Growth and Social Capital: Empirical Analysis of the Relationship

Introduction

Contemporary, the question of what factors of production are and how they affect economic development is still relevant, although the range of factors that are essential for economic growth is expanding significantly. "Moving from the proximate to fundamental causes of growth also shifts the focus of attention to the institutional framework of an economy, to its 'social capability" by Hjerppe R. [13]. Indeed, social potential is increasingly seen as a fundamental factor in a long-term stable trajectory of development and growth. The idea of growth itself has been significantly rethought - the emergence of the concept of inclusive growth is currently changing the socio-economic policy, its priorities and instruments. The social determinants of development are in the focus of research in response to changing global development goals - the emergence of the Sustainable Development Goals and the Europe 2020 Development Strategy. The objective of improving the quality of the social environment is directly linked to the development of social capital.

Problem statement. Traditionally, social capital is explored as a result of the influence of social factors (level of trust, level of cooperation of people, etc.) only. There are also studies examining the impact of social capital on economic growth. However, there is an important research question unexplored so far, and how much social capital depends on the level of economic development of a country, particularly on growth indicators.

The purpose of the article is to investigate the link between economic growth and changes in social capital. Therefore, by testing the hypothesis that the economic growth rate of a country influences the change in its social capital, we will form an understanding of the opportunities for countries with different levels of development to increase their own social capital.

Social capital was introduced into scientific research by R. Patnam in a work where a comparative analysis of the institutional and economic development of the northern and southern regions of Italy was carried out. The difference was explained by "features of social organization such as trust, social norms and networks that can enhance the effectiveness of society by promoting coordinated action". Such ability to cooperate, in his opinion, determines social capital [1]. R. Patnam considers trust as a source of social capital, which is implemented through cooperation and coordination of people's actions and uses quality indicators of civil society development and civic engagement. He demonstrates social capital through the number of interactions between local people in the areas of community or organizational life, engagement in public affairs, community volunteerism, informal sociability, social trust [2].

Fukuyama equates social capital with trust, putting it on par with classical factors of production - physical capital and human capital. Arguing that trust increases the productive capacities of relationships between people, it is considered a form of social capital [2].

Some scholars emphasize the complex and, as a rule, abstract nature of the components of social capital and emphasize the complexity and even impossibility of measuring it. Therefore, they consider the need to evaluate social capital, not directly, but through the measuring and evaluation of its manifestations. Indeed, resources such as information, ideas and support relate to social capital, as opposed to education, skills related to human capital and, for example, technologies related to physical capital [3].

Exploring approaches to the definition of social capital, its sources of origin, forms of existence, leading Ukrainian scientists also come to the conclusion that traditional indicators used in statistical and sociological research in Ukraine (level of social tension, anomic demoralization index, cynicism index and national distance index) and in international practice (such as the Corruption Perceptions Index, the Government Index and the Economic Freedom Index) they cannot characterize it comprehensively. It is considered appropriate to ground the assessment of social capital on a measure of trust being measured by a set of indicators in two dimensions: overall trust between people and institutional trust.

In our opinion ISD offered by the International Institute of Social Studies are the most proper measures for social capital [4].

They meet the requirements of complexity, measurement simplicity, sustainability and ability to be used locally and nationally.

ISD consist of six integrated indicators of Civic Activism, Clubs and Associations, Intergroup Cohesion, Interpersonal Safety and Trust, Gender Equality, Inclusion of Minorities. Each of these indices was formed on the basis of the queries of scientists and their vision of the definition of social capital and its measurement.

Indices of Social Development (compiled by authors based on [5])