Considering the Role of Social Capital for Economic Development Outcomes in U.S. Counties

Abstract

The authors examine major aspects of the connection between social capital and economic development in U.S. counties. They test the conclusions of Putnam, who saw associations as a force for positive development, and Olson, who concluded the opposite. The authors find that Putnam organizations have a negative effect on income, while Olson organizations have a positive effect by decreasing levels of income inequality. Drawing on the literature distinguishing between bridging versus bonding, the authors show that bridging capital has a positive effect on development by increasing per capita income, while bonding capital has a neutral effect on both per capita income and income inequality. Finally, religious variables are tested for their relationship with economic development. Overall, congregation density has a negative influence by increasing per capita income and income inequality, controlling for geographic type. Congregations with bridging characteristics have a mixed effect on development by decreasing income and decreasing inequality.