Using the lens of social capital - especially bridging or cross-cutting ties that cut across social groups and between social groups and government - provides new insights into policy design.
Solidarity within social groups creates ties (bonding social capital) that bring people and resources together. In unequal societies, ties that cut across groups (bridging social capital) are essential for social cohesion and for poverty reduction.
The nature of interaction between state and society is characterized as comple-mentarity and substitution. When states are functional, the informal and formal work well together - for example, government support for community-based development. When states become dysfunctional, the informal institutions become a substitute and are reduced to serving a defensive or survival function.
To move toward economic and social well-being, states must support inclusive development. Investments in the organizational capacity of the poor are critical. Interventions are also required to foster bridging ties across social groups - ethnic, religious, caste, or racial groups. Such interventions can stem from the state, private sector, or civil society and include:
This paper - a product of the Poverty Division, Poverty Reduction and Economic Management Network - is part of a larger effort in the network to understand the role of social capital. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Ben Jones, room MC3-782, telephone 202-473-9475, fax 202-522-3283, Internet address bjones1@worldbank.org. The author may be contacted at dnarayan@worldbank.org. (52 pages)
The full report is available in PDF format.