Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions. Mounting evidence shows that social cohesion is critical for societies to prosper economically and develop sustainably.

Social capital is not just the sum of the institutions underpinning a society—it is the glue that holds them together. A narrow view of social capital regards it as a set of horizontal associations among people, consisting of social networks and associated norms that have an effect on community productivity and well-being. Social networks can increase productivity by reducing the costs of doing business. Social capital facilitates coordination and cooperation. Communities, groups, or networks that are isolated, parochial, or working at cross-purposes to society’s collective interests (such as drug cartels, corruption, rackets, or hybrid forms of all them) can hinder economic and social development.

The broadest view of social capital includes the social and political environment that shapes social structure and enables norms to develop. It includes formal institutional relationships and structures, such as government, the political regime, the rule of law, the court system, and civil and political liberties. It recognizes that the capacity of various social groups to act in their interest depends crucially on the support (or lack thereof) they receive from the state as well as the private sector. Similarly, the state depends on social stability and widespread popular support. In short, economic and social development thrives when representatives of the state, the corporate sector, and civil society create forums in and through which they can identify and pursue common goals.