annashay 
In economics, ideas emerge, flourish, wither away and die, only to be reborn decades later with an improved version. The concept of social capital is not new, introduced as far back as the late 19th century by political economists Henry Sidgwick (1883) and John Bates Clark (1885). They initially referred to it as social organizations or collective works, resources and usage such as infrastructure and also human skills (i.e., human capital). In 1900, John Dewey used the term with a modified meaning attached to education and social interaction. This is very close to today’s understanding of the term.
It re-emerged in developed countries in the 1950s. The term social capital is now globally known, basically in the discipline of development studies, and has been liberally applied to a variety of disciplines such as economics, sociology, politics, health, education, and business. However, in the context of developing countries, it has been largely recognized that social capital plays a crucial role in enhancing a nation’s productivity and growth. The traditional inputs such as land, labor, and capital are impotent and unable to explain the differences in outcomes across different regions and countries. Hence, the role of social capital becomes a salient feature. It is believed that human capital and physical infrastructure need to be accompanied by “social capital” in order to avail the benefits of investment.
The most common definition of social capital is generally characterized by groups and networks. Initially, it is based on the ideology that institutions play a major role in sustaining the development process. The main concern in this regard is to identify why some countries do better than others in various areas and service provision. At this point, governance plays a major role, explaining why certain countries fail while others have performed exceptionally well. The roots of good governance can be found in the broader sense of social capital. It is now a well-established fact that governance is a crucial and necessary ingredient in the recipe of economic development, playing a vital role in the well-being of individuals and society. Such is the case for ideas about human capital and economic development. The foremost objective of development, as stressed by economic thought, is to benefit people. It is believed that societies with greater social capital practices are likely to have better governance, which helps in achieving better results in economic development. Social capital is now a very popular concept and recently an approved method for approaching the subject as well as analyzing the social forces at work.
Narayan (1999) refers to the term as equivalent to the “glue that holds groups and societies together, along with bonds of shared values, norms, and institutions.” This is very true as it emphasizes social relations. It also gives access to the use of all major resources possessed by the actors. Thus, social capital helps individuals in securing their benefits by using their network and membership in various groups in society.
Community Examples of Social Capital
It is observed that when a community works as a team, the success rate is higher. Many examples of communities working together can be witnessed:
= Asian Productivity Organisation (APO): Established in 1961 with the objective to increase productivity in the Asia Pacific region. It started a Basic Research Project to recognize the role of social capital in Asia, with the purpose of understanding the concept and its application.
= India and Bangladesh: Both countries are members of SAARC, more than just neighbors.
= An example from India reveals the growth statistics and restructuring of social capital in Dhesian Khana village. People who migrated to this village shared the same network group to provide personal information and relationships. This definitely makes a combined plan to achieve their welfare. Besides, it also helped in the restructuring of the macroeconomic environment and the recurrence of social capital.
= The second example is the micro-finance program of Grameen Bank in Bangladesh. It certainly improved the lives of millions of poor families in the country. It is an excellent example of how it empowered poor women and how much effort they put into their work, never missing a loan installment. Success, therefore, depends upon the one hundred percent repayment of loan installments. It also helped the women start up their small businesses, thus becoming financially empowered and a helping hand in the family. This verified its contribution to reducing poverty and improving their lifestyle to a great extent.
= Pakistan: A living and huge example is of Akhtar Hameed Khan’s “Orangi Pilot Project.” It is the most famous as well as an extremely successful project. People worked together and successfully built a reasonable locality where they live respectfully to date. This is a place well-equipped where all the necessities of life were made available and still are, in a much better and improved position.
= If you analyze the crime rate, surprisingly the rate declines when community people interact. In society, the elderly population plays a role of supervisor. The same is witnessed when it comes to health, education, and women empowerment. It is universally believed that a healthy individual builds a healthy society, and the same is true when it comes to women’s empowerment.
= Akhuwat Foundation: Another example is Dr. Mohammad Amjad Saqib, a living legend and founder of “Akhuwat Foundation.” He started his startup with a loan for a sewing machine to only a needy woman as qarz e hasna (benevolent loan). He was lucky to receive regular installments. With the recovered money, he started distributing loans to other needy women as well. The success story of a collective effort of the community in reducing poverty by empowering women provides evidence that social capital works for the betterment of people. The qarz e hasna rate of return is 99.9%.
Role of Policy and Obstacles
However, one single important factor that plays a major role in the success stories is timing. That is, when the opportunity knocks, you must identify it, grab it, and work hard. Policy makers and the government, if their objective is to help individuals and society, can do so with the help of social capital. In addition, it is also essential to develop some societal norms such as regulations and trust among individuals and the community. Through these, the objective of healthy living and schools for good education for children are established, which gives way to human capital development, which in turn leads to economic growth and development.
In this regard, it is the community that first and foremost provides help and interaction among individuals in Government Organizations (GOs) and Non-Government Organizations (NGOs) and other civil groups, consisting of clubs. Moreover, there are different associations that may include mohalla committees. Also, the “Ballot Committee” (BC) is very popular among ladies belonging to every income group. This helps in bridging the gap between middle-class and poor-class communities.
It is strongly believed that the success rate of social capital is based majorly upon trust and cooperation. These two characteristics are crucial in order to achieve the targets of economic growth and sustainable development. However, obstacles like nepotism and political instability erode the trust among the people. These hinder the characteristics of social capital and its success rate. Thus, economic development is the result of good governance and serious implementation of social capital.
