They require different kinds of policies but in the end they have to be put together into a coherent whole. If crime pays, violence will occur. If belief systems collapse as they did in Eastern Europe organizations become dysfunctional but what was particularly interesting for me in this discussion was the need for more research and better understanding of how public policy can aggregate choices effectively to achieve poverty reduction. Starting again back from the question of beliefs and values, I think there are a lot of tensions here, a lot of paradoxes which need to be explained. On the one hand, we talk about universal values and yet we recognize the importance of the diversity of cultures.
Social capital is very important.
The dark side of social capital which was highlighted by Bowles and others is that it can lead to exclusion. I mean, the mafia nurtures social capital among its members but this does not contribute to welfare. We need to balance the common good versus individual freedoms and social cohesion versus rapid change. The so-called Picciotto triangle illustrates these kind of issues. It is a tool which I think is quite applicable to what we are discussing today.