Many would say that this is fair enough. The research shows attempts by economists to tackle social capital analytically. They aim to give greater precision to the initial finding that, at the household and firm level, more social capital leads to greater welfare and better performance. What distinguishes them is their precise theoretical formulations in a subject area that can lend itself to ambiguity, their innovative approach to measurement, and the use of econometric tools on unusual data sets. Economists believe that this kind of rigorous analysis can underpin sound policies.
Social capital is created when people associate together for a range of different purposes.
However, to calculate the benefits of social capital with any accuracy, we need to be able to distinguish what is to count as social capital and what is not. On this, opinions still differ. Haddad and Maluccio think that it should be possible to separate out benefits that accrue to individuals from simply being a member of a group and from actively influencing the group s behaviour, from other indirect benefits at group and community level. They aim to measure all these different types of return separately, while defining only the indirect benefits as the return to social capital. This corresponds to the economist s description of social capital as a positive externality , meaning a benefit that arises over and above the direct benefits that the group activity was devised to produce.