Theory to Practice: Policy Recommendations for Fostering Economic Development through Social Capital

• DOI: http://doi.org/10.1111/puar.12925
• Date: 01 July 2018
• Published date: 01 July 2018

Theory to Practice: Policy Recommendations for Fostering Economic Development through Social Capital 567

Public Administration Review,

Vol. 78, Iss. 4, pp. 567–578. © 2018 by

The American Society for Public Administration.

DOI: 10.1111/puar.12925.

Research Article

This manuscript was originally submitted

and accepted as a Theory to Practice

article. The feature editor, Hal G. Rainey,

is gratefully acknowledged for his work

in soliciting and developing this content.

Effective with Volume 78, the Theory to

Practice feature has been discontinued.

Barry M. Rubin is professor emeritus

in the School of Public and Environmental

Affairs at Indiana University Bloomington.

His research focuses on urban and regional

economic development and impact analysis,

state-level energy and climate-change

policy analysis, econometric modeling

and simulation of complex systems, public

sector and business analytics, and strategic

planning and management.

E-mail: rubin@indiana.edu

Trent A. Engbers is a former Peace

Corps volunteer, experienced college

educator, and nonprofit consultant living

in Evansville, Indiana. He is assistant

professor of political science and public

administration at the University of Southern

Indiana. His research on leadership,

economic development, and civic

engagement has been published widely.

He lives in Evansville with his wife Kimberly

and their four children. His TEDx Talk on

social capital and economic development

is available at https://www.youtube.com/

watch?v=2vmc2sd8DI4.

E-mail: taengbers@usi.edu

Theory to Practice: Policy Recommendations for Fostering

Economic Development through Social Capital

Trent A. Engbers

University of Southern Indiana

Barry M. Rubin

Indiana University

Abstract: Proponents of social capital theory have long argued not only that it is in the best interest of civic life

to build social capital but also that social capital is vital for the economic health of communities. This has been

confirmed by recent research showing that social capital, especially in its bridging form, is positively associated with job

creation at the metropolitan statistical area level. At the same time, social capital is often viewed as something either

inherent or absent within a community. This article takes on that assumption by presenting a policy-based approach to

developing social capital. It provides two theoretical explanations for how social capital affects economic development

and identifies four lessons for economic development practitioners to use to enhance social capital. These research-based

recommendations for economic development practitioners and policy makers seek to improve the social capital and,

consequently, the economic development of their community.

Evidence for Practice

• Practitioners should begin economic development activities by assessing their community’s current stock of

social capital using one of many techniques appropriate for their planned intervention.

• Community stakeholders can be intentional about building relationships for economic development.

• Practitioners need to expand the range and type of organizations involved in economic development planning.

• Information flow can be increased and barriers reduced through social capital interventions.

Proponents of social capital theory have long

argued not only that it is in the best interest

of civic life to build social capital but also

that social capital is vital for the economic health

of communities. This has been confirmed by recent

research showing that social capital, especially in

its bridging form, is positively associated with job

creation at the metropolitan statistical area (MSA)

level (Engbers, Rubin, and Aubuchon 2016). At the

same time, social capital is often viewed as something

either inherent or absent within a community

(Fukuyama 1995). This article takes on that

assumption by presenting a policy-based approach

to developing social capital. It provides a series of

research-based recommendations for economic

development practitioners and policy makers

to improve the social capital and, consequently,

the economic development of their community.

Additionally, it provides a set of policy analysis tools

to use in understanding community social capital.

The Current State of Social Capital and

Economic Development Research

One of the challenges of exploring the relationship

between social capital and economic development

is that social capital can be thought of both as a

theory (Lin 2002) and as a concept (Ostrom 2000).1

This exploration of social capital looks at it as a

concept and its application in fostering economic

development. Social capital is like other forms of

capital (e.g., human, physical, natural) in that it is a

resource for development, but it differs from other

forms of capital in that (1) it diminishes with disuse

rather than use and (2) it is unobservable except by

proxy and difficult to measure (Ostrom 2000).

Thus, one of the most challenging parts of using social

capital to foster economic development is reaching

agreement on the meaning of social capital. A number

of dominant definitions have been advanced:

• Social capital as “the information, trust, and norms

of reciprocity inherent in one’s social networks”

(Woolcock 1998, 153)

• Social capital as the “connections among

individuals’ social networks and the norms of

reciprocity and trustworthiness that arise from

them” (Putnam 2000, 19)

• Social capital as the interpersonal resources

individuals can access through networks of both

strong and weak social relationships (Beaudoin

2009; Steffensmeier and Ulmer 2006)