Policy document
September 25th 2013

Social Capital, Product Imitation and Growth with Learning Externalities

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World Bank
World Bank
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The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. It was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF), and both are based in Washington, D.C.
Agénor, Pierre-Richard and Dinh, Hinh T.
Links between social capital, human capital, and product imitation are studied in an overlapping generations model of endogenous growth where the key benefit of social capital is to promote imitation. There is also a two-way interaction between imitation and human capital. Building social capital (which brings direct utility) requires time. Because life expectancy is endogenously related to human capital, time allocation between market work and social capital accumulation is also endogenously determined. Social capital accumulation depends also on access to infrastructure. The model is calibrated numerically for a low-income country. A policy that helps to promote social capital accumulation may be very effective to foster economic growth, even if it involves offsetting cuts in other productive components of government spending, such as education outlays or infrastructure investment. Offsetting cuts in infrastructure investment, however, may be less effective.

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Language: eng
42 pages

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Identifiers

Overton ID
worldbank-be43b8de4c588832e3d0e4d7d1e27efc
doi
10.1596/1813-9450-6607
handle
10986/15824

Topics in this document

Institution Profit (economics) Market (economics) Trust (emotion) Social capital Economics Education Public–private partnership Externality Economy Demand Innovation Wealth Labour economics Capital (economics) Human capital Economic equilibrium Economic growth Government spending Tax Infrastructure Development economics Stock Culture Poverty Finance Human activities Investment Social network World Bank

Related SDGs

SDG 8: Decent Work and Economic Growth
SDG 8: Decent Work and Economic Growth

Target 8.2

Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Related COFOG Divisions

4: Economic Affairs 4.1: General Economic, Commercial, and Labour Affairs

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