Sustainable Consumption Institute launches Discussion Paper Series with Professor Sir Partha Dasgupta

09 March 2010 Sustainable Consumption Institute

On 9 March 2010 the Sustainable Consumption Institute Discussion Paper Series was launched with the paper “A Matter of Trust: Social Capital and Economic Development”. The online publication, written by Sir Professor Partha Dasgupta, is the first in a series of original research papers to address a broad range of sustainability related topics. Professor Dasgupta, a world-leading economist, is a Professor of Environmental and Development Economics at the Sustainable Consumption Institute.

SCI Discussion Papers will include a broad range of issues such as social capital, market failure, energy policy, and sustainability of life styles, habits and preferences, sustainability of business value chains and sustainability of system and process innovations to name a few.

Sir Dasgupta describes this latest paper:

"In recent years a great many scholars have argued that the formation of social capital is the engine of economic progress. Many others have noted, however, that the evidence is mixed. In this paper I argue that the deep requirement for economic progress is the development of trust among people. Defining social capital in lean terms, namely, as "interpersonal networks", I show that when suitably directed, social capital can build and sustain trust; but if it is misdirected or if it operates in the wrong sphere, it can hamper economic development and even cause economies to regress.

"I argue, moreover, that if the idea of social capital is to serve a useful purpose in economics, it should be interpreted as interpersonal networks whose members develop and maintain trust in one another to keep their promises by the device of "mutual enforcement" of agreements. But trust is the key to cooperation; "social capital" when suitably applied, is only a means to creating trust.

I also show that a natural place to look for the worth of social capital in macroeconomic statistics in "total factor productivity" (TFP). But that implies that TFP is an amalgam of technology and institutions. The paper concludes by demonstrating how an increase in trust among people would result in an increase in total factor productivity, which is another way of saying that an increase in trust among people would lead to an increase in the economy's wealth.”

The SCI Discussion Paper Series would interest academics in business administration, economics, psychology, industrial design, environmental studies, sociology, environmental and engineering as well as policy makers and managers.

To view the paper please visit the SCI website at:

http://www.sci.manchester.ac.uk/publications/discussionpapers/dp1/