How does social capital influence development?
Problem: Low social capital leads to potential conflicts and high transaction costs which hinder growth. Several LDCs (Less Developed Countries) lack social cohesion. As example like:
• A lack of trust in between Christian and Muslims into Nigeria means a fall into output, less educational and lower incomes opportunity for all.
• A major purpose for South Africa making a successful transition through apartheid is the efforts made through the government to encourage social inclusion and integrate white and black South Africans into one nation Implications that social capital should be in place before growth can arise.