Social Capital Failure: Negative Externalities of Social Capital



Social capital can be expressed as private good in terms of micro perspective. At the same time social capital is public good and lead to free-rider problem in terms of macro perspective. On the other hand social groups can only use social capital in their own interests and they can create their own resources by excluding other groups. Therefore the lack of inclusive features of social capital lead to social capital failures. In this study, the exclusion effect of social capital and pressure-interest groups, criminal organizations, corruption and nepotism-chronyism are explained as social capital failure or negative externalities of social capital.

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