Abstract
Several authors (Coleman (1990) Foundations of social theory. Harvard University Press, Cambridge MA; Putnam RD (1993); Fukuyama (1995) Trust: the social virtues and the creation of prosperity. Free Press, New York) highlight that social capital could affect the economic performance of a country through a number of channels. Empirical evidence backs these theories, finding a positive relationship between growth, efficiency and the level of trust. Nonetheless, previous analyses focus on a single country or develop a cross-country dimension: we contribute to this literature by investigating the role of social capital at a sub national level. We focus on a country characterized by large disparities, Brazil, and we investigate the relationship between economic growth and social capital over the period 2000–2003, at the municipal level. We derive a number of social capital indicators from official data, and analyse them by means of factor component analysis. Overall, we find evidence of a positive relationship between social capital and income per capita growth.
“The advantage to mankind of being able to trust one another, penetrates into every crevice and cranny of human life: the economical is perhaps the smallest part of it, yet even this is incalculable”
(J.S. Mill (1848/2004))
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Notes
- 1.
Municipalities are the smallest administrative units in the Brazilian political system. Each one is governed by a mayor and has a chamber of representatives.
- 2.
In particular, civic attitude was inferred from responses to questions on whether the following behaviours “could always be justified, never be justified or something in between: claiming government benefits which you are not entitled to; avoiding a fare on public transport; cheating on taxes if you have the chance; keeping money that you have found; failing to report damage you have done accidentally to a parked vehicle.”
Respondents chose a number from 1 (never justifiable) to 10 (always justifiable). Authors reversed the scales, so that larger values indicated greater cooperation, and summed values over the five items to create CIVIC.
- 3.
Data for private investment come from Haddad et al. (2002) and refer to 1996, while data regarding adult literacy rate come from IBGE and refer to 2000.
- 4.
As these variables lack a time dimension, we are forced to implement a cross section regression.
- 5.
With the exception of the correlation between the measure of social division and the indicator of religiousness, which are not significantly correlated.
- 6.
Performing the same type of regression over shorter time periods always produces a positive and significant coefficient for the initial level of GDP per capita. This coefficient is not significant only when considering 1999 as a starting year.
- 7.
Note that we obtain the same result when considering population density instead of population. However, given the strong correlation between population density and population, we were unable to include both variables in the regression.
- 8.
We are aware of possible endogeneity issues related with the public expenditure variables, therefore we chose to consider the average value of public expenditure in the ten previous years.
- 9.
We thank our discussant at II DYNREG Workshop for highlighting this point.
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Acknowledgments
We would like to thank participants at II DYNREG Workshop (9–10 March 2007, Athens) and ISLA seminar for their helpful comments and suggestions. Matteo Grazzi contributed to this paper before joining the Inter-American Development Bank. The views expressed here do not represent necessarily those of the Inter-American Development Bank but those solely of the author. Usual disclaimers apply.
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Appendix
Appendix
Table A.1 Data summary
Variable | Description | Year | Source | Mean | Std. deviation |
|---|---|---|---|---|---|
Δ GDP pc (2000–2003) | Log of average GDP per capita growth | 2000–2003 | IBGE | 0.38 | 0.04 |
GDP pc 2000 | Log of GDP per capita level in 2000 | 2000 | IBGE | 8.07 | 0.01 |
Human capital | Literacy rate (individuals over 10) | 2000 | IBGE | 80.71 | 0.16 |
Physical capital | Log of state private investment | 1996 | Haddad et al. (2002) | 2.46 | 0.02 |
Distance from Brasilia | Log of distance from Brasilia (Km) | 1998 | IPEA | 6.87 | 0.07 |
State capital | Dummy variable: 1 if the municipality is a state capital; 0 otherwise. | 1998 | IPEA | 0.05 | 0.01 |
Education expenditure | Log of average municipal expenditure per capita in education (R$) | 1991–1999 | IPEA | 3.95 | 0.77 |
Soc. ass. expenditure | Log of average municipal expenditure in social assistance and social security (R$) | 1991–1999 | IPEA | 2.26 | 1.06 |
Political participation | Average electoral turn-out in local elections | 1994–1998 | IBGE | 0.79 | 0.08 |
Table A.2 Factors’ description
Factor | Variable description | Year | Source |
|---|---|---|---|
Social Cohesion | Number of cohabiting individuals over total population | 2000 | IBGE |
Number of married individuals over total population | 2000 | IBGE | |
Number of married cohabiting individuals over total population | 2000 | IBGE | |
Number of divorced cohabiting individuals over total population | 2000 | IBGE | |
Number of widow cohabiting individuals over total population | 2000 | IBGE | |
Number of single cohabiting individuals over total population | 2000 | IBGE | |
Social Division | Number of separated individuals over total population | 2000 | IBGE |
Number of separated cohabiting individuals over total population | 2000 | IBGE | |
Number of separated not cohabiting individuals over total population | 2000 | IBGE | |
Number of divorced individuals over total population | 2000 | IBGE | |
Number of divorced cohabiting individuals over total population | 2000 | IBGE | |
Number of divorced not cohabiting individuals over total population | 2000 | IBGE | |
No religion | Number of civil and church weddings over total population | 2000 | IBGE |
Number of civil weddings over total population | 2000 | IBGE | |
Number of church weddings over total population | 2000 | IBGE | |
Number of cohabiting individuals over total population | 2000 | IBGE |
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Corazzini, L., Grazzi, M., Nicolini, M. (2011). Social Capital and Growth in Brazilian Municipalities. In: Nijkamp, P., Siedschlag, I. (eds) Innovation, Growth and Competitiveness. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-14965-8_9
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