1. The Challenge of Building Social Capital for a Sustainable and Desirable Future Elinor Ostrom Indiana University

2. Immense and Growing Interest in Social Capital Let’s look at the citations in the Web of Science on Social Capital

3. YearNumber of Citations 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2 6 15 14 28 38 61 112 129 176 210 257 296 324 358 *Includes Science Citation, Social Science Citation, and Humanities Indexes. For an earlier version, see Ostrom and Ahn (2003: xii). Thanks to Andy Revelle for doing this search. Web of Science

4. Why? Link of Social Capital to Collective Action and Development Collective action needed whenever More than one actor needed to generate outcomes Exclusion of beneficiaries costly Public goods – peace, knowledge, prosperity Avoiding public bads – war, destruction of natural resources – e.g., forests Teams of all kinds (may produce goods OR bads) Scale varies from a single family, a gang, a small community to the global “community” All development efforts involved some form of collective action

5. Collective Action Difficult to Achieve May require input from many – costly Since some benefits may be achieved even if one is a hold out The temptation to be a free rider is always present Not participating or shirking threaten success Too many hold outs, however, and benefits not achieved Trust that others will reciprocate contributions is essential

6. What are Key Questions re SC What is social capital? How is it similar or different re other forms of human-made capital—i.e., physical and human capital? How do we build this form of capital? How do we measure the outcomes of social capital? These are the questions that all of us here are addressing in one way or another

7. Human-Made Capital All forms created by spending time and effort now to increase productivity later Transformation activities Transaction activities All forms of capital can also be created as a by-product of other activities Engage in a team sport – learn a lot about others on the team Engage in making one type of physical capital – learn transferable skills

8. Physical and Human Capital Physical: Stock of material resources Human: Stock of acquired individual knowledge and skills Both built by transformation and transaction activities Produce a flow of future returns (which benefit some and may harm others) Create new opportunities Constrain events

9. Social Capital Stock of shared understandings, norms, rules, and expectations that groups bring to a recurrent activity (Coleman, 1988) Built by transformation and transaction activities Produces a flow of future returns (which benefit some and may harm others) Creates new opportunities Constrains events

10. Forms of Social Capital Networks of relationships both within and across organizations (teams, gangs, cartels) Institutions – rules-in-use Trustworthiness relationships built over time

11. Institutions are: Rules-in-use that structure organizations and activities Crucial to building trust Forms of social capital themselves Represent investment of time and effort to increase productivity and reduce social costs Can generate positive or negative consequences Take a long time to build up Can be destroyed rapidly

12. Forms of Social Capital, Trust, and their Linkage to Achieving Collective Action Contextual Variables Trustworthiness Collective Action Trust Networks Institutions Source: Ostrom and Ahn (2003: xvii).

13. Forms of Social Capital and Collective Action: A Simple Causal Model

14. The Need to Build Social Capital Not the foundation of contemporary development practice Much development practice based on panaceas Focused largely on building infrastructure Building irrigation systems without recognizing the importance of building social capital Lets look at the performance of locally constructed physical AND social capital -- compared to externally constructed physical capital

15. Nepali Landscapes Look So Peaceful

16. Behind the Beauty are CPR Dilemmas: Who Gets the Water?

17. Farmers Construct and Maintain Canals and Roads in Tough Terrain: Tough Work!

18. Nepal Irrigation Institutions and Systems Database After years of fieldwork with colleagues in Nepal, we now have data on outcomes: Overall physical condition of canals, diversions works, and weirs Technical efficiency – getting water to tail end of system Economic efficiency – relationship of benefits to costs of maintenance For 230 systems

20. FMIS – High Levels of SC/ Low Levels of PC and HC Large variety of rules-in-use on FMIS Uniform formal rules on AMIS Frequently not enforced or even known by farmers FMIS rules are tailored to local cultural and biophysical setting Farmers themselves heavily involved in planning, construction, maintenance, and monitoring

21. Can Social Capital be Destroyed by Public Policies? Yes – Through counterproductive international aid (Samaritan’s Dilemma) Similar to many government agencies Show a need for major expenditures Spend the funds allocated quickly Contract to get the work done by national firms Rotate frequently to different projects & countries

22. Other Ways of Destroying Social Capital Through massive consolidation of local governments in US and Western Europe Increasing the size of schools Putting dissimilar ecologies in same local government – Self organized institutions using different rules in slightly different ecological systems (e.g. Maine lobster fisheries_ Yes – through declaring forests and other common property to be owned primarily by national government – India, Nepal, Africa

23. How Can Social Capital be Enhanced by Governments? Creation and support of multiple forms of conflict adjudication through fair, rapid, and low-cost mechanisms – including arbitration Support University—Community—Business networks, incubators, student internships, service learning Encourage joint scientific activities Support accurate knowledge acquisition about local risks, environmental quality, while allowing considerable variety of local solutions

24. And, What Can We Do? Develop a better theory of collective action More complex theory of human behavior Multiple types of players Importance of information and information-processing capabilities Role of institutions in enhancing (or detracting from) intrinsic motivations and trust Empirical research testing theory In the experimental lab In large-scale field research In small-scale qualitative research Triangulate our results

25. Studying and Building Social Capital is Challenging Fun Economically worthwhile So, there is much for all of us to do!