Social Capital in Economics

Social capital in economics refers to the networks, relationships, trust, and norms among people that facilitate cooperation and collective action within a community or society. It helps reduce transaction costs, enhances collaboration, and supports economic activities by fostering trust and mutual support. Strong social capital can lead to better community well-being, improved economic development, and increased resilience during challenges. Essentially, it’s the value derived from social connections that enable individuals and groups to work together more effectively for mutual and collective benefit.