Social capital is generally interpreted as the degree of trust, co-operative norms and networks and associations within a society. Economists have become increasingly interested in social capital, following the seminal work of Coleman (1988) and Putnam (1993). Since the publication of these...

There is a growing literature which analyses, using cross-country data, whether institutions or geography is the most important deep determinant of income per capita. The empirical proxies used for institutions in this literature, however, focus only on formal institutions, rather than informal...