ABSTRACT
Observers agree that the pace of the Baltic states’ transformation has been adversely affected by the low level of investment in social capital over the years of Soviet occupation. By social capital, we mean the government actions and nongovernmental behaviors that enhance the efficiency of government and contribute to the well-being of a nation’s citizens. It includes norms, networks and voluntary institutions, citizens’ trust and the trustworthiness of government representatives, citizens’ civic engagement, and other factors that vary according to who is writing about the concept (Dowley and Silver 2002; Portes 2000; Putnam 1995). Despite the slight differences in what is and what is not social capital, there is widespread agreement that countries and regions with higher levels of social capital appear to enjoy higher levels of growth, and their citizens are usually happier and healthier (Kaasa and Parts 2008).
