ABSTRACT
This chapter examines how culture shapes, and is shaped by, relationships and social capital. It discusses the interdependence of social capital and culture, and their combined influence on economic and political outcomes. Deeply held cultural values in society can dictate the ways in which individuals invest in social capital. Societies high in bonding social capital have attachment to family over rational legal bureaucracies. This means that organizations based on family relationships will probably thrive. A value or kernel that cuts across families and tribes, and creates linking social capital, will strengthen formal institutions. Without bonding social capital, socio-emotional goods (SEGs) would be difficult to produce. The lack of more equal linking social capital would make it difficult to create the relationships necessary for specialization and trade. Cultures that have a combination of types of social capital are probably more likely to support both formal and informal institutions.
