Social capital, civil society and development

Social capital is an instantiated informal norm that promotes co-operation between individuals. In the economic sphere it reduces transaction costs and in the political sphere it promotes the kind of associational life which is necessary for the success of limited government and modern democracy. While it often arises from iterated Prisoner's Dilemma games, it also is a byproduct of religion, tradition, shared historical experience and other types of cultural norms. Thus, while awareness of social capital is often critical for understanding development, it is difficult to generate through public policy.