Social Capital and the Quality of Government: Evidence from the United States

35 Pages Posted: 20 Apr 2016

See all articles by Stephen Knack

Stephen Knack

World Bank - Development Research Group (DECRG)

Date Written: December 2000

Abstract

Governments perform better where there is more general trust and strong civic norms; they perform less well where citizens are less trusting and less civic-minded. Social capital - in the form of general trust and strong civic norms that call for cooperation when large-scale collective action is needed - can improve government performance in three ways:

It can broaden government accountability, making government responsive to citizens at large rather than to narrow interests.

It can facilitate agreement where political preferences are polarized.

It is associated with greater innovation when policymakers face new challenges.

Consistent with these arguments, Putnam (1993) has shown that regional governments in the more trusting, more civic-minded northern and central parts of Italy provide public services more effectively than do those in the less trusting, less civic-minded southern regions. Using cross-country data, La Porta and others (1997) and Knack and Keefer (1997) obtained findings consistent with Putnam's evidence. For samples of about 30 nations (represented in the World Value Surveys), they found that societies with greater trust tended to have governments that performed significantly better. The authors used survey measures of citizen confidence in government as well as subjective indicators of bureaucratic inefficiency.

Knack further analyzes links between social capital and government performance using data for the United States. In states with more social capital (as measured by an index of trust, volunteering, and census response), government performance is rated higher, based on ratings constructed by the Government Performance Project. This result is highly robust to including a variety of control variables, considering the possibility of influential outlying values, treating the performance ratings as ordinal rather than cardinal, and correcting for possible endogeneity.

This paper - a product of Regulation and Competition Policy, Development Research Group - is part of a larger effort in the group to identify the determinants of good governance and of institutions conducive to long-term economic development.

Suggested Citation

Knack, Stephen, Social Capital and the Quality of Government: Evidence from the United States (December 2000). Available at SSRN: https://ssrn.com/abstract=632574

Stephen Knack (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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