Social capital as a policy resource

JOHN D. MONTGOMERYPaci¢c Basin Research Center, Soka University of America

Abstract. Existing studies of social capital have provided ample evidence of its pervasiveness ando¡ered useful impressions of its political, economic, and social in£uence. That it can be also aresource for the implementation of public policies is less well understood. This paper considers howleaders use it to accomplish objectives that are exogenous to the purposes of those that originallycontributed to it. Since social capital is usually a by-product of group behavior, its existence shouldbe observed as a separate feature of a group's assets. It is most frequently observed indirectlythrough its in£uence on social systems and their policies, but it may also perform the reverse roleby becoming an instrument of policy. This paper examines some of its uses in mobilizing publicsupport through appeals to unrelated loyalties.

Political leaders frequently use social capital even if they don't recognize it: theyask loyal people to join the army, or to ¢ght for the glory of the regiment, toplant environment-serving trees and buy costly gasoline, to recycle discardedgoods, to use biodegradable paper, to respect inconvenient laws concerningproperty rights, to contribute to charity, to refrain from smoking in publicplaces, and even to report hitherto concealed income. Aspirant leaders canhave other preferences that lead to a di¡erent catalogue of requests, such asurging people to oppose a controversial war, to picket abortion clinics, or toconsume all sorts of disapproved items. Both sets of leaders seek to magnifypositive responses to their own appeals by relying on social capital ^ the stablepatterns of behavioral cooperation that already exist in the society ^ to buildon existing loyalties and to encourage the public to trust in policies external totheir immediate preferences. The variety of such appeals to social capitalemphasizes its versatility as a resource. Social capital may originate throughparticipation in speci¢c activities of civil society, but it serves also as a reservoirof potential support when a society depends upon such voluntary actions inorder to sustain a public policy (Geertz, 1963; Norris, 1999: pp. 257^270;Fukuyama, 1995).

The use of this resource for policy purposes is not an obvious aspect ofpublic life. Social capital is as devious as a public opinion poll; recognizing itas a resource requires intricate analysis of its potential in the policy process.Social capital itself is subtly masked by other dimensions of society. It is notdisplayed in almanacs, ledgers, stock market reports, or tourist advertisements;its presence has to be discovered through intuition or diligent rationalism. Yetits use is ubiquitous: it is so often invoked to enhance desired behavior in thepresent or to bring about purposeful change for the future. Sometimes this

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invocation fails because social capital is in a state of decline, so that relying onit to mobilize popular participation becomes a major challenge to leadership(Fukuyama, 1999). In either case, it should be recognized as a signi¢cantfeature of social organization that is to be distinguished from other historicalor contemporary factors.

It is only recently that observers have suggested treating social capitalinstrumentally, as a kind of silent partner that can bring about desirable aspectsof economic and political development. Thus its importance as a potentialresource for social action is beginning to appear in doctrines of internationaldevelopment banks and in university programs dealing with economic transi-tion and political modernization. But even in those settings it is still beingtreated more as a by-product of history or an artifact of social science than asa policy tool. An understanding of these internal dynamics lags behind its oftenunwitting exploitation.

The policymakers are appealing to some perceived supply of generic socialcapital when they invite functioning `groups' of any kind ^ from church choirsto political entities, athletic enterprises to participants in electronic networks ^to support public or private enterprises that are external to their immediatepurposes. They need not be identi¢able groups only; such appeals also addressamorphous `virtual' communities that are also plausible allies in various specialendeavors. By the dawn of the twenty-¢rst century, for example, it was possibleto appeal to private citizens who were bound together only through cyberspace,and thus could mobilize hundreds of thousands of hours of skilled labor, tointerpret data for the Search for Extraterritorial Intelligence project, to help inmapping the human genome, and to develop and trade advanced software.

Formal groups seem to be deceptively easy to mobilize formally, since it ispossible to rely on such recognizable social capital as the somewhat mysteriousfactor that enables their members to work together and to develop cooperativerelationships with each other and with external groups. This factor is especiallyuseful when it can generate a reciprocal trust that de¢nes values that are sharedamong participants. These relationships change over time and have both positiveand negative potentials for the groups themselves and for society (Portes, 1998).Although they may slowly change, they are constant enough to become a stableresource for policy uses. When they are exploited to serve policy purposes ofthe state or of other large organizations, they appear to be a form of invest-ment in that they create additional value. Even before the term `social capital'came into use, these relationships were recognized as a series of accumulatingrelationships that facilitated an exchange or transfer of values for social pur-poses (Barnard, 1946; Lasswell, 1972; Lasswell, Lerner and Montgomery, 1976:pp. 268^271; Lasswell, 1980).

Although social capital remains a black hole in the astronomy of socialscience, studying its manifestations as a policy resource will shed light on thestrategies and tactics employed in its use. This chapter will introduce anapproach to that end: It will consider ¢rst the conditions under which socialcapital has been observed, including its dimensions, its consequences, and

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some of its internal dynamics; second, it will consider the ways in which leadershave used social capital to advance their own organization's goals; and third, itwill examine how politicians have used social capital to advance the purposesof the state and other large organizations. The conclusion will o¡er somehypotheses regarding the role of social capital as a generic resource and instru-ment of public policy.

Strategic environment of social capital

Our studies of social capital are intended to supplement the increasing evidencethat it is a potential source of major improvements in society. Evidence of theseimprovements includes improved voting levels, a multiplicity of active member-ships, macro-level improvements in public health associated with communityactivity, micro-level successes in administering development projects, and otheroutcome measures. The discovery that there are connections between theseachievements and the trusting relationships engendered through participationin unrelated organizations suggests that such indicators may de¢ne the capa-bility of nations to expand their democratic decision-making politics or theprosperity associated with other forms of collective or entrepreneurial behavior(Putnam, Leonardi, and Nanetti, 1993; Putnam, 1993; Putnam, 2000; Norris,2000; Kawachi, Kennedy and Lochner, 1997; Kawachi, Kennedy and Glass,1999; Brown and Ashman, 1996;Woolcock, 1998; Fukuyama, 1995).

The indirect consequences of social capital have been studied extensively,but its antecedents remain less well known. It is presented as the casual andaccidental product of unrelated historical events rather than the result ofdirected human purpose. A reasonable assumption underlies these perceptions:that people cooperate in groups for their own reasons, but in the processproduce other e¡ects. There is mounting evidence that cooperation is notmerely an altruistic act, but can serve sel¢sh purposes as well (Axelrod, 1984).When people cooperate with others they hope to bene¢t themselves, for example,by encouraging reciprocity from others; by doing their own duty and beingknown for such virtuous behavior; by maintaining the social status that comesfrom keeping up with Neighbor Jones; by establishing their credentials asdutiful members of society or citizens of the state and thus laying claim tosome form of leadership; and by encouraging similar behavior on the part ofothers who may be remote from the scene. If these forms of cooperation createa virtuous cycle that becomes frequent or intense, it is not unreasonable to treatthis behavior as predictable, hence a form of social capital that can become auseful basis for policy initiatives (Coleman, 1990; Verba, Schlozman and Brady,1995; Sandefur and Laumann 1998; Norris, 1999). In such cases, social capitalbecomes an endogenous but important aspect of public policy.

These reinforcing perceptions build on the principle that even though socialcapital is not created deliberately to serve policy purposes, it can do so becauseit is a stable by-product of known actions and forces (Dery, 1998). This stability

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has sometimes suggested near inevitability, a relationship that has createdunease among those who are skeptical about over-determinism in this multi-variate universe (Rich, 1999). Rather than considering the consequences ofsocial capital as `determined,' therefore, scholars have turned to probabilityanalysis. Among the most appealing of the ¢ndings is that actions of coopera-tion with others tend to encourage `nice' responses (Axelrod, 1984). This cycleof positive expectations suggests `path dependency,' in this case the probabilitythat certain outcomes will occur in the presence of social capital. Expectationsof predictable outcomes can also enter into a virtuous cycle, transformingthemselves into self-ful¢lling prophecies.

Such prophecies are not necessarily limited to socially desirable outcomes,of course: social capital in almost any group can produce hostility and rejectionwhen the trust that binds its members together excludes other groups (Merton,1968). Durable relationships do not necessarily equal `trust,' though they serveto keep groups together. Their potentially negative consequences can producesocially self-denying prophecies, because group loyalties can stir up the impulseto reject other groups or individuals and hence to neglect one's expectedfunctions; or they can encourage individuals to take advantage of a possible`free ride,' relaxing their own e¡orts in the con¢dence that the others will carryon (Olson, 1971).

Even so, the implication that social capital has stable and positive e¡ects hasbeen widely accepted. Studies exploring these links are now so numerous andso diverse that theories about the consequences of social capital have begun toenter into the policy calculations of practitioners. TheWorld Bank, for example,has begun to explore the expectation that there will be positive collateral out-comes of selected economic development schemes (World Bank, 1994). Andgovernments as well have begun to recognize the need to adopt innovative waysof gaining access to social capital for o¤cial purposes.

One such possibility has been the use of nongovernmental organizations toadvance public policies under contract to perform certain limited functions.`Contracting out' is a useful device for bringing the private sector into thepublic arena. Such actions do not necessarily misuse the social capital of thesegroups; contracts that involve some new joint purpose do not necessarilydiminish existing functions. `Privatization' is an example, substituting contractualchanges for internal administrative reforms by entering into a new `principal-agent' relationship. Such devices enable governments to avoid undertakingcertain functions themselves, or to have to challenge politically sensitive groupsthat are already doing so. The contracting groups are expected to act in theirown right as they carry out their new responsibilities, without sacri¢cing theirown purposes in the process (White, 1991; Pratt and Zeckhauser, 1991; Smithand Lipsky, 1993: pp. 98^100).

Indeed, the social capital of these groups can be turned to policy purposes evenwithout entering into a contractual relationship. The loyalties and cooperativebehavior of a group's members are resources that can be exploited indirectly,without relying on the approval of the formal group structures. In most cases,

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drawing on social capital for policy purposes does not require engaging theservices of the groups that generated it. It is possible to exploit resources ofwhich these groups themselves have little awareness.

Group uses of social capital for internal purposes

Using social capital as a policy resource is a purposeful act, even thoughgenerating it in the ¢rst place may have been an inadvertent consequence ofcasual or ordinary organizational purposes; moreover, strengthening it is notalways a random event. Group leaders have all kinds of reasons for encouragingand nourishing their social capital. It is not unusual for participating membersto fall behind in their pursuit of common interests, and remedying that conditionis a task that leaders take on as an essential function of o¤ce. Axiomatically,leadership depends upon a membership's loyalties, ¢rst to preserve a group'sintegrity, and then to exert in£uence in society (Barnard, 1946: p. 73; Fox andBrown, 1998: pp. 485^489; Kramer and Neale, 1998). Much of a leader's worktakes the form of internal investment in the group's capacity to work together:leaders are often obliged to exhort, train, support, and otherwise strengthenthat capacity (Creed and Miles, 1996; Kramer, 1996). Unions, churches, pro-fessional associations, commercial enterprises, and other custodians of socialcapital expect to draw upon it and enlarge it as they seek to advance theirorganizational goals through lobbying, mounting public information campaigns,and occasionally entering into transactions such as bribery, all of which linklesser groups to the larger civil society. For these purposes, leaders take severalsteps: they invest in social capital by strengthening and exercising such basicingredients as the funds of knowledge that the members bring to their commontasks; they test their capacity to collaborate with other social networks in orderto build bridging linkages that will be useful; they call upon the members'collective skills at advocacy, which are important elements in civil society; theyemploy role modeling behavior to in£uence their followers; and they provideemotional and moral support to their members and supporters in order toreinforce the commitment to their cause (Stanton-Salazar, 1997). If there arefew organizations that are so independent of their strategic environment thatthey can ignore it, there are fewer still that are above deploying the socialcapital of their members to in£uence it (Barnard, 1946: p. 89). In fact, theresources that they can draw upon to in£uence it are important indicators oftheir potential.

Social capital is not passive; and it is not in¢nitely pliable. Far from beinginert resources, the loyalties that an organization's leadership needs in order tocarry out a group's purposes sometimes react vigorously to such uses (Smithand Berg, 1987: pp. 109^130). Examples are legion: members will tacitly permitthe leadership to act on their behalf only when their own values are not incon£ict; they will limit the leader's authority and legitimacy by resisting whenthe calls to action are incompatible with other goals. When teachers' unions

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seek to in£uence gender preferences in appointments and promotions through-out the educational system, even if they are only enlarging upon the internalvalues of the membership, the members will balk at policy proposals that theydeem threatening to themselves. When merchants' clubs seek to advance theireconomic preferences through legislation, their position is sometimes ambiguousbecause they must try to avoid taking positions that would injure the interests orlevels of commitment of their members. When employers as a group agree toadvocate politically correct educational activities in community schools, thedegree of their support of such proposals parallels the economic or socialinterests of their members. When village self-help programs for the poor arelaunched with the support of women's groups or of ethnic constituencies, themoderately well-o¡ and even the intended bene¢ciaries tend to resist activitiesthat seem to threaten the existing social structure. Ethnic groups are not alwaysenthusiastic about a separatist inclination when the proposed movement appearsto respond to the enthusiasms of the leaders rather than to the loyalties ofminority groups. Activists who seek to make use of social capital to advancetheir causes soon discover that there are constraints as well as assets in itscapacity to serve policy goals (Majone, 1976; Howlett and Ramesh, 1995;Bressers and O'Toole, 1998; Lasswell, 1935, Ch.V).

Knowledge of the uses and limitations of social capital is a de¢ning quality ofleadership (Burns, 1978; Barnard, 1946: pp. 32^45). Social capital a¡ects externalrelations as well as internal a¡airs, and both are important to the survival andprosperity of an organization. A favorable or at least tolerant environment isessential to internal stability, and per contra, internal cohesion also de¢nes alimit to external relations. Even the largest and most powerful organizationsare bounded by external and internal dynamics (Barnard, 1946: pp. 194^211).Followers are not easily `mobilized' when their commitment and interests aretoo diverse or are at variance with those of the leadership (Rich, 1999); changingthem is an art form requiring adaptation as well as persuasion (Weick, 1979).The same conditions pertain to the use of social capital to oppose policyproposals or actions. The uses of social capital to a¡ect both internal andexternal policies often requires compromise among the interests of individualmembers and groups. Compromise is an essential element in sustaining leadersbecause of the diverse and changing interests of the groups being courted.

Perhaps most ironic of all is the possibility of a backlash e¡ect as a group'sleadership develops and uses social capital to a¡ect the political environment.Strengthening the social capital of some groups can easily contribute to tensionswith others that are not included, thus reducing the total supply of social capitalin the act of supporting part of it.

Policy uses of social capital

The perception that social capital implies predictable consequences reinforcesthe impulse to direct it toward unrelated purposes that seem more immediate.

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Elected o¤cials and other leaders, whether respected notables or the self-selected bullies familiar to all societies, want to use it: all feel free to make theirappeals to the cooperative attitudes of various group members within their lineof sight in order to advance their preferred policy objectives. A common tacticis to o¡er encouragements and incentives for followers to join a new cause or tochannel their e¡orts to serve supposedly more productive purposes. Leadersperceive it to be their task to appeal to di¡erent (and not necessarily coherent)religious, political, or economic constituencies that they perceive as potentialsupporters. Their actions may well change the essential character of the groupsthey are exploiting, but that is not their concern (Geertz, 1963; Barnard, 1946:pp. 140^153; Brown, Chaudhury, Synghal and Tandon, 1997).

Such tactics are common enough, but perhaps the most egregious exampleinvolving manipulation of social capital for alien purposes is the corporatistpolitics of authoritarian despotisms, which characteristically try to developsupport for purposes that are otherwise unacceptable to the public (Smith andLipsky, 1993: pp. 179^182; Woolcock, 1998). Thus, Hitler mobilized hithertoindependent groups by converting their collegiality into vertical relationshipsof loyalty to himself, drawing upon all of the elements of society he couldmuster to produce the unwavering trust on which his excesses depended. HisGleichschaltung made use of ritual rhythms of the Nazi party to mobilize consentor at least acceptance among universities, publishers, commercial enterprises,golf clubs, restaurant associations, and whatever organizations could providesupportive behavior from their members (Klemperer, 1998). It is no news thatauthoritarian leaders often make use of nationalism and ethnic loyalty in orderto control a population.

Devices used to produce this follow-the-leader mentality are familiar indemocratic countries as well (Scott, 1998). There, too, leaders try to induce asubservient conformity, using methods that are not dissimilar from those of thetotalitarians. They require ceremonial oaths of allegiance, and they appeal toshared religious convictions to mask uncomfortable realities. They seek supportnot only by appealing to individuals, but also mount campaigns to convertexisting memberships, personal loyalties and all sorts of horizontal relationships,into vertical commitment to their policies.

Most states make use of social capital for quite ordinary purposes of govern-ment as well. They rely on labor groups to enlist popular sympathy for unemploy-ment insurance, and on organizations of retired persons to generate acceptanceof increased medical costs. They do not bother to speculate about the originalloyalties of these groups or the possibility that the store of social capital onwhich they are drawing may be a product of unpleasant earlier circumstancesfor which they themselves may be partly responsible, such as a pervasive socialinequality that might have created a common cause among the victims andprompted them to work together in new perceptions of self-interest (Boix andPosner, 1998). In other cases, there is the possibility that manipulating thesegroups' loyalties will change their internal coherence, to the detriment of theirmembers' more basic interests. Thus states, in support of a military adventure,

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seek to mobilize a hitherto relaxed public to induce it to take up arms even atgreat personal sacri¢ce. The only salient issue for them is how e¡ectively theycan use existing loyalties for what they see as a larger purpose. Any loyalty,whether national or ethnic or merely organizational, will do (Lasswell, 1927;Lasswell, Lerner and Speier, 1980).

In quiet times, leaders sometimes manufacture or heighten crises to divertattention away from ordinary needs that may be momentarily uncomfortable(Lasswell, Lerner and Speier, 1980). The public may be suspicious of such newambitions if they run counter to its previous loyalties; it will think cynicalthoughts about its leaders when it perceives that they are trying to convert itssupposedly `irrelevant' causes into sympathy for a preferred one. In many otherways leaders ¢nd ways to enlarge or expand the loyalties of chosen groups andcontract others, or to support desired relationships by discouraging or evenprohibiting those that are less appealing to them. Another strategy leadersemploy is to intervene when `proper' loyalties are in decline, by merging thegroups involved with others they deem preferable, or denying needed supportthey have previously given; and if they ¢nd it di¤cult to eliminate undesirableforms of cooperative behavior, they can provide the o¡ending groups withincentives to take on di¡erent functions.

Such diversions can serve desirable ends from society's perspective as well.For example, political leaders have made use of social capital to improve schools(Waddock, 1993), to in£uence environmental activities (Gray and Hay, 1986), topopularize healthful behavior (Kawachi, Kennedy and Lochner, 1997), and inan almost in¢nite variety of other ways.

In pluralistic societies, if the leaders need to go beyond separate appeals toorganized groups, they can seek to mobilize consent by building on existingrelationships among (as well as within) di¡erent groups. By actively encouraginglinkages among like-minded but independent groups, they hope such benevo-lence will stimulate trust in themselves and encourage popular involvement inlocal policy ventures to levels of support for higher causes. This strategy is morecomplex than that which prevails in authoritarian societies, because circum-stances do not permit leaders to treat group allegiances as a homogeneousresource. Authoritarian leaders do not need to distinguish among or rely uponhorizontal relationships among groups, since they can treat all of them as`identical' units. Democratic leaders, in contrast, have to appeal to discreteand sometimes inconsistent loyalties of isolated groups in order to increase theircommitment to a common cause.

In pluralistic societies, this dynamic becomes even more complex when thereis a latent con£ict between the interests of the subordinate group's leaders andthose of the political mobilizers, or if there is tension among individual groups.These constraints limit the freedom of leaders to act independently or toindulge their personal whims at the expense of the interests of the civil society.National notables, like those in local associations, have discovered that as theirmembers trust each other more, they trust their leaders somewhat less (Coleman,1998; Ziegler, 1998). If the leaders call for changes in these loyalties, the con-sequences are unpredictable.

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These activities help explain the conditions that distinguish the constitutionalbehavior of one state from that of another. They also can imply something aboutits future prospects because they rely on the £uctuating supply of social capital.Countries or regions with high levels of horizontal social capital are nearlyalways viewed with hope, e.g., as being capable of sustaining democratic govern-ments or prosperous economies (Putnam, Leonardi and Nanetti, 1993); whilestates where expressions of trust take the form of hierarchical respect for anauthoritarian `man-on-horseback' are considered poor prospects because thedesired positive achievements are so rarely found there.

E¡orts to use social capital to manipulate the public behavior of constituentorganizations are consistent with almost any de¢nition of politics. Examplesabound in the studies commissioned by the Paci¢c Basin Research Center, afew of which are reported in the subsequent chapters in this volume and inother PBRC publications. A study by Minghong Lu explored how Chineseleaders made use of the school system to encourage new forms of commercialenterprise, and then appealed the rising class of graduating managers andentrepreneurs to transmit other values such as the encouragement of one-childfamilies. They were treating the products of one policy as a form of socialcapital to advance another. Charles Norchi studied what happened when Indiaenforced regulations regarding piracy of copyrighted material, where the purposewas to protect foreign investors but also provided protection for cultural tradi-tions that now became codi¢ed as intellectual property. Yoonmi Lee's work onSouth Korea described a less successful ploy: how the leaders began prepara-tions for reuni¢cation by establishing elaborate educational curricula intendedto reinforce loyalties to family members across the border, only to ¢nd that theapathy, distrust and suspicion of the younger generation proved to be a seriousobstacle to developing the social capital that was intended to simplify re-establishing cultural links to the North (cf. Youniss, McLellan and Yates,1997). Similarly, Chin-ju Mao studied how the educational curricula in Taiwanhad ¢rst to stress a¤nities with Chinese traditions and subsequently servepluralistic purposes by celebrating the indigenous culture. In examining theuse of trade unions to mobilize social capital, Bill Taylor found that laborunions in China were expected to reinforce some sort of discipline in state-owned enterprises but encourage deviations from it in foreign enterprises.Thomas Carroll's study of several Latin American countries demonstratedhow policymakers used rural development federations originally to respond toself-help needs but later to introduce preferred agricultural practices as groupnorms. Similarly, the cases Quinones studied in the Philippines and Mexicoshowed how village-level agricultural organizations were used to promotenational health standards (cf. Flora, 1995). Indeed, it is common in the experi-ence of nongovernmental organizations to start with domestic productivitygoals and then add health and environmental objectives following suggestionsfrom international organizations (Upho¡, 1986; Ascher, 1995). John Campbell'sstudies in Japan and elsewhere in Asia described how trade union members incountries undergoing the transition from communism turned from advancing

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labor conditions to promoting an international code of labor standards. MaryBrinton examined arrangements that linked schools and employers and showedhow their educational policies created expectations that served to open upthe labor market. Christopher Candland's study of religious organizations assources of social capital illustrated their characteristically di¡erent contributionsto political purposes. Catherine Marshall's analysis of teachers' unions explainedhow they enlarged their workplace purposes to serve the cause of gender equityin the U.S., Australia, and Canada. Abdul Hye Mondal studied grassrootscommunity development e¡orts in Bangladesh and demonstrated how theyadvanced national goals and the cause of social equity. Haunani-Kay Trask'shistory of independence aspirations among indigenous Hawaiians described amovement that the government tried to use to reinforce tourism but which inthe end proved to be a base for widespread protests against injustices of thepast.

Studies like these suggest that social capital is extremely heterogeneous andtherefore somewhat unpredictable as a policy resource. There is wide variationin its pliability to external uses, depending on such factors as the degree ofethnic and cultural diversity in a country, its level of economic development, thestrength and length of cultural traditions of cooperation, the relative solidity ofhorizontal (inter-group) linkages and vertical (government-civic society) ties,and the density of NGOs available as counterparts to public policy. Mappingsuch variations helps identify the diversity of ends to which social capital can beput in the service of exogenous policies.

It seems reasonable to conclude that most leaders are aware of these di¡er-ences as they attempt to bring di¡erent associations together to work for acommon political cause (Putnam, Leonardi and Nanetti, 1993). Even so, therehave been striking successes in recent years in heightening the consciousness ofassorted organizations in order to serve larger purposes like human rights andworld peace, even though these organizations may have had no such purposesin their original charter. There is no shortage of cases in which social capitalhas become an asset in advancing policy preferences of national policymakersand leaders of organizations and social movements.

Conclusion

The many studies of social capital now available at the national level haveprovided useful information about its quantitative and comparative dimensions,which in turn has permitted wide-ranging speculations about links to democ-racy and to economic viability. Most scholars have concluded that both sets ofoutcomes depend upon the degree of trust or cooperation in a society (Paxton,1999).

How this trust has come about has been explored as well. The accompanyingFigure 1 suggests a heuristic way of classifying some of the events and outcomesthat social scientists have examined. Most of the evidence presented in this

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volume report its presence in small-scale organizations. Such case studies arehumble but valuable (Miles and Huberman, 1994); and the inferences drawnfrom them are supported by massive data bases at larger levels as well (seeInkeles in this volume). From these facts we can draw further inferences regard-ing the use of social capital for speci¢c policy purposes both within and beyondparticipating groups. At both levels, scholars have continued to regard it as apositive feature (Tocqueville, 1969), without, however, overlooking less pleasantoutcomes that also occur (Smith, 1997; Portes, 1998).

References to social capital have become familiar to the public in descrip-tions of voluntary events such as participation in town meetings and PTAgroups, the kinds of activities that £ourish when horizontal relationshipsamong members are strong enough to support a vigorous civic life (see row 1 inthe accompanying Figure 1).When such organizations expand or enlarge theirservices, they are considered to be `increasing' their social capital, a processthat they take as a primary function of their existence (cell 2c).When they seek

11

AEvents sequence

BIssues and choices

CSocial signi¢cance

DReferences

1. Individuals decide tocooperate for a speci-¢ed purpose

Whether to co-operate or not

Possible contributionto `social contract'

(Hobbes, Rousseau)

2. Individuals chosecooperation strategy

How to encourageand respond toothers' level ofcooperation

Possible creation ofsocial capital

Axelrod, Kramer

3. Act of cooperationbreeds trust

How others co-operate in response

Autocatalytic processor self-ful¢llingprophecies

(Hume, Markov),Merton

4. Individual leadersconvert trust intosocial capital orgroup resource

How groups encour-age increased inter-nal cooperation

Strengthening of civilsociety

Barnard,Weick

5. Social capital pro-duces positive sidee¡ects

How groups evaluateand use social capital

Improved prospectsfor democracy,capitalism

Coleman, Putnam,Rogers Smith,Norris, Fukuyama

6. Social capital pro-duces negative e¡ects

Which groups areexploited

Corruption, exploita-tion, criminalization,apathy

Olson, Loury, Portes

7. Political leadersselectively use socialcapital for publicpurposes

How group loyaltiesserve public purposes

Changes in civilsociety, implementa-tion of public policy

Smith and Lipsky,Woolcock, Kawachi,Brown

Fig. 1. Cognitive terrain of social capital research.

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to in£uence public behavior, the function is sometimes (though not always)secondary to that purpose (row 3). A tertiary function occurs when grouployalties are enlisted in the service of a public policy, the primary focus of thisvolume (row 4). All such functions can, of course, in£ict social harm (row 6); noactions a¡ecting society can assume the mantle of benevolence (row 5) unlessthey create conditions in which individuals can ful¢ll their own moral aspira-tions or unless they are contributing to a moral community (row 7).

Sordid manipulations of social capital are also legion. The most familiarexamples are cases in which national and local leaders try to exploit coopera-tive behavior in order to enrich their own portfolios. Such cases, especiallywhen they deviate from the reservoir of public trust, do not contribute much topublic well-being (cell 6c of Figure 1). Even when such e¡orts are feeble, unwit-ting, or counterproductive, the fact that they take place at all challenges theview of social capital as a casual, inert by-product of civil society, or as prede-termined and thus lying beyond the reach of human purpose. Social capital is aneutral resource that can serve both moral and immoral ends (cells 5c and 6c ofFigure 1).

The policy ends that social capital serves are almost too numerous to list. Ina searching discussion during a seminar on the subject, participants in thePBRC research mentioned some of the policy uses they had observed in thecourse of their work: to develop educational institutions, to achieve socialjustice by improving distributive equity, to speed or alter the course of economicdevelopment, to enhance individual feelings of e¤cacy in social causes, to respectdiversity and human dignity, to preserve environmental resources, to contributeto sustainable development, to resist change and fend o¡ external in£uences, todevelop and preserve communal ways of life, to maximize and reify trust, tocontribute to group survival, to in£uence the £ow of communication, to enlargecon¢dence in public institutions, to homogenize social and cultural elements inthe society, to empower favored groups, to express group independence, toencourage investment in `the commons,' and to establish and link elites. Theseconsequences are not, of course, consistent, and not all of them are sociallybene¢cial. Many of them are not related to the `cooperation for a common good'that led to the creation of the social capital in the ¢rst place. But that suchtransformations are observed so readily suggests the possibility of developinghypotheses about this signi¢cant feature of our collective behavior.We observethat it is easier to strengthen, to reinforce, and to add support to an organiza-tion or community than to change it (Loury, 1995), but we also observe thatchange is also a permanent feature of human existence linked to social capital.We know that formal organizations like NGOs or educational institutions aremore amenable to external controlling in£uences than are informal social net-works based on kinship (Chen, this volume), but the prospects for peace andharmony require e¡orts to elevate the primordial bases of human intercourse aswell. Since we know relatively little about the settings in which governments cane¡ectively use social capital for policy purposes, we have to rely on intuitivejudgments about constraints on such e¡orts. We expect that the valence of

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social capital will re£ect ethnic and cultural diversity, the level of economicdevelopment, the vitality and duration of cultural traditions, the prevalence ofhorizontal (intergroup) links, and the density of NGOs, but we don't knowmuch about the importance of the degree and interaction among these factors.We are vaguely uncomfortable about the possible loss of independence in thestructure of civil society as governments increasingly seek to contract withNGOs to carry out public policies (Economist, 2000), because there is the riskof `colonizing' them and thus destroying the very elements that made themdesirable in the ¢rst place (Smith and Lipsky, 1993: pp. 12^14, 146^167; Brown,1997).

Even with the full collaboration of an organization's leadership, it is not easyfor outsiders to redirect it (Brown and Ashman, 1996; Upho¡, 1992), and it maybe even more di¤cult to destroy elements of social capital when they o¡end thepublic interest. The massive powers of the state seem to be insu¤cient evenagainst subversive loyalties that threaten its existence or its larger purposes(ironically, many Americans were reassured by the dismay the Soviet Unionexperienced at the persistence of the church in a society that it was trying toconvert to atheism). Similarly, in countries that are exploiting ethnic loyaltiesfor militant purposes, it is sometimes reassuring when these `primordial' feel-ings vigorously resist change. Ethnicity and religion can be both dysfunctionalto a nation in transition and a source of communal strength in times of stress.Economic behavior of well-entrenched classes is similarly resistant to nationalgoals, as experience in post-communist countries is repeatedly a¤rming.

Experiences with social capital suggest several basic conclusions about itspotential use in spite of these uncertainties:

1. Organizations that have persisted on the basis of a common purpose orshared bene¢ts have developed a capacity for cooperating in activitiesthat often lead to immediate and satisfying ¢rst-order consequences. Thislatent potential constitutes a form of social capital that may be used toadvance second-order policy purposes.

2. There is a risk in using social capital for second-order goals, because suchuse may divert the participating organizations from their original purposes.The consequences of this diversion may not be compatible with the largerpurposes of the policy being served. Among other things, these actionscan enlarge the scope, reputation, and in£uence of the leaders of theseorganizations, who in turn can pose a threat to the status quo. If at thesame time they deplete an organization's original strengths, the utility ofits social capital is reduced even if the e¡ort is otherwise successful.

3. Appropriate uses of social capital can enrich the e¤ciency or e¡ectivenessof a policy and at the same time strengthen the participating organizations'commitment to the values and bene¢ts of the exploiting organization.Such side e¡ects can thus be either positive or negative for the society asa whole.

4. Not all forms of social capital are equally usable. There is a range of

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di¤culties encountered in using it for policy purposes, depending in parton the psychological disposition of individuals and groups whose participa-tion is sought. For example, ethnic ties appear to be harder to redirectthan religious loyalties (Smidt, 1999; Fukuyama, 1999), which in turn areless amenable to change than economic behavior.

5. It is nevertheless often useful to think of social capital as a generic policyresource for several reasons:

à First, conceiving of social capital as a latent element of social organiza-tions reminds us of the need to disaggregate the notion of `the public,'which indeed is rarely homogenous and in¢nitely pliable, and insteadto consider the capacity of di¡erent groups to serve public interests.

à Second, the de¢nition of social capital as a policy resource o¡ers relieffrom deterministic theories of change. A judgment against a Muslimstate on the ground that its laws and organization automatically resistany form of pluralism or entrepreneurship is a disservice to moredisaggregated approaches that are more likely to support policy initia-tives. The hope that society may be changed by attacking its funda-mentals is misguided.

à Third, this interpretation of social capital can introduce purpose andresponsibility into public decisions to give moral coherence to civilsociety and to impose restraints on capricious or despotic groups.Conscious use of social capital for policy purposes implies that thereis a coherence in group loyalties that deserves respectful notice.

Viewing social capital as a resource invites consideration of how politics a¡ectboth its status and its use. Even though its origin is usually a by-product ofother social purposes, it is a manifestation of the human will; and even when itclaims no moral dimension of its own, it may be a¡ected by something that hasdone so.

Social capital has been historically both a consequence of old human pur-poses and a resource for new human causes.

Acknowledgements

The author is indebted to the following friends and colleagues for helpful andsearching criticisms of an earlier draft: Mary C. Brinton, Je¡rey Broadbent,Thomas F. Carroll, Xiangming Chen, Milton J. Esman, Nathan Glazer, JohnM. He¡ron, Alex Inkeles, Steven Kelman, Robert D. Putnam, AndrewWillard,and toVirginia A. Kosmo for carefully con¢rming the references and citations.

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