Governments the world over use a number of measures to understand how well they are doing in running their country. They measure performance in terms of growth of assets, those things which can be accumulated for the benefit of society. Those assets include wealth in financial terms, health in terms of average life-span, and knowledge in terms of educational attainment. Then there is social capital, the asset accumulated from the social interaction of people in society which not only increases well-being but also contributes to the accumulation of all the other assets. The problem with social capital is that it is ill-defined and there are no objective ways to measure it directly.

An OECD report says “despite the high level of interest in social capital and related concepts, there is little agreement about the best way to define and measure it. This has hampered the development of internationally comparable data collection ….. the reason for this impasse is that there is not one unitary concept of social capital, but rather a number of distinct concepts which have been grouped together under social capital as an umbrella term.” It goes on to say “If researchers and policymakers continue to measure and analyse ‘social capital’ as a catch-all, multi-dimensional phenomenon related to all things social, then knowledge about exactly how social interaction affects well-being is unlikely to advance.”

The World Bank says that “the lack of an agreed-upon and established definition of social capital, combined with its multidisciplinary appeal, has led to the spontaneous growth of different interpretations of the concept.”

We can say what social capital is about. It is an asset which is acquired through the interaction of people in a social network which provides benefits for the individuals in the network and for the group as a whole. Social capital is about ‘togetherness’, the cohesion or bonding which results from people building strong, durable relationships which are characterised by such things as trust, respect, dependence, reliability, goodwill, affection and integrity. The behaviours which complement those characteristics are the very ones which enable a relationship to develop with a high level of social capital. Behaviours like speaking the truth, having someone’s back, doing what you say you will, not talking behind someone’s back, helping out in times of need, being open and honest, being altruistic and reciprocating, being sympathetic and empathetic, caring and compassionate, listening patiently and not being judgemental, showing interest and sharing, settling differences quickly without acrimony and not holding grudges. What individuals get from such high-quality relationships includes a sense of belonging, security and safety, of certainty and comfort, happiness and mental well-being. What the group gets includes high levels of collaboration, cooperation and productivity, stability and sustainability.

Two people or more with high social capital are close friends, besties, buddies, they are a couple or comrades or mates. A group of people with high social capital in every relationship, where everyone is everyone else’s close friend, is a clique. Social capital is what turns relatives into a family, a street into a neighbourhood, a group into a team, teenagers into a gang, a village into a community, a country into a society. Without being able to define it exactly, we can all understand it because we are all human and we know it when we see it. What’s more, we know how it feels to be in relationships with high social capital and how it feels when we’re not.

So, we can have a go at defining social capital based on this understanding. It is “the asset derived from social interaction which provides benefits for individuals and groups which cannot be derived from the actions of an individual alone.”

If that’s what social capital is, how can it be measured? It can’t be counted like money or years of life. It can’t be tested objectively as we do with SATs and GCSEs. How do we know if it is going up or down? How do we compare one society or social group with another? Because there is no accepted universal definition of social capital, many of the things measured as social capital do not fit the definition above. An example commonly seen is political engagement measured by voting data. As there is no social interaction involved in voting, this would not fit the definition. Because there is no direct measure of social capital, it is often measured using a proxy of either a cause of social capital such as the number of interactions between individuals or an effect of social capital such as levels of cooperation. One commonly used subjective measure is ‘trust’ which can be quantified by questionnaire. However, there is a significant danger with using trust as a proxy for social capital which I will return to later.

One way to be as objective as possible is to use network theory applied to social interaction as the measuring tool. This helps to ensure that what is being measured is consistent with the definition by specifying that the links in the network are social interaction. If there is no social interaction, as is the case with voting, then there can be no social network to analyse. Networks are, at least in part, objective structures. In a social network, the nodes are ‘actors’ or people and the connections between them can be established with some degree of certainty, they either exist or not. There is still the problem of establishing the strength of each connection or link. In some cases, this could be objective, for example counting the number of interactions between individuals as the measure of strength. In other instances, it could be subjective by asking a question such as “on a scale of 1 to 10, how much does your well-being depend on this other person?” In either case, given the structure of the network and the strength of the links, standard network analysis tools can be used to derive the metrics for the network. One of those metrics is know as Average Weighted Degree which accounts for both the number of links and the strength of those links. Consistent application of this methodology over time and between networks would answer the measurement questions.


What is it about trust that makes it a risky proxy for social capital? It can be summed up in the expression “all social capital is about trust but not all trust is about social capital”. So, the risk is that, by taking trust as a proxy for social capital, we assume that all measurement of trust is measuring social capital and it clearly is not.

Trust is action based on belief. The action is one of doing something which means that your well-being is dependent on the object of your trust. The belief is that the object of your trust will take care of you when you do what you do. Here is a simple example. When you sit in a chair, you do so in trust that the chair will support your weight, it will not collapse and you will not be injured. You do this based on a belief that the chair is sound and that it matches your expectations based on previous experience. This is an action based on belief and most of the time you will be justified but there is no guarantee. If we measured the trust that people have in a variety of chairs, we would not (hopefully) mistake the relationship with the chair as being in any way associated with social capital. So, no risk there. But what about trust in people? For example, if we asked people about their levels of trust in politicians or doctors or teachers or strangers, would that tell us anything about social capital? In the majority of cases, no. Most people do not have direct social interaction with those people and, without that relationship, there can be no social capital. Trust in people can be based on experience gained through a direct relationship, from reputation based on other people’s experience, from role stereotyping, from position of authority or from blind faith. It is only the first, trust based on direct personal experience through relationship which is a measure of social capital.

The risk is that, when measuring trust between people, it can be mistaken for the measurement of social capital when it isn’t. It only works in the context of a social network, where trust between linked individuals can be used as a measure of the strength of the link and a proxy for the measure of social capital. Outside that context, it is just a measure of trust and no more.