Main Messages

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Social Capital and the Changing Wealth of Nations

Matthew Agarwala and Dimitri Zenghelis

Main Messages

• Social capital is not measured as part of the Changing Wealth of Nations (CWON) core accounts. Nonetheless, trust, networks, social interactions, and the ability to achieve outcomes requiring collective action are important determinants of social, health, and economic outcomes. • Despite social capital’s importance, the lack of a precise and universally accepted definition has undermined its measurement, valuation, and integration into mainstream economic analyses. • Social capital is not readily amenable to valuation within the System of National

Accounts, but this valuation challenge in no way reduces its impact on economic performance. Just as it did for natural capital, the evolution from theoretical concept to consistent accounting will take several decades of development and refinement.

The authors are grateful to Yamini Cinamon Nair for excellent research assistance. We are grateful to Diane Coyle, Marco Felici, Margreet Frieling, Kirk Hamilton, Thomas Kelsey, Michael Kenny, GlennMarie Lange, Saite Lu, Grzegorz Peszko, Conal Smith, Rob Smith, Joel Sobel, and colleagues at the Bennett Institute for Public Policy, University of Cambridge, the Centre for Social and Economic Research on the Global Environment (CSERGE), University of East Anglia, the UK Office for National Statistics, and the CWON Editorial Board for fruitful discussions and insightful comments. Any errors are the authors’. Funding from the Wealth Economy Project supported by LetterOne is gratefully acknowledged.