Presentation on theme: "Association for Studies in Public Economics"— Presentation transcript:
1 Association for Studies in Public Economics 1Association for Studies in Public EconomicsANTI-MODERN AND MODERN EFFECTS OF SOCIAL CAPITALProfessor RICHARD ROSE FBADirector, Centre for the Study of Public PolicyU. of Strathclyde, GlasgowGRADUATE SCHOOL OF MANAGEMENTST. PETERSBURG UNIVERSITY11 November 2011
2 2MODERN AND ANTI-MODERN ACTIVITIES COMPAREDModernAnti-modernRule of lawYes, bureaucraticArbitrary, politicalOpennessTransparentOpaqueSignalsPrices, lawsFalse accounts, bribes, personal contactsCause and effectPredictableUncertainOutputEfficientInefficient
3 3SOCIAL CAPITAL DEFINEDNetworks that produce goods and services in a society.♦Networks are relational (James Coleman, Granovetter)♦Networks can be informal, personal between individuals♦Networks can be formal, organisational, bureaucratic♦Can combine informal links within and between formal organisations
4 4SOCIAL CAPITAL IS NOT♦Attitudes of trust. Trust is a by product of interaction in social networks. So is distrust. Contra Putnam, interpersonal trust does not readily spill over into trust in formal organizations or political institutions.♦Formal organisations. Significant--but only as one partner in a networke.g. Between individual and government agencye.g. Between public and private organisations providing financial services♦BUT social capital networks are based on expectations and reputations of how others in a network will react
5 DIFFERENT USES OF SOCIAL CAPITAL 5DIFFERENT USES OF SOCIAL CAPITAL♦Exchanges can involve cash payments (bribe) or non-pecuniary forms of blat.♦Outputs produced are observable, e.g. health care, University admission♦National income accounts can include outputs from modern social capitalnetworks but exclude outputs form anti-modern networks.
6 DIFFERENT FORMS AND USES OF SOCIAL CAPITAL 6DIFFERENT FORMS AND USES OF SOCIAL CAPITALPositiveMODERN ORGANIZATIONS WORKPublic sector allocates by lawPolice will help protect house from burglary43%Social security office will pay entitlement if you claim35%Market allocates to paying customersBuy a flat if it is needed30%Can borrow a week's wage from bank16%INFORMAL ALTERNATIVESNon‑monetized productionGrowing food81%Can borrow a week's wage from a friend66%PERSONALIZEBeg or cajole officials controlling allocationKeep demanding action at social security office to get paid32%Beg officials to admit person to hospital22%ANTI‑MODERNRe‑allocate in contravention of the rulesUse connections to get a subsidized flat24%Pay cash toa doctor on the side23%PASSIVE, SOCIALLY EXCLUDEDNothing I can do to:Get into hospital quicklyGets pension paid on time (pensioners only)
7 7NETWORKING STRATEGIES IN DEALING WITH PUBLIC SERVICESQ. What would you do if you had difficulty in getting a public service?Bureaucratic: Write a letter of complaint, push officials to actMarket: Buy in the private sectorAnti-modern: Offer a bribe, use connections, make up a story
8 8MODERN AND ANTI-MODERN WAYS TO GET HEALTH CAREGetting treatment for a painful disease when hospital says one must wait for monthsStrategyAnti-modernconnectionsPersonalMarketPassiveRussia57131119Ukraine39123415Czech Republic243114Sources: Russia Social Capital Survey. New Europe Barometer Survey V.
9 9SOCIAL CAPITAL AFFECTS INDIVIDUALS:♦COPING with costs of system failure, transformatione.g. growing food at dacha♦SUPPLEMENT to goods and services obtained in official economy.♦COST: Buying nominally free servicesEffort, anxiety from storming, unpredictability of bureaucratic services♦DETERIORATION in human capital from inefficiencies in health, education
10 10MACRO EFFECTS OF ANTI-MODERN SOCIAL CAPITAL♦INEFFICIENCY Raises transaction costs♦ENCOURAGES PROFITS FROM TRADING (especially off the books)♦DISCOURAGES FIXED DOMESTIC INVESTMENT
11 POTENTIAL RISKS OF ANTI-MODERN SOCIAL CAPITAL 11POTENTIAL RISKS OF ANTI-MODERN SOCIAL CAPITAL♦EQUILIBRIUM TRAP. Persistence of current conditions.Loss of potential output through inefficiency,under-investment.Reduction in potential human capital♦NEGATIVE DISEQUILIBRIA.Oil prices and revenue fall below equilibrium point.Social and political protests against unfairness,inefficiencies, corruption
12 12By Richard RoseUnderstanding Post-Communist Transformation: A Bottom Up Approach. London: Routledge, paperback, 2009."Social Shocks, Social Confidence and Health". In Judyth Twigg and Kate Schecter, eds., Social Capital and Social Cohesion in Post-Soviet Russia. Armonk, NY: M.E. Sharpe, 2003,"Uses of Social Capital in Russia: Modern, Pre-Modern, and Anti-Modern", Post-Soviet Affairs, 16,1, 2000,"How Much Does Social Capital Add to Individual Health? A Survey Study of Russians", Social Science and Medicine, 51, 9, 2000,"Getting Things Done in an Anti-Modern Society: Social Capital Networks in Russia". In Partha Dasgupta and Ismail Serageldin, eds., Social Capital: A Multifaceted Perspective. Washington, DC: The World Bank, 1999,plusJames S. Coleman Foundations of Social Theory. Cambridge, MA: Harvard University Press.