lack of social capital. While the book puts
forward an interesting hypothesis18 and culls together an impressive body of evidence, its
empirical analysis remains rudimentary19 and its discussion of policy somewhat cavalier. Notwithstanding these deficiencies, the important contribution of this work has been to stimulate
further research on social capital and its role in redressing social and economic problems.
Social capital has also been gaining popularity as a concept for analyzing the socioeconomic problems of developing countries. The emerging literature follows three major strands.
The first strand deals with the link between economic growth and social capital. Some of the
notable studies in this regard include Knack and Keefer (1997), Zak and Knack (2001), Collier
and Gunning (1999), Easterly and Levin (1997), and Rodrik (1998). The first two papers confirm, in the context of cross-country growth regressions, the relationship between economic
performances and trust in people. The last three studies argue that ethnically heterogeneous
societies (implying lower level of social capita) are slow to growth or to adjust less efficiently
to external shocks.20
The second strand deals with the issue how social capital can substitute for missing capital and insurance markets. The contributions in this area include van Bastelaer (2000); Goldstein,
DeJanvry, and Sadoulet (2001); Fafchamps and Lund (2003); and Morduch and Sicular (2001).
The first study highlights the role of existing social capital ties in improving the poor’s access
to social capital. In lending schemes involving groups, social ties among borrowers can help
reduce transaction costs associated with screening, monitoring, and enforcement. The study by
17
18
19
20
This book is a grandiose elaboration of his thesis contained in the earlier shorter article, Putnam (1995).
A number of authors—for example, Paxton (1999) and Ladd (1996)—have contested the claim that there has been
a decline in social capital in the US.
Much of the analysis is conducted in terms of bivariate graphical representation, which, as is well known, cannot
distinguish between correlation and causality. The study also reports some multivariate regression results that
seem to be marred by problems of omitted variables and unobserved heterogeneity.
An interesting qualitative study that explores the relationship between trust and macroeconomic performance is
Fukayama (1995). In this study, Fukayama classifies countries into low trust and high trust countries. According to
his assessment, Germany, Japan, and US are high trust countries whereas PRC; France; Hong Kong, China; Italy;
Republic of Korea; and Taipei,China are low trust countries. He argues that high trust countries have greater
economic success as they can implement more efficient organizational innovations. When trust is limited to
families, the supply of capital and qualified managers remains constrained, and this in turn restricts the scale of
private family firms. While the basic hypothesis of Fukayama seems plausible, his classification of countries based
on trust is highly impressionistic as is his much-vaunted empirical relationship between trusts and economic
performance. As the recent record of economic performance of nations indicates, some of his low trust countries
have made remarkable organizational innovations and registered stellar economic performance (for example, the
PRC) whereas some of his high trust countries seem to be mired in near perpetual economic stagnation (for
example, Japan).
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THE PUZZLE OF SOCIAL CAPITAL
A CRITICAL REVIEW
M. G. QUIBRIA
Goldstein, DeJanvry, and Sadoulet highlights the role of social capital as a social safety net
mechanism in Ghana and identifies the factors that help shape the social connection that underpins the insurance mechanism. The Fafchamps-Lund study relates to the Philippines and
analyzes the role of networks of friends and relatives in providing mutual friends. The final
study, Morduch and Sincular (2001), analyzes the effectiveness of social capital as a risksharing mechanism in rural PRC in the post-reform period.
The third strand deals with the issue how social capital can help circumvent the collective
action problem and help the provision of local public goods. These studies include Ostrom
(2000); Ostrom, Gardner, and Walker (1994); Bardhan (2001); Kikuchi, Fujita, and Hayami
(2001); and Otsuka and Tachibana (2001). In their study of the irrigations system in developing countries, Ostrom and her collaborators analyze how social capital has been helpful in
eliciting cooperation among farmers, evolving a common norm of behavior, and circumventing
collective actions problems. The studies by Bardhan (2001) on the irrigation communities in
South India; by Kikuchi, Fujita, and Hayami on the irrigation system in the Philippines; and by
Otsuka and Tachibana (2001) on the community forestry in Nepal all offer interesting illustrations on the role of social capital in the management of community resources.
As a cursory review of the empirical literature on social capital would suggest, the literature is diverse in terms of methodology and the degree of analytical sophistication. Some of it
is descriptive—and does little beyond suggesting the importance of social capital (in whatever
sense the term is defined in the particular context). Some of it is more quantitative, often
involving regression-type analysis. However, a large segment of this quantitative literature
suffers from various technical, econometric problems.
In a recent paper, Durlauf (2002) examines the common estimation problems that pervade the social capital literature. While he agrees that these problems are, at some level, endemic to a wide body of the empirical studies, they seem to be particularly serious for the
empirical social capital literature. In the words of Durlauf (2002, F474):
The empirical social capital literature seems to be particularly plagued by vague
definition of concepts, poorly measured data, absence of appropriate exchangeability conditions, and lack of information necessary to make identification
claims plausible. These problems are particularly important for social capital
contexts as social capital augments depend on underlying psychological and
sociological relations that are difficult to quantify, let alone measure.
In the context of three benchmark empirical studies,21 Durlauf notes three sets of generic
problems. First, social capital studies often fail to distinguish between social capital effects and
21
These three studies have been chosen because they are well regarded in the social science literature and analyze
the social capital issues in different contexts: one at the individual level in the US, another at the individual level
in a developing country, and still another at the national level, involving cross-country regression analysis. Furstenberg
and Hughes (1995) explore, with data from Baltimore (US), how the probability of an individual dropping out of
school is related to social capital factors such as the presence of a father in the household and the educational
aspirations of the person’s friends. Narayan and Pritchett (1999) examine the role of social capital in the form of
12
MAY 2003
SECTION VI
CONCLUDING REMARKS
other effects that follow from group membership. However, this problem of identification is
not resolved by incorporating a full range of alternative group influences; it requires a clear
definition of social capital and conceptualization of the underlying causal process. Second,
social capital proxies are often endogenous and this requires the use of instrumental variables
based on ad hoc exogeneity assumption. However, constructing credible instrumental variables
in these types of regression requires a theory of the determinants of social capital. Third, social
capital regression exercises rely on untenable comparability assumptions.22 That is, the analysis assumes that the regression uses comparable objects as observations.23 In light of these
problems, Durlauf suggests that empirical analyses on social capital need to step back from
“grandiose approaches” and limit themselves to more specific sociological dimensions of individual behavior and rely on the use of more experimental data.
VI. CONCLUDING REMARKS
As the foregoing discussion suggests, social capital has come to signify different things
for different authors. Given the wide diversity of notions associated with the term social capital, the concept has remained largely amorphous and is yet to reach the clarity and precision
required of a tool to be used for rigorous empirical work.
Notwithstanding this limitation, recent years have seen a mushrooming of a literature
that applies many different notions of social capital to analyze many diverse economic and
social issues. Despite its exaggerated claims, as Portes and Landolt (1996) rightly note, much
of this literature does not go beyond calling attention to “the possible individual and family
benefits of sociability” or “a nuanced understanding of the pros and cons of groups and communities.” The policy conclusions are often very banal.24 Durlauf (2002, F459) is even more
critical in his assessment of the empirics of social capital when he asserts that “whether these
22
23
24
membership of groups in influencing household outcomes in rural Tanzania. Finally, Knack and Keefer (1997)
examine in the context of a cross-country regression framework the impact of social capital—such as civic cooperation and trust—on economic growth.
As quoted by Durlauf (2002), Draper et al. (1993, 1) describes the importance of exchangeability in empirical
exercises in the following manner: “Statistical methods are concerned with combining information from different
observational units and with making inferences from the resulting summaries to perspective measurements on the
same or other units. These operations will be useful only when the units to be combined are judged to be similar
(comparable or homogenous).”
As is now widely known, results of cross-country growth regressions are often extremely fragile. These types of
exercises have been subject to considerable criticism by both economic theorists and econometricians. Growth
theorists find the empirical equations ad hoc without any sound analytical basis, while econometricians complain
about the various technical econometric problems—such as unobserved fixed effects, measurement errors,
endogeneity, parameter heterogeneity etc.—that sully the effort. See Quibria (2002) for further details on this.
In a recent paper, Costa and Kahn (2003) surveys the proliferating economic literature on how the determinants of
civic engagement in a community. This survey covers about 15 studies encompassing different nations, different
social capital measures, and different time periods. The policy message that emerges from this survey, as the
authors report, is, “heterogeneity reduces civic engagement.” This message, which should surprise nobody, provides very little guidance for policies. As much of the heterogeneity takes the form of ethnic and racial diversity
and hence is not amenable to policy manipulation—except by odious political means!—this type of message is
cold comfort to real world policymakers!
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THE PUZZLE OF SOCIAL CAPITAL
A CRITICAL REVIEW
M. G. QUIBRIA
(social capital) studies establish the empirical importance of social capital in understanding
the various socio-economic outcomes, my conclusion is no.” These assessments are obviously
not very salutary nor do they provide a clean bill of health regarding the state of empirical
analysis in this area.
To move the literature forward, it would be useful first to get the concept right. It should
begin with the acknowledgement that there is no single entity called social capital, but many
distinct notions—such as trusts, norms, culture, community, and networks—highlight the many
different aspects of nonmarket social interactions. It is heartening to note that recent works in
this area, particularly in economics, seem to reflect this heterogeneity of perspectives, focusing on different aspects of social interactions and drawing distinctly different analytical and
policy implications. However, to avoid confusion and to achieve greater analytical traction and
empirical understanding, social capital studies need to proceed with a clear definition of the
specific notion of social capital being applied.25
As noted earlier, despite the recent proliferation of studies in social capital, this has not
been accompanied by a commensurate increase in analytical rigor. Analytical rigor does not
necessarily mean heavy reliance on quantitative methods. Indeed, there are certain questions
that are better addressed in broad qualitative terms, while others require greater reliance on
the quantitative approach. However, the success of the quantitative studies depends on the
availability of the relevant and reliable data.
Measuring social capital, which is often vested in such entities as trust, community, peer
pressure, role models, and networks, is difficult. The task becomes doubly difficult if this measurement needs to incorporate both quality and quantity. However, further progress with the
empirical analysis of social capital is inextricably connected with the availability of betterquality data. However, this is not easily obtained. Data on social capital have been sourced in a
number of different ways. First, surveys of perceptions can be a major source. However, they
are often an imperfect source, as the respondents to surveys have no incentive to answer
honestly or carefully.26 Second, the standard practice in empirical social sciences including
economics is to infer the nature of economic and social interactions from observations of
outcome data. However, such outcome data have limited ability to discriminate among alternative hypotheses regarding the underlying processes. Finally, economic experiments can be an
important source of data on social capital. As social capital concepts relate to social interactions involving subjective processes, it is therefore only natural that social capital studies rely
25
26
This definition is important to guide empirical analysis—in particular, its choice of the social- capital indicator.
Different social-capital indicators—even if we assume they are interconnected and reflect the different attributes
of the underlying social-capital process—do not move in sympathy. Fischer (2001) examines seven indicators of
social capital –trusting most people, church attendance, belonging to organizations, socializing with neighbors,
socializing with friends outside the neighborhood, and giving money to charity—from the General Social Surveys
(1972-1999) and finds little coherence among them. The different indicators often display little correlation, and
they even sometimes exhibit opposite trends.
The emerging experimental literature confirms this divergence. In a recent paper, Bertrand and Mullainathan
(2001) provide a more in-depth discussion with illustrative examples why such subjective survey data can be
misleading.
14
MAY 2003
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economists and other social scientists.
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—Cyn-Young Park and Jaejoon Woo
December 2002
Leading Indicators of Business Cycles in Malaysia
and the Philippines
—Wenda Zhang and Juzhong Zhuang
December 2002
Technological Spillovers from Foreign Direct
Investment—A Survey
—Emma Xiaoqin Fan
December 2002
Economic Openness and Regional Development in
the Philippines
—Ernesto M. Pernia and Pilipinas F. Quising
January 2003
No. 35
No. 36
No. 37
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Bond Market Development in East Asia:
Issues and Challenges
—Raul Fabella and Srinivasa Madhur
January 2003
Environment Statistics in Central Asia: Progress
and Prospects
—Robert Ballance and Bishnu D. Pant
March 2003
Electricity Demand in the People’s Republic of
China: Investment Requirement and
Environmental Impact
—Bo Q. Lin
March 2003
Foreign Direct Investment in Developing Asia:
Trends, Effects, and Policies
—Douglas H. Brooks, Emma Xiaoqin Fan,
and Lea R. Sumulong
April 2003
The Political Economy of Good Governance for
Poverty Alleviation Policies
—Narayan Lakshman
April 2003
The Puzzle of Social Capital
A Critical Review
—M. G. Quibria
May 2003
ERD TECHNICAL NOTE SERIES (TNS)
(Published in-house; Available through ADB Office of External Relations; Free of Charge)
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Contingency Calculations for Environmental
Impacts with Unknown Monetary Values
—David Dole
February 2002
Integrating Risk into ADB’s Economic Analysis
of Projects
—Nigel Rayner, Anneli Lagman-Martin,
and Keith Ward
June 2002
Measuring Willingness to Pay for Electricity
—Peter Choynowski
July 2002
No. 4
No. 5
No. 6
19
Economic Issues in the Design and Analysis of a
Wastewater Treatment Project
—David Dole
July 2002
An Analysis and Case Study of the Role of
Environmental Economics at the Asian
Development Bank
—David Dole and Piya Abeygunawardena
September 2002
Economic Analysis of Health Projects: A Case Study
in Cambodia
—Erik Bloom and Peter Choynowski
May 2003
ERD POLICY BRIEF SERIES (PBS)
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Is Growth Good Enough for the Poor?
—Ernesto M. Pernia, October 2001
India’s Economic Reforms
What Has Been Accomplished?
What Remains to Be Done?
—Arvind Panagariya, November 2001
Unequal Benefits of Growth in Viet Nam
—Indu Bhushan, Erik Bloom, and Nguyen Minh
Thang, January 2002
Is Volatility Built into Today’s World Economy?
—J. Malcolm Dowling and J.P. Verbiest,
February 2002
What Else Besides Growth Matters to Poverty
Reduction? Philippines
—Arsenio M. Balisacan and Ernesto M. Pernia,
February 2002
Achieving the Twin Objectives of Efficiency and
Equity: Contracting Health Services in Cambodia
—Indu Bhushan, Sheryl Keller, and Brad
Schwartz, March 2002
Causes of the 1997 Asian Financial Crisis: What
Can an Early Warning System Model Tell Us?
—Juzhong Zhuang and Malcolm Dowling,
June 2002
The Role of Preferential Trading Arrangements
in Asia
—Christopher Edmonds and Jean-Pierre Verbiest,
July 2002
The Doha Round: A Development Perspective
—Jean-Pierre Verbiest, Jeffrey Liang, and Lea
Sumulong
No. 10
No. 11
No. 12
July 2002
Is Economic Openness Good for Regional
Development and Poverty Reduction? The
Philippines
—E. M. Pernia and P. F. Quising
October 2002
Implications of a US Dollar Depreciation for Asian
Developing Countries
—Emma Fan
July 2002
Dangers of Deflation
—D. Brooks and P. F. Quising
December 2002
No. 13
No. 14
No. 15
No. 16
No. 17
Infrastructure and Poverty Reduction—
What is the Connection?
—I. Ali and E. Pernia
January 2003
Infrastructure and Poverty Reduction—
Making Markets Work for the Poor
—Xianbin Yao
May 2003
SARS: Economic Impacts and Implications
—Emma Xiaoqin Fan
May 2003
Emerging Tax Issues: Implications of Globalization
and Technology
—Kanokpan Lao Araya
May 2003
Pro-Poor Growth: What is It and Why is It
Important?
—Ernesto M. Pernia
May 2003
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ASEAN and the Asian Development Bank
—Seiji Naya, April 1982
Development Issues for the Developing East
and Southeast Asian Countries
and International Cooperation
—Seiji Naya and Graham Abbott, April 1982
Aid, Savings, and Growth in the Asian Region
—J. Malcolm Dowling and Ulrich Hiemenz,
April 1982
Development-oriented Foreign Investment
and the Role of ADB
—Kiyoshi Kojima, April 1982
The Multilateral Development Banks
and the International Economy’s Missing
Public Sector
—John Lewis, June 1982
Notes on External Debt of DMCs
—Evelyn Go, July 1982
Grant Element in Bank Loans
—Dal Hyun Kim, July 1982
Shadow Exchange Rates and Standard
Conversion Factors in Project Evaluation
—Peter Warr, September 1982
Small and Medium-Scale Manufacturing
Establishments in ASEAN Countries:
Perspectives and Policy Issues
—Mathias Bruch and Ulrich Hiemenz,
January 1983
A Note on the Third Ministerial Meeting of GATT
—Jungsoo Lee, January 1983
Macroeconomic Forecasts for the Republic
of China, Hong Kong, and Republic of Korea
—J.M. Dowling, January 1983
ASEAN: Economic Situation and Prospects
—Seiji Naya, March 1983
The Future Prospects for the Developing
Countries of Asia
—Seiji Naya, March 1983
Energy and Structural Change in the AsiaPacific Region, Summary of the Thirteenth
Pacific Trade and Development Conference
—Seiji Naya, March 1983
A Survey of Empirical Studies on Demand
for Electricity with Special Emphasis on Price
Elasticity of Demand
—Wisarn Pupphavesa, June 1983
Determinants of Paddy Production in Indonesia:
1972-1981–A Simultaneous Equation Model
Approach
—T.K. Jayaraman, June 1983
The Philippine Economy: Economic
Forecasts for 1983 and 1984
—J.M. Dowling, E. Go, and C.N. Castillo,
June 1983
Economic Forecast for Indonesia
—J.M. Dowling, H.Y. Kim, Y.K. Wang,
and C.N. Castillo, June 1983
Relative External Debt Situation of Asian
Developing Countries: An Application
of Ranking Method
—Jungsoo Lee, June 1983
New Evidence on Yields, Fertilizer Application,
and Prices in Asian Rice Production
—William James and Teresita Ramirez, July 1983
Inflationary Effects of Exchange Rate
Changes in Nine Asian LDCs
—Pradumna B. Rana and J. Malcolm Dowling,
Jr., December 1983
No. 22
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No. 25
No. 26
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No. 41
21
Effects of External Shocks on the Balance
of Payments, Policy Responses, and Debt
Problems of Asian Developing Countries
—Seiji Naya, December 1983
Changing Trade Patterns and Policy Issues:
The Prospects for East and Southeast Asian
Developing Countries
—Seiji Naya and Ulrich Hiemenz, February 1984
Small-Scale Industries in Asian Economic
Development: Problems and Prospects
—Seiji Naya, February 1984
A Study on the External Debt Indicators
Applying Logit Analysis
—Jungsoo Lee and Clarita Barretto,
February 1984
Alternatives to Institutional Credit Programs
in the Agricultural Sector of Low-Income
Countries
—Jennifer Sour, March 1984
Economic Scene in Asia and Its Special Features
—Kedar N. Kohli, November 1984
The Effect of Terms of Trade Changes on the
Balance of Payments and Real National
Income of Asian Developing Countries
—Jungsoo Lee and Lutgarda Labios, January 1985
Cause and Effect in the World Sugar Market:
Some Empirical Findings 1951-1982
—Yoshihiro Iwasaki, February 1985
Sources of Balance of Payments Problem
in the 1970s: The Asian Experience
—Pradumna Rana, February 1985
India’s Manufactured Exports: An Analysis
of Supply Sectors
—Ifzal Ali, February 1985
Meeting Basic Human Needs in Asian
Developing Countries
—Jungsoo Lee and Emma Banaria, March 1985
The Impact of Foreign Capital Inflow
on Investment and Economic Growth
in Developing Asia
—Evelyn Go, May 1985
The Climate for Energy Development
in the Pacific and Asian Region:
Priorities and Perspectives
—V.V. Desai, April 1986
Impact of Appreciation of the Yen on
Developing Member Countries of the Bank
—Jungsoo Lee, Pradumna Rana, and Ifzal Ali,
May 1986
Smuggling and Domestic Economic Policies
in Developing Countries
—A.H.M.N. Chowdhury, October 1986
Public Investment Criteria: Economic Internal
Rate of Return and Equalizing Discount Rate
—Ifzal Ali, November 1986
Review of the Theory of Neoclassical Political
Economy: An Application to Trade Policies
—M.G. Quibria, December 1986
Factors Influencing the Choice of Location:
Local and Foreign Firms in the Philippines
—E.M. Pernia and A.N. Herrin, February 1987
A Demographic Perspective on Developing
Asia and Its Relevance to the Bank
—E.M. Pernia, May 1987
Emerging Issues in Asia and Social Cost
Benefit Analysis
—I. Ali, September 1988
No. 42
No. 43
No. 44
No. 45
No. 46
No. 47
No. 48
No. 49
No. 50
No. 51
No. 52
No. 53
No. 54
No. 55
Shifting Revealed Comparative Advantage:
Experiences of Asian and Pacific Developing
Countries
—P.B. Rana, November 1988
Agricultural Price Policy in Asia:
Issues and Areas of Reforms
—I. Ali, November 1988
Service Trade and Asian Developing Economies
—M.G. Quibria, October 1989
A Review of the Economic Analysis of Power
Projects in Asia and Identification of Areas
of Improvement
—I. Ali, November 1989
Growth Perspective and Challenges for Asia:
Areas for Policy Review and Research
—I. Ali, November 1989
An Approach to Estimating the Poverty
Alleviation Impact of an Agricultural Project
—I. Ali, January 1990
Economic Growth Performance of Indonesia,
the Philippines, and Thailand:
The Human Resource Dimension
—E.M. Pernia, January 1990
Foreign Exchange and Fiscal Impact of a Project:
A Methodological Framework for Estimation
—I. Ali, February 1990
Public Investment Criteria: Financial
and Economic Internal Rates of Return
—I. Ali, April 1990
Evaluation of Water Supply Projects:
An Economic Framework
—Arlene M. Tadle, June 1990
Interrelationship Between Shadow Prices, Project
Investment, and Policy Reforms:
An Analytical Framework
—I. Ali, November 1990
Issues in Assessing the Impact of Project
and Sector Adjustment Lending
—I. Ali, December 1990
Some Aspects of Urbanization
and the Environment in Southeast Asia
—Ernesto M. Pernia, January 1991
Financial Sector and Economic
Development: A Survey
No. 56
No. 57
No. 58
No. 59
No. 60
No. 61
No. 62
No. 63
No. 64
No. 65
No. 66
No. 67
22
—Jungsoo Lee, September 1991
A Framework for Justifying Bank-Assisted
Education Projects in Asia: A Review
of the Socioeconomic Analysis
and Identification of Areas of Improvement
—Etienne Van De Walle, February 1992
Medium-term Growth-Stabilization
Relationship in Asian Developing Countries
and Some Policy Considerations
—Yun-Hwan Kim, February 1993
Urbanization, Population Distribution,
and Economic Development in Asia
—Ernesto M. Pernia, February 1993
The Need for Fiscal Consolidation in Nepal:
The Results of a Simulation
—Filippo di Mauro and Ronald Antonio Butiong,
July 1993
A Computable General Equilibrium Model
of Nepal
—Timothy Buehrer and Filippo di Mauro,
October 1993
The Role of Government in Export Expansion
in the Republic of Korea: A Revisit
—Yun-Hwan Kim, February 1994
Rural Reforms, Structural Change,
and Agricultural Growth in
the People’s Republic of China
—Bo Lin, August 1994
Incentives and Regulation for Pollution Abatement
with an Application to Waste Water Treatment
—Sudipto Mundle, U. Shankar,
and Shekhar Mehta, October 1995
Saving Transitions in Southeast Asia
—Frank Harrigan, February 1996
Total Factor Productivity Growth in East Asia:
A Critical Survey
—Jesus Felipe, September 1997
Foreign Direct Investment in Pakistan:
Policy Issues and Operational Implications
—Ashfaque H. Khan and Yun-Hwan Kim,
July 1999
Fiscal Policy, Income Distribution and Growth
—Sailesh K. Jha, November 1999
ECONOMIC STAFF PAPERS (ES)
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
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No. 18
No. 19
No. 20
International Reserves:
Factors Determining Needs and Adequacy
—Evelyn Go, May 1981
Domestic Savings in Selected Developing
Asian Countries
—Basil Moore, assisted by
A.H.M. Nuruddin Chowdhury, September 1981
Changes in Consumption, Imports and Exports
of Oil Since 1973: A Preliminary Survey of
the Developing Member Countries
of the Asian Development Bank
—Dal Hyun Kim and Graham Abbott,
September 1981
By-Passed Areas, Regional Inequalities,
and Development Policies in Selected
Southeast Asian Countries
—William James, October 1981
Asian Agriculture and Economic Development
—William James, March 1982
Inflation in Developing Member Countries:
An Analysis of Recent Trends
—A.H.M. Nuruddin Chowdhury and
J. Malcolm Dowling, March 1982
Industrial Growth and Employment in
Developing Asian Countries: Issues and
Perspectives for the Coming Decade
—Ulrich Hiemenz, March 1982
Petrodollar Recycling 1973-1980.
Part 1: Regional Adjustments and
the World Economy
—Burnham Campbell, April 1982
Developing Asia: The Importance
of Domestic Policies
—Economics Office Staff under the direction
of Seiji Naya, May 1982
Financial Development and Household
Savings: Issues in Domestic Resource
Mobilization in Asian Developing Countries
—Wan-Soon Kim, July 1982
Industrial Development: Role of Specialized
Financial Institutions
—Kedar N. Kohli, August 1982
Petrodollar Recycling 1973-1980.
Part II: Debt Problems and an Evaluation
of Suggested Remedies
—Burnham Campbell, September 1982
Credit Rationing, Rural Savings, and Financial
Policy in Developing Countries
—William James, September 1982
Small and Medium-Scale Manufacturing
Establishments in ASEAN Countries:
Perspectives and Policy Issues
—Mathias Bruch and Ulrich Hiemenz, March 1983
Income Distribution and Economic
Growth in Developing Asian Countries
—J. Malcolm Dowling and David Soo, March 1983
Long-Run Debt-Servicing Capacity of
Asian Developing Countries: An Application
of Critical Interest Rate Approach
—Jungsoo Lee, June 1983
External Shocks, Energy Policy,
and Macroeconomic Performance of Asian
Developing Countries: A Policy Analysis
—William James, July 1983
The Impact of the Current Exchange Rate
System on Trade and Inflation of Selected
Developing Member Countries
—Pradumna Rana, September 1983
Asian Agriculture in Transition: Key Policy Issues
—William James, September 1983
The Transition to an Industrial Economy
No. 21
No. 22
No. 23
No. 24
No. 25
No. 26
No. 27
No. 28
No. 29
No. 30
No. 31
No. 32
No. 33
No. 34
No. 35
No. 36
No. 37
No. 38
No. 39
No. 40
No. 41
No. 42
No. 43
No. 44
23
in Monsoon Asia
—Harry T. Oshima, October 1983
The Significance of Off-Farm Employment
and Incomes in Post-War East Asian Growth
—Harry T. Oshima, January 1984
Income Distribution and Poverty in Selected
Asian Countries
—John Malcolm Dowling, Jr., November 1984
ASEAN Economies and ASEAN Economic
Cooperation
—Narongchai Akrasanee, November 1984
Economic Analysis of Power Projects
—Nitin Desai, January 1985
Exports and Economic Growth in the Asian Region
—Pradumna Rana, February 1985
Patterns of External Financing of DMCs
—E. Go, May 1985
Industrial Technology Development
the Republic of Korea
—S.Y. Lo, July 1985
Risk Analysis and Project Selection:
A Review of Practical Issues
—J.K. Johnson, August 1985
Rice in Indonesia: Price Policy and Comparative
Advantage
—I. Ali, January 1986
Effects of Foreign Capital Inflows
on Developing Countries of Asia
—Jungsoo Lee, Pradumna B. Rana,
and Yoshihiro Iwasaki, April 1986
Economic Analysis of the Environmental
Impacts of Development Projects
—John A. Dixon et al., EAPI,
East-West Center, August 1986
Science and Technology for Development:
Role of the Bank
—Kedar N. Kohli and Ifzal Ali, November 1986
Satellite Remote Sensing in the Asian
and Pacific Region
—Mohan Sundara Rajan, December 1986
Changes in the Export Patterns of Asian and
Pacific Developing Countries: An Empirical
Overview
—Pradumna B. Rana, January 1987
Agricultural Price Policy in Nepal
—Gerald C. Nelson, March 1987
Implications of Falling Primary Commodity
Prices for Agricultural Strategy in the Philippines
—Ifzal Ali, September 1987
Determining Irrigation Charges: A Framework
—Prabhakar B. Ghate, October 1987
The Role of Fertilizer Subsidies in Agricultural
Production: A Review of Select Issues
—M.G. Quibria, October 1987
Domestic Adjustment to External Shocks
in Developing Asia
—Jungsoo Lee, October 1987
Improving Domestic Resource Mobilization
through Financial Development: Indonesia
—Philip Erquiaga, November 1987
Recent Trends and Issues on Foreign Direct
Investment in Asian and Pacific Developing
Countries
—P.B. Rana, March 1988
Manufactured Exports from the Philippines:
A Sector Profile and an Agenda for Reform
—I. Ali, September 1988
A Framework for Evaluating the Economic
Benefits of Power Projects
—I. Ali, August 1989
Promotion of Manufactured Exports in Pakistan
No. 45
No. 46
No. 47
No. 48
No. 49
No. 50
No. 51
No. 52
—Jungsoo Lee and Yoshihiro Iwasaki,
September 1989
Education and Labor Markets in Indonesia:
A Sector Survey
—Ernesto M. Pernia and David N. Wilson,
September 1989
Industrial Technology Capabilities
and Policies in Selected ADCs
—Hiroshi Kakazu, June 1990
Designing Strategies and Policies
for Managing Structural Change in Asia
—Ifzal Ali, June 1990
The Completion of the Single European Community
Market in 1992: A Tentative Assessment of its
Impact on Asian Developing Countries
—J.P. Verbiest and Min Tang, June 1991
Economic Analysis of Investment in Power Systems
—Ifzal Ali, June 1991
External Finance and the Role of Multilateral
Financial Institutions in South Asia:
Changing Patterns, Prospects, and Challenges
—Jungsoo Lee, November 1991
The Gender and Poverty Nexus: Issues and
Policies
—M.G. Quibria, November 1993
The Role of the State in Economic Development:
Theory, the East Asian Experience,
and the Malaysian Case
—Jason Brown, December 1993
No. 53
No. 54
No. 55
No. 56
No. 57
No. 58
No. 59
No. 60
The Economic Benefits of Potable Water Supply
Projects to Households in Developing Countries
—Dale Whittington and Venkateswarlu Swarna,
January 1994
Growth Triangles: Conceptual Issues
and Operational Problems
—Min Tang and Myo Thant, February 1994
The Emerging Global Trading Environment
and Developing Asia
—Arvind Panagariya, M.G. Quibria,
and Narhari Rao, July 1996
Aspects of Urban Water and Sanitation in
the Context of Rapid Urbanization in
Developing Asia
—Ernesto M. Pernia and Stella LF. Alabastro,
September 1997
Challenges for Asia’s Trade and Environment
—Douglas H. Brooks, January 1998
Economic Analysis of Health Sector ProjectsA Review of Issues, Methods, and Approaches
—Ramesh Adhikari, Paul Gertler, and
Anneli Lagman, March 1999
The Asian Crisis: An Alternate View
—Rajiv Kumar and Bibek Debroy, July 1999
Social Consequences of the Financial Crisis in
Asia
—James C. Knowles, Ernesto M. Pernia, and
Mary Racelis, November 1999
OCCASIONAL PAPERS (OP)
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
No. 8
No. 9
No. 10
No. 11
Poverty in the People’s Republic of China:
Recent Developments and Scope
for Bank Assistance
—K.H. Moinuddin, November 1992
The Eastern Islands of Indonesia: An Overview
of Development Needs and Potential
—Brien K. Parkinson, January 1993
Rural Institutional Finance in Bangladesh
and Nepal: Review and Agenda for Reforms
—A.H.M.N. Chowdhury and Marcelia C. Garcia,
November 1993
Fiscal Deficits and Current Account Imbalances
of the South Pacific Countries:
A Case Study of Vanuatu
—T.K. Jayaraman, December 1993
Reforms in the Transitional Economies of Asia
—Pradumna B. Rana, December 1993
Environmental Challenges in the People’s Republic
of China and Scope for Bank Assistance
—Elisabetta Capannelli and Omkar L. Shrestha,
December 1993
Sustainable Development Environment
and Poverty Nexus
—K.F. Jalal, December 1993
Intermediate Services and Economic
Development: The Malaysian Example
—Sutanu Behuria and Rahul Khullar, May 1994
Interest Rate Deregulation: A Brief Survey
of the Policy Issues and the Asian Experience
—Carlos J. Glower, July 1994
Some Aspects of Land Administration
in Indonesia: Implications for Bank Operations
—Sutanu Behuria, July 1994
Demographic and Socioeconomic Determinants
of Contraceptive Use among Urban Women in
the Melanesian Countries in the South Pacific:
A Case Study of Port Vila Town in Vanuatu
—T.K. Jayaraman, February 1995
No. 12
No. 13
No. 14
No. 15
No. 16
No. 17
No. 18
No. 19
No. 20
No. 21
No. 22
24
Managing Development through
Institution Building
— Hilton L. Root, October 1995
Growth, Structural Change, and Optimal
Poverty Interventions
—Shiladitya Chatterjee, November 1995
Private Investment and Macroeconomic
Environment in the South Pacific Island
Countries: A Cross-Country Analysis
—T.K. Jayaraman, October 1996
The Rural-Urban Transition in Viet Nam:
Some Selected Issues
—Sudipto Mundle and Brian Van Arkadie,
October 1997
A New Approach to Setting the Future
Transport Agenda
—Roger Allport, Geoff Key, and Charles Melhuish
June 1998
Adjustment and Distribution:
The Indian Experience
—Sudipto Mundle and V.B. Tulasidhar, June 1998
Tax Reforms in Viet Nam: A Selective Analysis
—Sudipto Mundle, December 1998
Surges and Volatility of Private Capital Flows to
Asian Developing Countries: Implications
for Multilateral Development Banks
—Pradumna B. Rana, December 1998
The Millennium Round and the Asian Economies:
An Introduction
—Dilip K. Das, October 1999
Occupational Segregation and the Gender
Earnings Gap
—Joseph E. Zveglich, Jr. and Yana van der Meulen
Rodgers, December 1999
Information Technology: Next Locomotive of
Growth?
—Dilip K. Das, June 2000
STATISTICAL REPORT SERIES (SR)
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
No. 8
No. 9
Estimates of the Total External Debt of
the Developing Member Countries of ADB:
1981-1983
—I.P. David, September 1984
Multivariate Statistical and Graphical
Classification Techniques Applied
to the Problem of Grouping Countries
—I.P. David and D.S. Maligalig, March 1985
Gross National Product (GNP) Measurement
Issues in South Pacific Developing Member
Countries of ADB
—S.G. Tiwari, September 1985
Estimates of Comparable Savings in Selected
DMCs
—Hananto Sigit, December 1985
Keeping Sample Survey Design
and Analysis Simple
—I.P. David, December 1985
External Debt Situation in Asian
Developing Countries
—I.P. David and Jungsoo Lee, March 1986
Study of GNP Measurement Issues in the
South Pacific Developing Member Countries.
Part I: Existing National Accounts
of SPDMCs–Analysis of Methodology
and Application of SNA Concepts
—P. Hodgkinson, October 1986
Study of GNP Measurement Issues in the South
Pacific Developing Member Countries.
Part II: Factors Affecting Intercountry
Comparability of Per Capita GNP
—P. Hodgkinson, October 1986
Survey of the External Debt Situation
No. 10
No. 11
No. 12
No. 13
No. 14
No. 15
No. 16
No. 17
No. 18
in Asian Developing Countries, 1985
—Jungsoo Lee and I.P. David, April 1987
A Survey of the External Debt Situation
in Asian Developing Countries, 1986
—Jungsoo Lee and I.P. David, April 1988
Changing Pattern of Financial Flows to Asian
and Pacific Developing Countries
—Jungsoo Lee and I.P. David, March 1989
The State of Agricultural Statistics in
Southeast Asia
—I.P. David, March 1989
A Survey of the External Debt Situation
in Asian and Pacific Developing Countries:
1987-1988
—Jungsoo Lee and I.P. David, July 1989
A Survey of the External Debt Situation in
Asian and Pacific Developing Countries: 1988-1989
—Jungsoo Lee, May 1990
A Survey of the External Debt Situation
in Asian and Pacific Developing Countries: 19891992
—Min Tang, June 1991
Recent Trends and Prospects of External Debt
Situation and Financial Flows to Asian
and Pacific Developing Countries
—Min Tang and Aludia Pardo, June 1992
Purchasing Power Parity in Asian Developing
Countries: A Co-Integration Test
—Min Tang and Ronald Q. Butiong, April 1994
Capital Flows to Asian and Pacific Developing
Countries: Recent Trends and Future Prospects
—Min Tang and James Villafuerte, October 1995
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Rural Poverty in Asia, Priority Issues and Policy
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Growth Triangles in Asia: A New Approach
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Urban Poverty in Asia: A Survey of Critical Issues
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Critical Issues in Asian Development:
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Financial Sector Development in Asia
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Fiscal Management and Economic Reform
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Christine P.W. Wong, Christopher Heady,
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From Centrally Planned to Market Economies:
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Current Issues in Economic Development:
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The Bangladesh Economy in Transition
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Social Sector Issues in Transitional Economies of Asia
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Improving Domestic Resource Mobilization Through
Financial Development: Overview September 1985
Improving Domestic Resource Mobilization Through
Financial Development: Bangladesh July 1986
Improving Domestic Resource Mobilization Through
Financial Development: Sri Lanka April 1987
Improving Domestic Resource Mobilization Through
Financial Development: India December 1987
Financing Public Sector Development Expenditure
in Selected Countries: Overview January 1988
Study of Selected Industries: A Brief Report
April 1988
Financing Public Sector Development Expenditure
in Selected Countries: Bangladesh June 1988
Financing Public Sector Development Expenditure
in Selected Countries: India June 1988
Financing Public Sector Development Expenditure
in Selected Countries: Indonesia June 1988
Financing Public Sector Development Expenditure
in Selected Countries: Nepal June 1988
Financing Public Sector Development Expenditure
in Selected Countries: Pakistan June 1988
Financing Public Sector Development Expenditure
in Selected Countries: Philippines June 1988
Financing Public Sector Development Expenditure
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Towards Regional Cooperation in South Asia:
ADB/EWC Symposium on Regional Cooperation
in South Asia February 1988
Evaluating Rice Market Intervention Policies:
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Improving Domestic Resource Mobilization Through
Financial Development: Nepal November 1988
Foreign Trade Barriers and Export Growth
September 1988
The Role of Small and Medium-Scale Industries in the
Industrial Development of the Philippines
April 1989
19. The Role of Small and Medium-Scale Manufacturing
Industries in Industrial Development: The Experience of
Selected Asian Countries
January 1990
20. National Accounts of Vanuatu, 1983-1987
January 1990
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February 1990
22. Human Resource Policy and Economic
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July 1990
23. Export Finance: Some Asian Examples
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September 1990
25. Framework for the Economic and Financial Appraisal of
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26. Framework and Criteria for the Appraisal
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27. Investing in Asia
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28. The Future of Asia in the World Economy
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29. Financial Liberalisation in Asia: Analysis and Prospects
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31. Technology and Poverty Reduction in Asia and the Pacific
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Asian Development Bank, 1997
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Asian Development Bank, 1998
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Gender Indicators of Developing Asian
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Asian Development Bank, 1993
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External Shocks and Policy Adjustments:
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Indonesia-Malaysia-Thailand Growth Triangle:
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Emerging Asia: Changes and Challenges
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Asian Exports
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Development of Environment Statistics in Developing
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Asian Development Bank, 1999
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Mortgage-Backed Securities Markets in Asia
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Asian Development Bank, 1997
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Handbook for the Economic Analysis of Water Supply Projects
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Handbook for Integrating Povery Impact Assessment in
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Guidelines for the Financial Governance and
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Asian Development Bank, 2002
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Handbook on Environment Statistics
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