Social Capital and Economic Performance in the American States

Do areas with higher levels of social capital have stronger economies? Robert Putnam has advanced this proposition most recently in Bowling Alone, his magisterial study of civic engagement in the United States. Regrettably, he offers only anecdotal evidence to support his contention. Determining the empirical veracity of the economic implications of social capital is crucial to applying the concept to broader questions of economic policy and development. This article thus tests Putnam’s hypothesis by analyzing his social capital index measures against statelevel output data and measures of physical and human capital. The results show that social capital is not a significant factor compared to other drivers of economic performance, with the exception of a small but positive relationship with employment. The implication is that social capital is not a general prerequisite for prosperity, but may serve to reinforce a particular mode of communitarian economic development. Terrence Casey Assistant Professor of Political Science Dept. of Humanities and Social Sciences Rose-Hulman Institute of Technology Terre Haute, IN 47802 (812) 877-8281 [email protected] Kevin Christ Assistant Professor of Economics Dept. of Humanities and Social Sciences Rose-Hulman Institute of Technology Terre Haute, IN 47802 (812) 872-6226 [email protected] A previous version of this paper was presented at the 2002 American Political Science Association Conference, Boston, MA. The authors would like to thank Dale Bremmer for suggestions on earlier drafts.