Social Capital: a Road Map of Theoretical Frameworks and Empirical Limitations

The general idea of social capital is that relationships matter. In this sense, trust, cooperation and reciprocity involved in these relationships can have a positive impact on the wealth of the society by reducing transaction costs, facilitating collective actions and lowering opportunistic behaviour. This work sheds light on the different theoretical and empirical problems that a scholar is likely to face in dealing with social capital research and analysis. We propose a critical road map of the social capital theories and applications for a general audience, non-users included, with particular attention to the works of political and social economists. We provide a critical debate on the different definitions and measures produced, the theoretical frameworks developed and the empirical techniques adopted so far in the analysis of the impact of social capital on socio-economic outcomes. We stress on the limitations of these techniques and we suggest some basic strategies to reduce the magnitude of these limitations