traded on the market, such as a sense of security, trust, transparency and fairness. These factors are hard to measure; however, it is known from previous studies that they have a substantial impact on economic growth when analyses are conducted using surrogate variables. It is intuitively understood that the aforementioned channel of economic power does not sufficiently explain economic growth and therefore, an examination of social capital, in addition to human capital, would help us better understand the mechanism of economic growth in the today's global competition.

The following are examples of specific ways in which ICT contributes to the accumulation of social capital in this channel:

● Local community bonds: Through the use of ICT, local community bonds will deepen and trust and stability in society will increase

Quality of systems and organizations: Through the use of ICT, transparency of organizations and systems will increase and ineffective economic activities will be eliminated.

## (2) Examination of the ‘channel of social power’

With respect to the relationship between bonds in the local community (social capital) and economic growth, various verification studies have been conducted $ ^{10} $ since Robert Putnam presented the concept of social capital in his work Making Democracy Work in 1993. The history of verification studies is rather short, but many studies report correlations with economic growth using the responses of different countries to the question “Can people be trusted?” in the World Values Survey $ ^{11} $ as surrogate variables. For example, there is a positive correlation between the growth rate of per-capital GDP--after controlling various factors that might have an impact on growth other than social capital and trust in the World Values Survey as a surrogate variable of social capital. Also, there are many studies on the relationship between governance and economic relations $ ^{12} $ . As a result, the World Bank operates a website called ‘Governance Matters’ $ ^{13} $ and annually formulates and discloses indicators regarding governance of countries worldwide. For example, the upper graph in figure 1-9 gives an example of the relationship between ‘(comprehensive) degree of governance’, which gives the simple mean values of six indicators developed by the World Bank, and the growth rate of per-capita GDP, and shows a positive correlation between the two.

Now the question is what kind of relationship is there between ICT and social capital. First of all, for local community bonds, Putnam (1993) contends that it is important for people to have direct contact with each other and that online networks without direct contact supplement networks based on face-to-face communication, and concludes that online networks in themselves are not important for creating bonds. He points out that one of the major reasons for the decline in these bonds in the United States is the effect of television $ ^{14} $ . On the other hand, there is a growing need for community activities that promote information sharing on the Internet and online donation. Thus one cannot deny the importance of the Internet for local community bonds with which one can establish and maintain human connections without restrictions of place or time and irrespective of the number of people involved. One study shows a positive relation between the use of the Internet and participation in volunteer groups or political activities. It is thus not easy to predict whether ICT will have positive or negative impact on local community bonds.

ICT is also believed to play an effective role in governance. It is intuitively understood that the spread of the Internet drastically increased information distribution and raised awareness of information disclosure and accountability, thus improving the transparency of politics, administration and corporations. Also, there is no doubt that one individual can easily send and receive information through the Internet, which provides great potential for improving the governance of an organization or a system.

Recently the so-called alpha bloggers have gained great influence on public opinion, together with the mass media. However, it is also necessary to bear in mind that there is a danger of people overreacting to opinions on the Internet, leading to radical action in the real world, as seen in Korea and China.

Let us now look at data relating to the relationship between ICT and social capital described above. Focusing on governance, the aforementioned ‘degree of governance was used as a surrogate variable and a positive relation with the Internet subscriber ratio was also found. A similar result was obtained when the