Recently, we discussed the low ranking of Georgia when it comes to social capital (“Since When Do Georgians Trust Banks More Than Friends?”). In the 2012 Legatum Prosperity Index our country ranked #140 in the social capital subindex, out of 142 surveyed countries! This seems unbelievable and even shocking, but if we explore the topic a little bit deeper, we may find reasons for such a low ranking.

The World Bank definition of social capital is the following: “Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions.” It goes on: “Increasing evidence shows that social cohesion is critical for societies to prosper economically and for development to be sustainable. Social capital is not just the sum of the institutions which underpin a society – it is the glue that holds them together.” To put it less technical, social capital is about getting people together, facilitate collaboration, and about doing good things for each other and for the society as a whole.

Researchers distinguish two types of social capital: bonding and bridging social capital. The bonding social capital refers to inward-looking networks and in-group solidarity. It is characterized by tightly-knit relationships and closed family and clan networks. Bridging social capital, on the other hand, is collaboration between people in a more formalized way. It refers to outward-looking networks and is keeping together people from different groups (like civil rights movements). It turned out that bridging social capital is instrumental for achieving more sophisticated and long term goals, it is thus considered to be more crucial for a country’s development.

A study conducted between November and December 2010 by the Caucasus Research Resource Centers (CRRC) on Social Capital in Georgia showed that Georgia exhibits strong solidarity when it comes to in-group networks. Yet Georgians rarely formalize and institutionalize their collaboration when considering out-group activities. This means that, while bonding social capital may be abundant, the country lacks bridging social capital. The Legatum Prosperity subindex of social capital is mainly assessing the amount of bridging social capital by determining the level of volunteering, helping strangers, and donating to charitable organization in a society. It shows a result very similar to the CRRC findings. Except for the high marriage rate, which indicates bonding social capital, Georgia ranked below the global average in all categories in the Legatum Prosperity Sub-Index.

THE SOVIET HANGOVER

One of the main reasons why the Georgians lack bridging social capital may be the country’s Soviet past. Authors working on the issue of social capital in transition counties agree that former Soviet Union countries started with a very low level of bridging social capital. People depended on trust among friends and close relatives during the Soviet times, while bridging social capital was either missing entirely or very artificial and controlled by the state. A society which has experienced (directly or indirectly) such formal involuntary memberships like Young Pioneers feels a deep mistrust towards formal public institutions, and many people prefer not to join public organizations. The experience of civil institutions that were governed by the communist party still today causes suspicions towards any kind of institutions itself. For example, even now, more than 20 years after the collapse of the Soviet Union, many farmers still refuse to create agricultural cooperations, resisting all attempts to convince them of the considerable benefits such cooperations have in Georgia.

GENERATING BRIDGING SOCIAL CAPITAL

Georgia is in a process of ongoing democratization and changing political paradigms. Since many years, the way the country organizes its economy shifts from “command and control” to “leading and monitoring”. Yet in free Western market economies, bridging capital is of utmost importance. You cannot run an advanced market economy successfully by relying preliminarily on friends and family networks – the result would be high levels of corruption and nepotism. The traditional example of a society that made this wrong turn, lacking bridging social capital while being well endowed with bonding social capital, is Southern Italy (in particular Sicily). Once a society is on a trajectory of ill development like Sicily, it is extremely difficult to get back to more favorable conditions, and one should at all cost avoid running into such a situation in the first place. So while the top-down approach of Soviet times was favorably replaced by a bottom-up approach in modern Georgia, the transformation is not accomplished as long as Georgians are lacking bridging social capital.

Unfortunately, the creation and development of social capital is a difficult and time consuming process. Yet when the society is slow in unfolding its resources autonomously, the state may set additional incentives for the formation of social capital. An example is the way how the Tbilisi City Hall is funding the renovation of the roofs of residential buildings. For getting the roof of a residential building renovated, two conditions need to be fulfilled. Firstly, the inhabitants of a building have to elect a representative who can communicate with the authorities on behalf of all residents. Secondly, the inhabitants have to be willing to bear some of the costs themselves. This leads to formalized cooperation between neighbors, who are usually neither relatives nor friends, and it induces citizens to take responsibility for the society beyond close social environments. In the building where I am living, it took one and a half year for me and my neighbors to gather and elect their representative. Hopefully, we will have a new roof soon!

It will be crucial for Georgia’s prosperity how it develops in this regard. Will the scarcity of social capital be overcome in the course of time? Despite the urgency of the matter, we should not be impatient – social changes need rather decades than years.