A New Proxy of Social Capital and the Economic Performance across the Italian Regions

In the last 20 years, social capital, has been evoked in several field of social science research and used to explain a vast range of phenomena: political participation, institution performance, corruption, economic success of countries and so on. Unfortunately, dealing with social capital at a scientific level presents, at least, three main problems. First social capital’s definition is still elusive, especially due to its multi-dimensional nature. Second, it is a particular form of capital related to a very high level of intangibility. Finally, because of lack of suitable data there is neither a universal measurement method, nor a single underlined indicator commonly accepted by the literature. These are some of the reasons for which social capital measures are considered as proxies. By using the density of workers within industrial districts, we have constructed an alternative proxy to those that already exist in the literature in order to empirically analyse the difference, in terms of economic performance, across the Italian regions. The methodology we have applied to derive the index is identical to that one used to construct the Putnam’s instrument. Empirical evidence shows that our measure does not affect macroeconomic indicators such as investment and income per capita. However, it significantly influences unemployment disparities, and the level of innovation.