Social Capital Theory: Networks, Trust and Gender in Ethnic Economies

Most people who use social capital as a tool in research discussions often begin by noting the difficulty in its definitions, inconsistencies and weakness and the measurement problems in principle and practice of using the concept. Yet, by and large, and in spite of the multiple critics of the subject, the social capital literature has grown. Specific problems plague its use from one context to another; the lack of emphasis for the structure, the process that can mean anything and everything and its inability to theorise class divisions such as class, gender and ethnicity are among the many issues that plague the use of social capital. Despite the popularization of social capital over the last decade or so in virtually all fields of the social sciences, there is no one single definitional concept for it, rather a pluralist repertoire exists

For this piece, I adopt Deepta Narayan’s definition of social capital as the norms and social relations embedded in the social structure of society that enable people to co-ordinate action and achieve desired goals (Narayan, 1999). Social capital describes circumstances in which individuals can use membership in groups and networks to secure benefits. Indeed, it has been likened to the ‘missing link’ in economic understanding of the workings of the market yet sharing commonalities with human capital (Lin, Cook, & Burt, 2001). This is because previous models of economic fundamentalism have tended to capture in their framework the idea that either the individual is free from cultural reference on the one hand or totally subordinate to social norms on the other. In this way economy and culture have been theorised as mutually exclusive when dealing with development paradigms in particular (Radcliffe, 2006). Social capital in its essence is said to capture the dual notion of two intricate theories, social networks and social resources. Social networks are exhibited in relationships that allow individuals to claim access to resources possessed by their associates, while social resources refer to the amount and quality of those resources (Hurlbert, Beggs, & Haines, 2001). I argue here that attention to those networks often yields a mundane and altruistic use of the term without paying attention to structure.

The term social network or social network capital has been used to describe agents that derive benefits from knowing others with whom they form networks of interconnections (Fafchamps & Minten, 2002). Granovetter (1973) developed this idea of network by recognising that certain ties can affect the strength of the identities that give a group a common purpose. This leads to two propositions.

The first proposition is that the network view creates negative consequences for groups when loyalties become so strong that this ultimately results in the neglect of those who are not affiliates of such groups, For example, weak intercommunity ties like those formed through affiliations across religion, ethnicity, gender and social class produce strong horizontal ties and can become the basis for the pursuit of narrow sectarian interests (Granovetter, 1985). A second proposition is that the sources of such networks require distinguishing from the consequences of the resultant effects of being affiliated to such groupings. These positions have arisen largely to address the literature of social capital that has dwelt more upon reflecting on the positive virtues and desirable outcomes of social capital (Narayan & Woolcock, 2000). For the positive outcomes often ascribed to social capital often preconceive the erroneous view that strong ties alone are beneficial in successful groups and dense communities, yet at the same time neglect the fact that such ties prevent the success of otherwise similar groups (Narayan & Woolcock, 2000) .

This is because strong and weak ties are both needed in the definition of the workings of social capital and these network structures and ties are what are called upon to facilitate and constrain access to social capital. It is thus possible to consider that the mechanism of social capital can help to explain both the issues of exclusion and of cohesion as it proffers explanations mainly on the same ties that bind, but which can also effectively exclude (Narayan, 1999). The role of social networks becomes all the more evident when it is noted that all societies are composed of social groups and it is these social groups that set the parameters for governing and determining beliefs, identity, and access to power. These inclinations are further subdivided on the basis of caste, class, gender, religion and ethnicity. Within these groupings, Narayan refers to what can be distinguished as bonding and bridging. The exhibition of high social capital within a group (bonding) helps members, but may lead to exclusion from other groups that lack social capital (bridging) (Narayan, 1999).

In all of this, it is unmistakable that the idea of social capital emphasises collectivity. Yet there seems to be a clear distinction between social capital as a panacea for public good as opposed to a concept of a social network, a concept that suggests exclusion per se (Mohan & Mohan, 2002). A better way or positive inclination has been to consider the issues of trust and interaction which are another idea of social capital.
The role of trust has been particularly important in helping us to understand how networks are glued together to produce social capital. Trust, according to Fukuyama (1995), is the expectation that arises within a community of regular, honest and cooperative behaviour, based on commonly shared norms, on the part of other members of the community. By this understanding it is assumed that people are more likely to trust even strangers on the basis that they share common traits such as religion, race, vocation or other characteristics that are similar to their own (Batt, 2008). The theory of social capital as propounded by Robert Putnam argues that membership of networks promotes intrinsic properties of social capital and promotes political and economic growth (Putnam, 1995) through these trust-based mechanisms.

These weaker connections in the social structure are what have been termed holes in the social structure and these holes create advantages for individuals whose relationships span the holes. This does not mean that there is restricted flow, but that people are so focused on their own activities that they do not attend to the activities of the other group. Thus these people who have networks rich in structural holes operate in spaces in the markets where it is possible to do so, building bridges. This argument leads to the concept of network closure. In networks where there is closure everyone is connected to each other and no one can escape the notice of others. This is because closure provides social cohesiveness within an organisation or community – dense networks are the source of social capital (Burt, 2001). ‘Bonding’ together focuses on collective actors’ internal characteristics, while ‘bridging’ focuses on external relations. It seems that any discussion on participation must proceed from an understanding of the structures of the ties that make up social capital as well as their content (Adler & Kwon, 2002). This is because the issue of structure has been conceived of in the light of the debates on holes and network closure. However, the problem of content involving commonly shared norms and abilities have rarely been problematised in the production of networks and social capital. An understanding of norms and beliefs is essential to gain an understanding of the provision of social capital as it underpins the function of the sources of social capital in the environment which influence the value of a given stock of social capital. The weak ties of horizontal networks that are manifested can make members of a community restricted from participating in wider networks because of community ties (Lyon, 2000).
It is, however, noted that the nature and origin and basis of these associations seem to play no role in the prior discussions of social capital, for these associations are often mistaken as given and this in itself provides a fallacious and misinterpreted insight into the workings of social capital. The concept of trust is one that is acknowledged to rely heavily on existing norms that are in turn related to the cultural background of people, and it is this kind of morally contextualised norm that shapes individual institutions and relationships. When looking into such issues it is possible to conceive the individual not as given, but shaped by history, social structures as gender, ethnicity and class and in such a way this does away with methodological individualism and focuses on a concept of the institutions as formed and sustained by habit. It is, however, often unclear how these repertoires of behaviours come to be entrenched as the standard for adjudicating trust (Solow, 1999).

The question of social norms is another issue that arises in relation to trust as members of highly connected or sense communities are more likely to trust. Such common values and norms are often based on kinship, religion, ethnic status or family background and it is within these kinds of primary social systems that individuals seem to be more capable of trusting themselves, because it is within such structures that the actions of norms and networks are embedded (Granovetter, 1985). According to Lyon (2000), norms can be seen as part of social structure or a habit that shapes actions and allows agents within a framework to do away with risk. This implies that norms cannot be self-willed, but rather are historically rooted cultural endowments. However, despite these assumptions of the embeddedness of networks and trust as working so social capital in norms, there is little empirical evidence to account for how and why social capital and trust are created and how these enable complex exchange. Remedies in respect to tracing the importance of networks or associations and their relevance to trust have been suggested. Arrow (1999) suggests that, rather than alienating these networks as is so often done in many discussions, it might be best to begin to think about how existing social relations manifested in a pre-existing network give birth to the essence of a social network, for such networks he suggests are built for purposes other than the economic. Such a setting provides a way of understanding how these trust-based mechanisms are incorporated, for these social networks are capable of affecting trust through the social interactions that necessitate trust relationships, which can have negative and positive consequences resulting from the related workings of the environment in which people make their choices and the willingness to permit the decisions of others to influence welfare. In order to expand this moral norm of trust there is a need to demonstrate the importance of the cultural context and at the same time identify those factors and conceptual frameworks that transcend culture (Lyon & Porter, 2007). One argument that has been proposed as means to understand these intricacies is the introduction of ethnic economies, and I will briefly pay attention to a critique of this below.

Social capital has emerged as a key idea in development studies as a probable avenue to begin to espouse the doctrine of women’s empowerment. However, it is blatant to see in the literature examined so far that the idea of social capital has been slow to integrate the idea of gender and women in its key ideology. Although slight references to gender are picked in the wider arguments, the general application of the terms are largely neglected. This is particularly important when discussing networks, community ties and kinship in refining policies for and research on ethnic entrepreneurs and their effect on gendered activities. (Molyneux, 2002). Furthermore, it has been suggested that the practical policy implications of social capital are by no means clear.

Molyneaux (2002) suggests that to strengthen the social capital framework there is a need for the analysis to be located in community associations and to restore indigenous institutions to develop participatory mechanisms particularly in the light of the fact that these social capital discussions have been intrinsically male centred. The investigation of participation will fare better from a consideration of how the processes of inclusion and exclusion are almost always gendered processes and tend to favour social capital in male networks. There is need to build on a gendered perspective that considers feminist networks and the associations used to build up new forms of social capital. Social capital has recently been employed in the development paradigm to further the course for empowerment and financial sustainability. In doing so, the objectives have ignored questions raised about networks and collective action and the degree to which social capital enhances poverty targeting in particular (Mayoux, 2001). In doing so, gender dimensions are minimal as there are striking differences between men’s and women’s networks, but no discussions on how gender inequality structures the ways in which different types of social capital can operate to the disbenefit of women (Mayoux, 2001).

This supposition about the enactment of gender in the social capital discourse is somewhat problematic, as has been suggested by Renzulli et al (2000), who in their work on entrepreneurship show that a high proportion of kin and homogeneity in a network rather than a high proportion of females in a network or being female are critical disadvantages facing small business owners (Renzulli, Moody, & Aldrich, 2000). On the other hand, Porter et al (2005) note that for local ethnic groups that are spatially extended, it has been suggested that trust-based systems rely more on religion as opposed to ethnic ties. These findings are, however, truer of men than women, implying that ethnic ties are still particularly important for discussing women roles. It also further suggests that moral regulation by itself is imperfect and inevitably compromised by inequalities of power for which simplistic notions of social capital may not be completely valid (Porter, Lyon, Obafemi, & Blench, 2005). In coming up with such an argument that supports a gendered perspective for the utilisation of social capital in advancing the course of development and poverty reduction targeted programmes, it is noted that there are geographical peculiarities that shape economic activity in distinct and local and ethnic contexts. This is because norms and relations are always place- and network-specific and affect the way in which gendered networks and social capital are interpreted and enacted (Silvey & Elmhirst, 2003). Women and men are said to inhabit different networks and as such reap differently from the workings of social capital. The extent to which this is true is, however, highly doubtful, as it is difficult to envisage how women’s networks differ from men’s networks. If this is truly the case, what does a women’s network possess in relation to a male network and how does this construct their benefits from social capital.

Several explanations have arisen for this reasoning, from early childhood, genders tend to mix among same sex peers, and with transition to adulthood, these distinctions are even more distinct, with women possessing more kin relationships than men. In this way, because women tend to have fellowship within a tight maze of people, they are often at the receiving end of redundant information. It is assumed they are unable to tap into the dynamic of weak ties for their lack of legitimacy.

According to Hanson & Blake (2008), because networks are always about social interactions, relational association between individuals, they are always about gender. Pursuing this argument further, they come to the realisation that gender saturates male-female interactions and occur where men have higher status than greater power. It is important to move beyond the argument of divergent homophilic networks to how mixed gendered networks are constructed, i.e., how women are positioned within social networks in the economic sphere and how these positions aid or deter the benefits that accrue to social capital. The question of completely homophilic networks is somewhat troubling and quite rare. Women’s ties are often largely discussed in relation to kin ties and other female ties. As these informal channels tend to be used by females, it is already a disadvantage, as they are deemed to populated by the less educated and the less skilled, the status attained tends to be lower, yet among those who use informal channels, the social resources (status of the contacts) makes a major difference; the advantaged possess greater human capital and can apply directly to a high status position. How useful are these kin relationships in the economic realm, how far can they go and do they apply for all cases? It seems that the answer to these questions lies not in the strength of ties, but the extent of the ties (Lin, 1999). It is crucial to understand how women can improve their access to weak ties, relationships that transcend kin and familial networks, as these ties seem to be the key determinant in prophesying their doom. It seems that the possession of both strong and weak ties significantly offers better opportunities as, the more extensive the network, the more resources can be mobilized and accessed.