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The role of social capital in economic development has been a subject of interest to both academics and practitioners of development for several decades. However, empirical evidence on social capital in the context of developing countries is still relatively scant. This study explores the effects of social capital on economic development in Indonesia, a large and multi-ethnic developing country. Using district-level data for 2006–2019, we find that the relationships between social capital and economic development are complex. There are both favorable and unfavorable effects of social capital on economic development, as well as nonlinear effects. Hence, we cannot draw unequivocal conclusions on the benefits or disadvantages of social capital for economic development. Nevertheless, this study finds that trust among people across different ethnic groups, participation in communal works and social activities, and trust in government are the most important forms of social capital needed to improve people’s welfare.

This research investigates how and to which extent the social capital inherent in a firm’s external relationships to diverse business partners contributes to the firm’s intellectual capital and in turn fosters its innovativeness. We apply the Social Capital Theory to an inter-organisational context and show how a firm’s social relationships with its various external partners contribute to its intellectual capital, and how these contributions differ between different types of partners (e.g., customers vs. suppliers). In contrast to intra-organisational contexts, we show that the association between social capital and intellectual capital is positive, neutral, or even negative depending on the external partner’s position vis-à-vis a firm’s supply chain and the type of knowledge. Using data from 153 German manufacturing firms, the results of a PLS-based analysis provide important insights into how and through which mechanisms firms can become successful innovators.

Payments for Ecosystems Services (PES) schemes are an underdeveloped component of the policy mix for catchment management in many countries. The importance of intermediaries to such schemes is acknowledged in the literature but few studies go beyond theory to evaluate practice. This paper analyses generic intermediary functions for PES. It then evaluates an innovative example from southwest England that provides illustrations, and some lessons regarding necessary capabilities and characteristics for intermediaries, and understanding of their form, functions and modalities. The ‘UpStream Thinking’ project was co-developed by a private water company and an environmental charity. The former translated effective demand from shareholders and water customers for improved raw water quality into finance, whilst the latter had capabilities for catchment-scale on-farm delivery and trusted acceptance as an intermediary. While any sector can potentially provide a PES intermediary, the value driven, not-for-profit and politically neutral voluntary sector proves to be a good fit. Such ‘boundary organisations’ are also well placed for horizontal coordination of catchment management authorities and actions.

Recent decades have witnessed an unprecedented expansion of democracy. During the third wave of democratization, as described by Samuel Huntington, democracy spread well beyond its historical boundaries and it is now adopted in all major regions of the world. Yet, not all democracies are equally effectual in delivering good governance and progrowth policies. Why do democratic institutions induce good governance and prosperity only in some economies? This paper presents an overview of the dimensions along which successful and unsuccessful democracies differ. It argues that four socioeconomic variables are of critical importance to create and maintain a well-functioning democracy: (i) social capital, (ii) information, (iii) education, and (iv) equality. History also plays an important role as do the contingencies characterizing the collapse of authoritarian regimes and the emergence of democratic institutions.

This paper investigates the relationship between social capital and innovation in high-performing East Asian economies. Rapid economic growth and innovation in these economies contradicts the presumed positive link between social trust and innovation suggested in the literature, as these economies are often characterized as low-trust societies. The results of the multilevel analyses conducted in this paper show that social trust among individuals is not a driving force of innovation in East Asia. Instead, other elements of social capital—shared social norms of supporting collective developmental goals and trust in formal institutions—are more important determinants of innovation. This finding reveals the region-specific developmental path of East Asia—states set innovation and growth as common goals for society and played an active role in initiating and coordinating efforts to achieve them.