Association for Studies in Public Economics

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Association for Studies in Public
Economics ANTI-MODERN AND MODERN EFFECTS OF
SOCIAL CAPITAL Professor RICHARD ROSE
FBA Director, Centre for the Study of Public
Policy U. of Strathclyde, Glasgow email
prof_r_rose_at_yahoo.co.uk GRADUATE SCHOOL OF
MANAGEMENT ST. PETERSBURG UNIVERSITY 11
November 2011
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MODERN AND ANTI-MODERN ACTIVITIES COMPARED
Modern Anti-modern
Rule of law Yes, bureaucratic Arbitrary, political
Openness Transparent Opaque
Signals Prices, laws False accounts, bribes, personal contacts
Cause and effect Predictable Uncertain
Output Efficient Inefficient
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SOCIAL CAPITAL DEFINED Networks that produce
goods and services in a society. ?Networks
are relational (James Coleman, Granovetter) ?Ne
tworks can be informal, personal between
individuals ?Networks can be formal,
organisational, bureaucratic ?Can combine
informal links within and between formal
organisations
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SOCIAL CAPITAL IS NOT ?Attitudes of trust.
Trust is a by product of interaction in social
networks. So is distrust. Contra Putnam,
interpersonal trust does not readily spill over
into trust in formal organizations or political
institutions. ?Formal organisations.
Significant--but only as one partner in a
network e.g. Between individual and government
agency e.g. Between public and private
organisations providing financial services
?BUT social capital networks are based on
expectations and reputations of how others in a
network will react
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DIFFERENT USES OF SOCIAL CAPITAL ?Exchanges
can involve cash payments (bribe) or
non-pecuniary forms of blat. ?Outputs
produced are observable, e.g. health care,
University admission ?National income accounts
can include outputs from modern social capital
networks but exclude outputs form anti-modern
networks.
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DIFFERENT FORMS AND USES OF SOCIAL CAPITAL
Positive
MODERN ORGANIZATIONS WORK
Public sector allocates by law
Police will help protect house from burglary 43
Social security office will pay entitlement if you claim 35
Market allocates to paying customers
Buy a flat if it is needed 30
Can borrow a week's wage from bank 16
INFORMAL ALTERNATIVES
Non-monetized production
Growing food 81
Can borrow a week's wage from a friend 66
PERSONALIZE
Beg or cajole officials controlling allocation
Keep demanding action at social security office to get paid 32
Beg officials to admit person to hospital 22
ANTI-MODERN
Re-allocate in contravention of the rules
Use connections to get a subsidized flat 24
Pay cash toa doctor on the side 23
PASSIVE, SOCIALLY EXCLUDED
Nothing I can do to
Get into hospital quickly 16
Gets pension paid on time (pensioners only) 24
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NETWORKING STRATEGIES IN DEALING WITH PUBLIC
SERVICES
Q. What would you do if you had difficulty in
getting a public service? Bureaucratic Write
a letter of complaint, push officials to
act Market Buy in the private sector
Anti-modern Offer a bribe, use connections,
make up a story
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MODERN AND ANTI-MODERN WAYS TO GET HEALTH CARE
Getting treatment for a painful disease when hospital says one must wait for months Getting treatment for a painful disease when hospital says one must wait for months Getting treatment for a painful disease when hospital says one must wait for months Getting treatment for a painful disease when hospital says one must wait for months Getting treatment for a painful disease when hospital says one must wait for months
Strategy Strategy Strategy Strategy
Anti-modern connections Personal Market Passive
Russia 57 13 11 19
Ukraine 39 12 34 15
Czech Republic 24 31 31 14
Sources Russia Social Capital Survey. New Europe Barometer Survey V. Sources Russia Social Capital Survey. New Europe Barometer Survey V. Sources Russia Social Capital Survey. New Europe Barometer Survey V. Sources Russia Social Capital Survey. New Europe Barometer Survey V. Sources Russia Social Capital Survey. New Europe Barometer Survey V.
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SOCIAL CAPITAL AFFECTS INDIVIDUALS
?COPING with costs of system failure,
transformation e.g. growing food at dacha
?SUPPLEMENT to goods and services obtained in
official economy. ?COST Buying nominally
free services Effort, anxiety
from storming, unpredictability of bureaucratic
services ?DETERIORATION in human capital from
inefficiencies in health, education
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MACRO EFFECTS OF ANTI-MODERN SOCIAL CAPITAL
?INEFFICIENCY Raises transaction
costs ?ENCOURAGES PROFITS FROM TRADING
(especially off the books) ?DISCOURAGES FIXED
DOMESTIC INVESTMENT
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POTENTIAL RISKS OF ANTI-MODERN SOCIAL CAPITAL
?EQUILIBRIUM TRAP. Persistence of current
conditions .Loss of potential output through
inefficiency, under-investment .Reduction
in potential human capital ?NEGATIVE
DISEQUILIBRIA .Oil prices and revenue fall
below equilibrium point .Social and political
protests against unfairness, inefficiencies,
corruption
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By Richard Rose Understanding Post-Communist
Transformation A Bottom Up Approach. London
Routledge, paperback, 2009. "Social Shocks,
Social Confidence and Health". In Judyth Twigg
and Kate Schecter, eds., Social Capital and
Social Cohesion in Post-Soviet Russia. Armonk,
NY M.E. Sharpe, 2003, 98-117. "Uses of Social
Capital in Russia Modern, Pre-Modern, and
Anti-Modern", Post-Soviet Affairs, 16,1, 2000,
33-57. "How Much Does Social Capital Add to
Individual Health? A Survey Study of Russians",
Social Science and Medicine, 51, 9, 2000,
1421-35. "Getting Things Done in an
Anti-Modern Society Social Capital Networks in
Russia". In Partha Dasgupta and Ismail
Serageldin, eds., Social Capital A Multifaceted
Perspective. Washington, DC The World Bank,
1999, 147-171. plus James S. Coleman 1990.
Foundations of Social Theory. Cambridge, MA
Harvard University Press.