Strong kinship ties encourage loans or grants for business ventures and provide inexpensive labor. However, dense family networks may also limit economic growth by imposing barriers to integration within external networks. High levels of internal trust may generate distrust of non-family members and institutions, preventing potentially productive relationships. Through its interactions with political, economic, cultural, religious and legal systems, the family not only increases the resources available to its members, it also contributes to the social capital available to promote public goods. A study of families transplanted to a rural area found that informal systems such as family, friends and neighbors, and semi-formal systems such as cooperatives and clubs were especially important sources of friendship, status, information and services.
External factors can dramatically impact the family's relationships within the community.
Such isolation deprives the community of mechanisms for collective action to address these problems. For more information on this subject, search our database for documents on Social Capital and Families. Click here to go to our search engine.