It is argued in order to explain large differences in the level of the development and the growth of economies cannot be adequately explained only by looking the traditional inputs of labour, capital and natural resources. The hypothesis is that also the role of social capital needs to be taken...

Social capital facilitates cooperation in the society. High level of social capital promotes economic efficiency by lowering transaction costs. Trust towards strangers and low level of corruption are examples of high level of social capital. The concept of social capital is already an old one,...