Social Capital and Politics

Outline Political theories of social entrepreneurship Social capital

Capacity for collective action Community Vitality Revitalization Community organizing Developing Organizational and Leadership Skills Capacity for collective action Collective efficacy Social capital Building Social Capital Social cohesion Social Interactions Atomistic Ref.: RAND

Social Enterprises as Mediating Structures Protect individuals from alienation before Leviathan by translating social problems into personal terms (Berger and Neuhaus 1977) Enhance state’s legitimacy by connecting public problems to private means Roman Catholic “subsidiarity”: mediating the relationship between people and governments ata level that favors the individual Ref.: Frumkin (ch 2) 2002

Nonprofit Links with the Political Process Least political 1. Social capital building 2. Civic engagement 3. Grassroots organizing 4. Advocacy 5. Lobbying 6. Direct electoral activity Most political Ref.: Frumkin (ch 2) 2002

Political Theories of social Enterprise Nonprofits counteract the coercive power of the state Nonprofits are a laboratory for institutions that governments later adopt Nonprofits provide “space” between individuals and states (Locke) Voluntary associations are a force to fragment the proletariat (C. Wright Mills) Ref.: Frumkin (ch 2) 2002

Tocqueville’s Model of Voluntary Associations Civic association Political association Equality Democracy Ref.: Frumkin (ch 2) 2002

Links Between Government and Social Enterprise Moral suasion (Reagan) Promotion of national service (GHW Bush) Stipended volunteering (Clinton) Faith-based initiatives (GW Bush) Ref.: Frumkin (ch 2) 2002

Public subsidies versus private charity Let’s see what happens when we control for income, education, religion, age, gender, marital status, race, and political views. If two people are identical in all these ways, except that one feels the government should redistribute income more while the second person disagrees, the second person will be ten percentage points more likely to make a contribution to charity. He or she will give $263 more to charity each year, and will give $97 more to explicitly secular causes. In other words, people in favor of forced income redistribution are privately less charitable than those who oppose it, regardless of how much money they earn.

Different types of giving

Volunteering

It’s not just about money If the whole population gave blood like opponents of social spending do, the blood supply would increase by more than a quarter. But if everyone in the population gave like government aid advocates, the supply would drop by about 30 percent. The charity differences between proponents and opponents of government social spending lead to some jaw-dropping ironies. For instance, people who stated in 2002 that they thought the government was “spending too little money on welfare” were less likely than those saying the government is “spending too much money on welfare” to give food or money to a homeless person.

But it’s not politics per se

Some international evidence These volunteering differences are not attributable to any characteristics such as the average level of education or income. On the contrary, if we look at two people who are identical in age, sex, marital status, education, and real income—but one is European and the other American—the probability is far lower that the European will volunteer than the American. For example, an Austrian who “looks” just like an American will be 32 percentage points less likely to volunteer, a Spaniard will be 31 points less likely, and an Italian will be 29 points less likely. “The government has a responsibility to reduce income inequality,” only thirty-three percent of Americans agreed—far fewer than the level in any European nation. For example, in Spain, 77 percent favored greater redistribution; in Italy, 65 percent; and in Germany, 49 percent. The level of agreement with this statement correlated quite consistently with national charity rates. In Spain, 13 percent volunteered for non-religious charities; in Italy, it was 11 percent; and in Germany, 10 percent. A 10-percent increase in the percentage of the population that believes the government has a responsibility to reduce income inequality is associated with a six-percent decrease in the percentage volunteering for nonreligious causes, and a five-percent decrease in religious volunteering.

Outline Political theories of social entrepreneurship Social capital

Evidence of social capital is more tangible than social capital itself Robert Putnam Networks, norms, and social trust that facillitate coordination and cooperation for mutual benefits Francis Fukuyama An institutional informal norm that promotes cooperation between two or more individuals Synthesis The trust and social cohesiveness that promotes giving, volunteering, and participation in civil society Evidence of social capital is more tangible than social capital itself Ref.: Putnam, Fukuyama

Two Types of Ties Foster Social Capital Bonds Ties based on homogeneity of identity, demography and sense of purpose Can promote pursuit of narrow interests at the expense of the wider community Ties that span social differences (gender, ethnicity, SES) Build social trust that facilitates cooperation for mutual benefit Bridges (Putnam, 2000) Ref.: Granovetter (1974)

Benefits of Social Capital Less passive reliance on state Proactive citizen intervention into social issues Schools, crime, economic development Constructive association Money for charities Lower transaction costs with contracts and laws Fewer public resources needed to govern Amelioration of “excessive individualism” (Tocqueville 1835) Ref.: Putnam, Fukuyama

Costs of Social Capital In-group trust means out-group distrust Some social capital is socially destructive Less interchange of ideas between tight-knit groups Less moral suasion not to cheat out-group members Ref.: Fukuyama

The Putnam Hypothesis Social capital is falling in America Evidence: lower attendance by many traditional groups (e.g. PTA, bowling leagues, church-related groups) Reasons Societal cynicism Female labor force participation Population mobility and rootlessness Less marriage, more divorce, fewer kids Technology—individual consumption of leisure Ref.: Putnam

Not Everyone Subscribes to the Putnam Hypothesis Some groups increase membership, others lose—can’t just study the losers Group membership was abnormally high in the American 1950s—can’t measure from that point Ref.: Fukuyama

An Economic Theory of Social Capital Hypothesis: Social capital is a natural adaptation to suboptimal non-cooperative behavior Person 2 Person 1 cooperate compete 20 5 10

Prisoner’s Dilemma Implications Without trust, dominant (but suboptimal) strategy obtains With trust, optimal strategy becomes viable Social capital promotes cooperation through trust

2000 Social Capital CommunityBenchmark Survey 30,000 respondents 50 communities nationwide Supervised by Putnam and Harvard Undertaken by local Community Foundations Ref.: SCCBS

SCCBS Summary (1) Social trust Groups Political Secular gifts Religious gifts National Sample -0.05 3.68 2.87 $459 $889 Central New York 0.07 3.84 3.09 $506 $702 Chicago -0.09 3.76 2.93 $501 $825 Houston -0.23 3.29 2.56 $424 $900 Indiana 0.11 3.59 3.03 $456 $961 Rochester 0.15 3.57 $542 $718 Seattle 0.19 3.82 3.51 $783 $725 Ref.: SCCBS

SCCBS Summary (2) Ref.: SCCBS

Lessons for Policymakers and Managers Don’t assume that social capital is always good Example: Social capital can push giving and volunteering either up or down Individual and community-level social capital have different impacts Create proper conditions for social capital creation (e.g. property rights, public safety) How does the public sector impact social capital—does it encourage crowding out?