PhD Programme in Economics
University of Pavia

Supervisors: Professor Giorgio Rampa (University of Genova),
Professor Pier Luigi Sacco (IUAV University of Venice)

February 2003

Abstract

This work explores the idea that economic growth and social development may, but need not work in the same direction. On one side, economic growth makes more and more resources available, that can be used both for individual and for social purposes; on the other side, it may be based on a substitution of private for social activities, that leads to social impoverishment. Conversely, a rich social environment may be good both for individual well-being and for long run growth, but it may also subtract resources to private growth-enhancing activities.

Where material needs have been satisfied to a substantial degree, as it is the case in advanced economies, well-being depends to an increasing extent upon social factors: it becomes a matter of building up a satisfactory individual and social identity. Since other social sciences have long debated the questions related to identity construction, Chapter 2 briefly reviews some of the main issues emerged in such debate and relates them to social development.

Within contemporary economics, two useful concepts to tackle similar questions are those of social capital and of relational goods. The notion of social capital refers to a form of capital that is encompassed in the social structure of a group, rather than in physical objects or in single human beings, like physical and human capital. Chapter 3 reviews the most relevant economic literature on social capital. The notion of relational goods refers, roughly speaking, to those goods that satisfy relational needs and are obtained through participation to some social activity. Chapter 4 discusses this notion, with particular emphasis on the substitutability between some private goods and relational goods, and on the contribution of social capital to the enjoyment of the latter ones. Moreover, it discusses how social participation may affect both enjoyment of relational goods and social capital accumulation, and thus contribute to social development. Since most relational goods do not enter in the GNP, to the extent that economic growth is based on a substitution of private for relational goods, it may lead to situations of social poverty, whose impact on well-being is not reflected in growth accounting.

The models presented in Chapters 5, 6 and 7 formally investigate this possible conflict between economic growth and social development, using both the tools of neoclassical growth models and of evolutionary game theory. In particular, they allow to discuss the conditions under which a growing economy may fall into ‘social poverty traps’.

Information on the author

Dr Paolo Vanin is Associate Professor at the University of Bologna, Department of Economics.

Related works

• 2006, Social Capital Accumulation and the Evolution of Social Participation (jointly with A. Antoci e P. L. Sacco), Journal of Socio-Economics, forthcoming.

• 2006, The Economics of Human Relationships (jointly with P. L. Sacco and S. Zamagni), in L.-A. Gerard-Varet, S-C. Kolm e J. Mercier Ythier (eds.), Handbook on the Economics of Giving, Reciprocity and Altruism, Amsterdam, Elsevier North Holland, forthcoming (preliminary version published on line in Social Science Research Network Electronic Library).

• 2005, On the Possible Conflict Between Economic Growth and Social Development (jointly with A. Antoci and P. L. Sacco), in B. Gui and R. Sugden (eds.), Economics and Social Interaction: Accounting for Interpersonal Relations, Cambridge University Press.

• 2005, Relational Goods, Private Consumption and Social Poverty Traps in an Evolutionary Game (jointly with A. Antoci and P. Russu), University of Bologna-Forlì, CLEONP-AICCON Working Paper N. 25/2005

• 2002, Il rischio dell’impoverimento sociale nelle economie avanzate (jointly with A. Antoci and P. L. Sacco), in P. L. Sacco, S. Zamagni (eds.), Complessità relazionale e comportamento economico. Materiali per un nuovo paradigma di razionalità, Bologna, Il Mulino.

• 2000, Network interaction with material and relational goods: an exploratory simulation (jointly with P. L. Sacco), Annals of Public and Cooperative Economics, 71:2, 229-259.