Social capital: The missing link in Ghana’s development

Abstract

Development practitioners in recent times have recognised that the general factors of production determine only partially the process of economic growth because they overlook the way in which economic actors interact and organise themselves to generate economic growth. In 2006, the World Bank publication cited developing countries as having the least amount of intangible capital compared to the developed nations. However, among the components of intangible capital, social capital has attracted considerable attention among social scientists in general and development economists in particular because there is growing evidence that social capital can have impacts on development outcomes. Using primarily desk studies, the paper examines current literature on social capital and how they provide some answers to the missing link in Ghana’s development. We conclude that while micro-level social capital is important and predominates in Ghana’s development, its success largely depends on macro-level social capital.This implies that an enabling socio-economic environment is very vital for all sectors to function properly. In essence, social capital – like natural, physical and human capital – has limited value if it is not combined with other forms of capital, because social capital makes the other types of capital and their productive combination more efficient.