Participation, growth and social poverty: Social capital in a homogeneous society

Abstract

We introduce social capital accumulation into a neoclassical model, showing how it differs from physical and human capital accumulation. We take the view that social capital is crucial to the enjoyment of socially provided goods and that it is mainly accumulated by means of participation to social activities. Under-investment in social capital may lead a growing economy to fall into a social poverty trap. We argue that this risk is particularly relevant for advanced societies.