Social Capital in Transition: A First Look at the Evidence

This paper provides what we believe to be the first collection of data on social capital in the transition countries of Central/Eastern Europe and of the former Soviet Union. Using data from the World Values Survey 1990 and 1995 we document the degree of trust and of civic participation and find that these indicators of social capital are significantly lower than in OECD countries. The paper also provides a preliminary investigation of the link between social capital and growth during transition. Unlike in market economies, in transition countries trust is not positively related to growth; while participation in civic organisations shows a positive correlation. We also construct indicators of trust in public institutions and find positive correlations with growth rates. The positive association of civic participation with growth is robust to the use of instrumental variable techniques to control for potential problems of endogeneity.