Community Capacity and Governance – New Approaches to Development and Evaluation
for more localized policy development. Additionally, the international forums on sustainable
development have provided a vision that all stakeholders can strive toward under their own local
Like many of the criticisms of alternative development, sustainable development has been
said to be too jargon-laden and has been co-opted by intranational organizations leading to
general ineffectiveness and disdain toward the concept (Victor, 2006). Victor (2006) laments
about the “overspecialized and largely meaningless checklists and targets” that have become a
part of the common rhetoric on sustainable development from the UN, as well as the consensus
driven summits that have yielded “broad and incoherent documents and policies (p. 92).”
Furthermore, Victor (2006) argues that the original intent of sustainable development, the
equitable importance of the three pillars of economic growth, environmental conservation and
social justice, has been diminished by the modern association of sustainable development with
only environmental protection (p. 97).
Victor (2006) suggests that sustainable development can be revived if: 1) poverty alleviation
is made a priority, 2) the environmental bias is eliminated, 3) local decisions are favored, and 4)
new technologies are tapped (p. 95). This critique largely fits in with the main tenets of
alternative development as described here. The only modification to Victor’s criticism is that
there is still a place for international directional setting, but localization and operationalization of
these objectives must be more highly considered and acted upon.
Consistent with Friedmann and Sen’s view of alternative development needing the state,
sustainable development also must utilize the state and the capacities it has at its disposal in
order to be successful. Carlos Aguirre (1998) outlines seven requirements for the success of
sustainable development. They are:
1) A political system that secures an effective citizen participation;
2) An economy that generates a surplus and technical and scientific knowledge;
3) A social system that provides solutions to distortions created by non-concerted
4) A productive system that respects its ecological base;
5) An innovative system that is continuously looking for new solutions;
6) An international system that provides sustained frameworks of trade and financing; and
7) A flexible administrative system that is capable of managing the complexity of social
institutions and systems and correcting distortions (pp. 186-187).
Aguirre’s requirements incorporate many of the ideas that are advocated by alternative
development such as participation and localization, as well as environmental protection.
However, he also emphasizes the importance of a well operating governance system, which is a
valuable consideration for development, particularly in terms of creating policy with long-term
views (Aguirre, 1998, p. 198). Aguirre and Victor agree local entities must be involved in the
decision making process and emphasize the importance of technology. The pair departs on the
importance of environmental considerations and governance systems.
Some have criticized alternative development, and indeed all forms of development, as being
a Euro-American construct imposed from the outside on developing regions around the world
(Friedmann, 1992, p. 12). This critique can be easily made because the origin of ODA and other
non-governmental organizations (NGOs) is often in the already developed countries of North
America and Europe. However, development itself is not something that is only being
undertaken or imposed by outside entities. Most governments, institutes, and organizations in
developing countries care significantly about the well-being of the people they serve, and
alternative development speaks to this concern and offers a framework of understanding that is
more localized and more directly benefits people’s lives. Furthermore, one of the reasons that
this study is being undertaken is to examine development, alternative or otherwise, in the context
of developing Asia through the eyes of those whom it affects most, the impoverished rural
people. The cases of rural revitalization in Japan (Chapter Five) and the community capacity
assessment in Pagudpud (Chapter Seven and Chapter Eight) are analyzed under the alternative
development paradigm, seeking to better understand development and the policies involved in
promoting development from the people that are affected most by them.
1.3. Rural development
Alternative development can be considered an approach to development, and rural
development is an umbrella for the special development concerns of rural areas. The terms are
not mutually exclusive. In fact, an alternative development approach can be applied to rural
development, and indeed, may be the best option.
Many rural communities, especially in developing countries due to their disproportionate
share of the world’s poor (Cling, 2002, p. 36; IFAD, 2001, p. 1; Quibria, 1993, p.1), are
struggling to find new ways to sustain and promote social and economic development.
Strategies for rural development and economic advancement have yet to come to a full consensus
on how to achieve effective rural development. However, areas that have a profound sense of
community and commitment can produce great outcomes with regards to development and
poverty reduction (Cling 2002, p. 34).
With over one billion people worldwide living in poverty (IFAD, 2001, p. 1; Quibria, 1993,
p. 1), there is a need to focus on development and poverty alleviation (Sachs, 2005). The bulk of
impoverished people reside in rural communities (IFAD, 2001, p. 2), calling for greater attention
to those areas in order to achieve development and poverty alleviation goals (Cling, 2002).
Fortifying rural economies has benefits greater than improving the lives of the people in rural
communities; it can contribute to food security and the reduction of rural-urban migration, thus
reducing urban poverty and related issues (IFAD, 2001, p. 2; Sachs, 2005, p. 232).
The field of rural development began growing in the 1950s and now encompasses more than
just economic development and is considered multi-disciplinary (Behera, 2006, p.7). The
reluctance of the global community to recognize rural development as an integral part of
international development initially slowed its progress (IFAD 2001, p. 15). Rural development
has its roots in community-based development and employs a bottom-up approach to improving
rural communities through decentralization, participation, and governance (Behera, 2007, p. 14;
Erni, 2006, p. 29; Olowu, 1989, p. 226; Robinson, 1997, p. 31).
Rural development looks at economic development in terms of production, as well as
distribution of the products (Behera, 2007, p. 15). Rural poverty is the main focus of rural
development (Behera, 2007, p. 15). It may be the case that through rural development the poor
raise their standard of living, but if the rise of the rich is also accelerated, inequality will persist
(Behera, 2007, p. 36).
Rural poverty reduction and asset equalization assists economic growth (IFAD, 2001, p. 2).
Assets empower the rural poor by increasing their incomes, reserves against shocks, and choices
to escape from harsh or exploitative conditions (IFAD, 2001, pp. 4-5). The main idea is to
provide opportunities to the rural poor by reducing the structural barriers to their poverty
alleviation and quality of life improvements.
Like alternative development, rural development focuses primarily on people in rural
communities harnessing their assets and abilities to pursue local objectives (Behera, 2007, p. 16;
Friedmann, 1992, p. 2). Developing local communities, especially in rural areas, is an important
strategy to promote equitable development and poverty alleviation (Asian Productivity
Organization, 2000, p. 1). However, community building and civil society development are
difficult in rural areas (Pavey, Muth, Ostermeier, & Steiner Davis, 2007, p. 91).
Much of rural development is focused on agriculture because the majority of the rural poor
make their living by farming, either with their labor or their land (Cling, 2002, p. 36; IFAD,
2001, p. 2; Quibria, 1993, p. 56). Economic development strategies in rural areas are often
focused on small-scale industries (Fleming, 2009), such as agro-processing or harnessing local
creative talents or skills. The WB (2002) says that agricultural production is desirable for three
reasons: 1) it increases the food available to the cities, 2) it minimizes pressure on biodiversity
and on marginal agricultural areas, and 3) it leads to dynamic rural-urban linkages (p. 14).
Unfortunately, governments in developing countries often intervene in agricultural markets in
ways that are not in the best interest of the farmers (Bates, 1998, p. 356). Examples of this
include adopting low prices, policies for farm products and subsidizing the prices of farm
production products and equipment that are often not utilized or available to small-scale, poor
farmers (Bates, 1988, p. 357).
Rural women face extra hardships, particularly in areas that have difficulty obtaining water.
This is because women and girls typically sacrifice their time, and often their education to collect
water from distant sources (Watkins, 2006, p. 2). Water systems are a challenge to all rural
households because they are usually not connected to formal service networks and have to
manage their system on their own, sometimes in conjunction with the local administration, as
well as being inappropriately matched with or experience a complete lack of water technology
(Watkins, 2006, p. 10).
The International Fund for Agricultural Development (IFAD) (2001) suggests that there are
four critical but often neglected themes in rural development: 1) access to assets (physical and
financial), 2) technical and natural resources for rural poverty reduction, 3) markets for the rural
poor, and 4) institutions for the rural poor (p. 4). The WB (2002) and Quibria (1993) echo the
need to build rural agricultural institutions. Quibria (1993) also notes that there is a need for
greater access by the poor to cultivatable land and credit, which is similar to the access to assets
described by the IFAD. The WB (2002) adds the need to create off-farm opportunities to
diversify rural incomes (p. 14). The diversification of incomes allows for greater risk taking and
investment, thereby empowering rural farmers by developing their voice and potential for
political participation (WB, 2002, p. 14). These themes need to be addressed in order to
formulate effective rural development policies.
The shift from top-down to bottom-up mechanisms can be seen from the 1980’s (Erni, 2007,
p. 291). This shift acknowledges the value of indigenous technical knowledge and the ability of
the poor to contribute to solutions to their own issues, and a rejection of overarching theories of
action, instead recognizing the uniqueness of local experiences (Erni, 2006, p. 291). Both
practice and theory reflect this shift and can also be described as moving toward an organic,
holistic, participatory approach with management and cooperation with local institutions
(Sharma, 2000, p. 72).
Dele Olowu (1989) describes some issues with top-down development planning by using the
African experience with development. Olowu (1989) states that “...past centralized efforts,
however well-intentioned, were marked by their failure to benefit the rural poor… (p. 202).” He
goes on to say that there is a “tendency for African governments to treat their own people and
indigenous institutions as obstacles to development rather than as contributors to [the] process”
and that this paradox is an explanation of the continent’s continued underdevelopment (Olowu,
1989, p. 202). Interestingly, Olowu also notes that development is perceived by central officials
as the application of modern knowledge to traditional societies, as was the interpretation of their
colonial predecessors (Olowu, 1989, p. 220). It has also been suggested that rural development
itself is an interventionist tool of post-colonial states with the intention of only currying to the
interests of the external donors rather than the needs of the people (Akhter, 2006). This mind set
presumes that rural people are ignorant (Olowu, 1989, p. 220) and unable to contribute to their
own development and problem solving; a problem that is sadly persistent to this day in Africa
and elsewhere. While Olowu is specifically talking about Africa, similar trends can be seen in
developing countries around the globe, further adding to the paradigm shift to favor local
development planning and community participation in an effort to make actual progress in
development and poverty alleviation, as well as to empower local people.
Integrated development and neo-endogenous development also have similar tenets to rural
development, namely their focus on the cultivation of indigenous capacities to bring about
development and the emphasis on local actors working together to achieve local objectives
through the use of local resources (Ray, 2006, p. 261). When rural development is combined
with community-based development it is known as integrated rural development (Robinson
1997, p. 31).
The participation of various sectors of the rural community in development is the key to their
success. Behera (2007) notes that actors that are excluded from policy and state mechanisms are
excluded from rural development markets, leaving various groups inequitably empowered (p.
30). Participation strengthens the ability of those involved and holds firmly to the belief that
people should have the opportunity to contribute to their own fate (Behera, 2007, p. 38). This
demonstrates the need for careful planning and consideration of the local context, particularly in
terms of groups and demographics, as well as their active involvement in order for development
initiatives to be broadly successful.
It should be noted that in order for people to be able to participate there has to be some
benefit for them to do so (McMillan & George, 1986, p. 13) and they have to have the ability
(time) and capability (skills) to contribute as well (Behera, 2007, p. 38). This inherently means
that participation is not available to all, thereby excluding some (Behera, 2007, p. 38). This
critique can only be overcome if there is some level of community capacity building and through
the provision of opportunities for participation in the development process that is not limited by
certain lapses in capability (i.e. reading, writing, etc.).
Bottom-up and people-centered development involves various modes of participation and
empowerment, but ultimately rely on the capacity that people have to be involved in the
development process in terms of physical capabilities, human resources, and community
capacity. Rural communities often lack this development capacity (McGuire, Rubin, Agranoff,
& Richards, 1994, p. 426), compounding the difficult task of rural development. However,
ultimately, local people have the capacity for self-development (Erni, 2006, p, 314) and various
other latent capacities such as natural capital, human capital, and social capital (Erni, 2006, p.
315). These two differing stances demonstrate the need for a better understanding of the various
capacities that rural communities have and the ways in which they can be activated to promote
1.4. Community Development
Like rural development, community development is a specialized form of development
focusing on the local level. An alternative development approach is most often found in
community development, and some advocate for a community development approach to rural
development. There is much overlap between these categorizations of development. This
section will delve into the considerations and mechanisms of community development.
Community development, like other types of development, is plagued with confounds by
both practitioners and policymakers. Some issues facing the community development field are:
a) the potential of outside agents to jump start community revitalization efforts where they are
currently lacking; b) the roles of those outside agents, including guidelines for community
development partnerships and program management; c) strategies to broadly engage the private
corporate sector in community development; d) the value and limits of a consensus based
approach to community organizing; e) the benefits and problems of focusing community efforts
on real estate production; f) the key requisites for sustaining community development efforts;
and g) the role of social capital in community development (Gittel & Vidal, 1998, p. 9).
Ross Gittel and Avis Vidal (1998) present a conceptual model of community development
consisting of: 1) program or organizational design and implementation attributes; 2) intermediate
outcomes (enhancement of commitment, capacity and control); 3) long term measurable
outcomes; 4) local context and 5) external agents (pp. 24-25). These five components of
community development describe the items that need to be addressed in the formulation of a
community development policy.
In addition to the conceptual model of community development, Gittel and Vidal (1998)
present eight necessary components of a sound development policy. The eight C’s of
community development are:
1. Comprehension – how well stakeholders understand the process, the potential effects, and
the strategies implemented in a development policy;
2. Credibility – standing of the policy among community stakeholders, including
participants and practitioners;
3. Confidence – assurance that the policy will lead to results and perceptions of the policy’s
reputation (reliant on credibility);
4. Competence – know-how in the technical, financial, and organizational details of a
5. Critique – reflection and review of the policy by stakeholders;
6. Communication – the policy has ongoing participation between stakeholders (a prerequisite
for comprehension confidence, and critique);
7. Congruence – how well a development policy match various other sectors and levels of
8. Context – how well a policy is suited to the situation/community it is applied (Gittel &
Vidal, 1998, pp. 147 – 171).
The eight C’s of community development begin to formulate a conceptual framework for
policy making that will meet its objectives and truly serve the people it is intended to benefit.
Community development activities have increasingly focused on civic capacity and
community building and have been framed in terms of the capacity a community has to act, and
on their assets rather than on their needs and problems (Gittel & Vidal, 1998, p. 14; Kretzman &
McKnight, 1993, p. 1). It is a semantic argument, but it is important to move toward
emphasizing a community’s assets and away from a community’s problems because problems
are accompanied with negative connotations and call for solutions that are multi-faceted, difficult
to accomplish and may well be out of the community’s capacity and/or control (Kretzman &
McKnight, 1993, p. 4). Assets are also important, particularly internal assets, and can include
natural, physical, human, financial, organizational, and institutional assets (Beaulieu, 2002, p. 2;
Kretzman & McKnight, 1993, p. 6). Kretzman and McKnight (1993) advocate for what they call
an “alternative community development” that is asset-based, internally focused, and relationship
driven (p. 8). Uncovering the assets in a community promotes community development that
engages local people, enabling them to achieve improvements that truly benefit people across the
community (Beaulieu, 2002, p. 3, 5).
Building capacity in a community is related to the concepts of autonomy and agency, which
can be defined as ‘‘the capacity of people to order their world, the capacity to create, reproduce,
change and live according to their own meaning systems, to have the powers to define
themselves as opposed to be defined by others (Bhattacharyya, 2004 as cited in Pavey et al.,
2007, p. 92).’’ The promulgation of agency and autonomy should be the ultimate goals of
community development (Pavey et al., 2007, p. 92).
This emphasis on the participation of the people in a community can be found in practical
initiatives, such as the Development of Humane Action Foundation (DHAN) in India. DHAN
uses a bottom-up process focusing on community interaction, providing learning opportunities
for both the people in the community and the development practitioners who wish to serve them
(Sastry & Srinivasan, 2007, p. 379). The project uses what they call an “enabling model of
community development” that is adapted to the particular context in the community (Sastry &
Srinivasan, 2007, p. 379). DHAN promotes local institutions and organizations that are selfreliant
and self-managed, and directly reflect the interests of the community, noting that the
external practitioner does not always fully understand the local situation and that the people
themselves are the best judge of their needs (Sastry & Srinivasan, 2007, p. 380).
An interactional approach to community development looks to build community capacity so
that community members can more fully govern their lives according to their values and interests
(Pavey et al., 2007, p. 90). This approach recognizes a community as a dynamic system,
appreciates the need to consider the community’s unique and changing situations when crafting
development policy that is meant to be truly beneficial to all in the community, rather than a
select few, and pays credence to the process of this development (Pavey et al., 2007, p. 93).
For the purpose of this work, a general alternative development approach is taken and many
of the understandings of rural development are acknowledged because the primary focus of this
research is on rural areas. Both of these approaches are then combined with the tenets of
community development, since the community is the preferred unit of analysis and
implementation for effective development in this work. Additionally, the cases from Chapter
Five and Chapter Seven support the importance of focusing on community development and
progress concepts related to it, such as community capacity.
Now that the imperative of development has been established and the prevailing paradigms
of development have been explored, it can be seen that the community is an integral part
development planning and rhetoric. However, the meaning and significance of community is not
universally recognized. For the purpose of this study, community is put forth as the primary unit
of analysis and the most relevant area to focus development efforts. This is because so many in
the development field have emphasized the importance of community and localization (see Gittel
& Vidal, 1998; Kretzmann & McKnight, 1993; Pavey et al., 2007; Sastry & Srinivasan, 2007),
but also because of the recognition of the interconnectedness of policies between the various
levels and the need to focus on holistic policy-making with emphasis on the local level (Clinton,
1996). Due to this, it is first necessary to uncover what is meant by community and to reiterate
its importance in this dialogue.
The construct of community is a recent addition to academia since it was introduced by R.M.
MacIver in 1917. Community has largely been studied and dissected by sociologists and social
psychologists, none of whom, sadly, have very much resonance with the powers that be in the
corporate or political arenas. In fact, some might even consider social interests in politics and
business as dangerous since Marx was so blatantly manipulated by those with a lust for power
under communism and as Smith has been touted by capitalist greed-mongers. However, through
a closer examination of community, the basic functions of human interaction, those comprising
the needs of the individuals and the needs to the group, begin to take shape in meaningful and
Community studies has been criticize for its lack of theory and lack of empirical studies
(Figueira-McDonough, 2001, p. 13), and had been losing interest through the middle part of the
twentieth century. Due to the uniqueness of each community and the preference of researchers
to use case studies and other qualitative methodology, little has been identified in terms of
fundamental dimensions common to communities (Figueira-McDonough, 2001, p. 13).
However, some analytical framework for community have been outlined, some of which will be
discussed in this section. What can be unanimously recognized, and is reflected in the various
considerations of alternative and community development, is that an understanding of each
community on its own terms is necessary in order for development initiatives to be successful.
Otherwise, if overarching models and methods are strictly employed in every community the
outcome is usually a community that conforms to the model rather than its own unique situation
(Figueira-McDonough, 2001, p. 14). This is not saying that there is not a need for an analytical
framework; however, a framework for community analysis should be reflexive and adaptable.
Furthermore, in terms of policy-making, a three-prong approach should be taken combining
adaptable theoretical frameworks about community, the issue at hand, and practice theories
(Figueira-McDonough, 2001, p. 14). This work takes this three prong approach, combining
theories and knowledge from community, development, and governance fields.
A review of approximately one hundred definitions of community in the 1950s found that
nearly 80% included geographical area as a major defining characteristic (Hillery, 1955 as cited
in Figueira-McDonough, 2001, p. 9). By the 1960’s the concept of community had expanded to
include local norms and networks (Warren, 1963, as cited in Figueira-McDonough, 2001, p. 10).
The concept of community has been broadening over the past sixty years; however, many
authors still fall into the propinquity versus personality dichotomy. Gusfield (1975, as cited in
McMillan & George, 1986, p. 8) articulates two major ways in which a community is described:
either as a geographical location or a congregation around quality of character in human
relationships (see also Fellizar, Velo, & Bernardo, 1994, p. 205; Friedmann, 1992, p. 4). These
two basic definitions of community are typically ascribed to in a mutually exclusive fashion
depending on the interest of the person using the term.
Communities formed around a quality of character in human relationships are often defined
as gemeinschaft, personal communities, and communities of interest or practice (Figueira-
McDonough, 2001, p. 2; Johnson, 2007, p. 277; McMillan & George, 1986, p. 14); while
communities based on a geographic location are sometimes referred to as gesellschaft,
neighborhoods or villages (Clinton, 1996; Figueira-McDonough, 2001, p. 3).
Gemeinschaft and gesellschaft are commonly referred to in discussions on community. They
are typically used to define the difference between natural communities that occur in rural areas
(gemeinschaft) and the contrived and malfunctioning communities in urban or suburban areas
(gesellschaft). Gemeinschaft is characterized as representing a natural order of people who share
the same traditions, customs, norms, and whose personal relationships are based on trust and
reciprocity (Figueira-McDonough, 2001, p. 2). Gesellschaft are places and groups of people
who are strangers that do no share a common past and relate to each other in impersonal,
transitory, and artificial fashions (Figueira-McDonough, 2001, p. 3). The clear preference is for
the natural, meaning small and rural, community (Pavey et al. 2007, pp. 90-91). However, some
contend that this is an ideal not based on fact, often ignoring the negative features of rural
communities (Figueira-McDonough, 2001, p. 5). Some even lament that there is no longer a
construct such as community that provides security and identity in the modern, cosmopolitan
world (Bauman, 2001).
This ideal preference for gemeinschaft rural communities is further rebutted when the idea of
larger communities outside of the village are envisioned. Communities are not restricted by size
since “increased population size and density do not significantly weaken local community
sentiments (Kasarda & Janowitz, 1974, p. 338, as cited in McMillan & George, 1986, p. 14).”
This is done through the formation of networks. Personal communities fortify social integration
and create networks and grander communities that are not bounded by a small, restricted locality
(Figueira-McDonough, 2001, p. 6). Personal communities, or networks, can help territorial
communities if members of personal communities have a strong attachment to their locality
(Figueira-McDonough, 2001, p. 25).
Josefina Figueira-McDonough (2001) describes four types of communities: 1) stepping
stone, 2) established, 3) disorganized, and 4) parochial communities (pp. 36-37). Stepping stone
communities are made up of a non-poor, mobile population and are likely to have weak local
networks and low attachment, but strong external networks (Figueira-McDonough, 2001, p. 36).
An example of a stepping stone community would be a college campus or a temporary expatriate
community. Established communities are non-poor and stable and can support strong local and
external networks (Figueira-McDonough, 2001, p. 36). An example of an established
community would be Polish town (Hamtramck) in Detroit. Disorganized communities are poor
and mobile and have difficulty forming any type of network; instead these communities rely on
external agencies for support (Figueira-McDonough, 2001, p. 37). An example of a disorganized
community would be an urban minority community in the United States. Parochial communities
are poor and stable with few external networks, but strong local networks (Figueira-McDonough,
2001, p. 37). A distant rural community may be considered a parochial community.
The definition of community offered by the National Democratic Institute (NDI) begins to
describe the combination of the two typologies of community. NDI defines community as the
“state of being shared or held in common…can apply to spatial communities (a body of people
living and/or working in the same area), which can come together at any spatial scale for the
local to the global (National Democratic Institute [NDI], 2009, p. 11).” This work seeks to
combine the two community typologies into one that can provide a useable framework for
community studies and development.
A community is more than just an administrative unit or a group of people with similar
interests and attributes. In order to function in our daily activities we rely upon one another to
complement and supplement our activities to reach our full potential. People rely on one another
to provide the goods and services that they cannot provide for themselves. Farmers grow food
and sell them to the merchants, who, in turn, sell the goods to others in the area. Children are
sent to schools to learn from teachers, sometimes being taken there by various transportation
operators from the community. Local government officials prepare the plans and policies that
affect the service and infrastructure that people use to facilitate their daily activities. All of these
activities happen in a particular place, in the community, and the recognition of this
interdependence is crucial to balanced progress. The cases of rural revitalization from Japan
(Chapter Five) and Pagudpud (Chapter Seven) demonstrate that the community is an appropriate
unit for analysis.
3. Social Capital
Social capital is contemporarily seen as the ‘missing link’ of development (Uslaner and
Dekker, 2001, p. 176). Along with the shift toward more qualitative features of development, the
concept of social capital has emerged as an important theoretical contribution in development
studies (Gittell & Vidal, 1998; Putnam, 2000). Social capital is the currency by which all
community activities are exchanged. By seeking an understanding of social capital a broader
concept of community relationships, based on humanistic terms, can be explored.
The inclusion of social capital into consideration for development projects and other
dimensions of governance stems from the realization that past projects and policies failed to
recognize social aspects as key factors for sustainable development (Aguirre 1998, p. 189). This
is due to embeddedness. Embeddedness is the argument that behavior and institutions are
constrained by social relations. To consider them independent of social factors will lead to vast
misunderstandings (Granovetter, 2002, p. 69). Actors do not behave outside of a social context,
nor do they act in a strict and consistent manner according to the social categories that they
occupy (Granovetter, 2002, p. 74). This means that there is significance to understanding social
capital and its functions, but it does not necessarily mean that there is a predictive value in it.
Furthermore, the embeddedness argument stresses the role of networks in generating trust and
discouraging malfeasance, due to the preference for dealing with individuals of known reputation
rather than relying solely on generalized morality or institutional arrangements to guard against
misdealing (Granovetter, 2002, p. 76).
Due to the fact that social capital is an important factor in gaining access to other forms of
capital, as well as being a prominent factor in the lives of all people since the social networks
that people form with one another have a multitude of effects (Felp & Volker, 2004, p. 3), it will
be the main focus of this section. However, first, an understanding of capital is necessary
because social capital derives from the economic discussion on the notions of capital.
Capital is the accumulated labor or capability that enables, when appropriated, that entity to
social energy in the form of goods or services (e.g. benefits) (Bourdieu, 2002, p. 280; see also
Putnam, 1993, p. 169). Theoretical discussions on capital have moved away from class, which
was the base in Marxist discussions of capital, and more toward actors (including individuals,
organizations, and communities), and can be identified as neo-capital theories (Lin, 200, p. 786).
Generally, capital theories state that investment and mobilization of capital will enhance
desirable outcomes for both individuals and communities (Lin, 200, p. 786). The inequality in
different types of capital possessed by different actors contributes to social inequality leading to
discrepancies in socioeconomics and quality of life (Lin, 2000, p. 786).
The structures of capital distribution represent the structure of the social world, the set of
constraints that determine the chances of success (Bourdieu, 2002, p. 280). There are three basic
forms of capital:
1. Economic capital – directly convertible into money and may be institutionalized by
property rights, can typically be used to obtain all other forms of capital;
2. Cultural capital – on certain conditions convertible to economic capital and may be
institutionalized in the form of educational qualifications, has three forms: embodied by
long lasting dispositions of the mind and body, objectified in the form of cultural goods
(pictures, books, dictionaries, instruments, machines), or institutionalized by education;
3. Social capital – made up of social obligations or connections, on certain conditions
convertible into economic capital and may be institutionalized in the form of a title
(Bourdieu, 2002, pp. 281, 282, 287).
The various forms of capital help describe the ways in which people conduct their lives, both
in economic and non-economic terms. Economic capital is the most straightforward form of
capital, while cultural capital, though highly related to economic capital, is related to objects and
quality of life. Social capital is based on the relationships between people and their affect on
access to economic and cultural capital. This is because social relations are responsible for trust
in economic interactions (Granovetter, 2002, p. 76). Social capital definitely has an effect on
socioeconomic attainment and economic growth (Lin, 2000, p. 786; Putnam, 1993, p. 176), and
can matter for production (Paxton, 1999, p. 101) as a factor or detriment of physical or human
capital, as well as a transaction cost or monitoring cost (Paldam & Svendsen, 2004, p. 249).
Social capital is related to theories of goodwill in management, credibility in policy-making,
cooperative solutions in game theory, and group norms in psychology and anthropology (Paldam
& Svendsen, 2004, p. 233). It is also a general concept that cannot be described with just one
variable (Paxton, 1999, p. 90). Social capital can be broadly defined as the trust and cooperation
found in a community (Gittel & Vidal 1998; Putnam, 1993, p. 167) and incorporates the concepts
of social cohesion, sense of community, and social participation (Boyd, Hayes, Wilson, &
Bearsly-Smith, 2006, p. 189). Gittell and Vidal (1998) assert that social capital is comprised of
the key elements of trust, cooperation, long-term relationships, sociocultural milieu, institutional
infrastructure, social support, shared vision, networking, economic incentives to mutual interests,
strength in weak ties, and identification and eradication of structural holes (p. 16). Putnam
(1993) places emphasis on trust in social capital (p. 170).
Pierre Bourdieu (2002), the French sociologist who pioneered the term social capital, defines
social capital as “the aggregate of the actual or potential resources which are linked to possession
of a durable network of more or less institutionalized relationships of mutual acquaintance and
recognition - or in other words, to membership in a group - which provides each of its members
with the backing of the collectively-owned capital, a credential which entitles them to credit, in
the various senses of the word (p. 286).” A way to further conceptualize this would be a sort of
localized social karma.
Felp and Volker (2004) put it more simply: “social capital is the social networks and the
resources of the others an actor can call upon can be considered as a social resource, as another
means for that actor to improve or defend their conditions of living (p. 5).” Nan Lin (2000)
defines social capital as the investment and use of embedded resources in social relations for
expected terms (p. 786). He goes on to conceptualize social capital as the quantity and/or quality