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Int. j. econ. manag. soc. sci., Vol(3), No (8), August, 2014. pp.

400-404

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International Journal of Economy, Management and Social Sciences


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ISSN:
2306-7276

Copyright 2014. All rights reserved for TI Journals.

Commons, Social Capital and Europe 2020


Dimitra Koumparou*
Management Organization Unit of Development Programmes, Athens, Greece.
*Corresponding author: dkoum@env.aegean.gr
Keywords

Abstract

Europe
2020 strategy
Smart specialization
commons
environment
social capital

The theory of the commons is very useful to understand how people decide to self-organize, to plan
and to exercise sustainable policies for natural resources. The theory of social capital refers to the
groups that form a society and how social nets are developed and affect policys outcome.
European Union seeks the antidote to the crisis through EUROPE 2020 policy focuses on region
with its own characteristics. It neglects that the assets of a region are not only economic, physical
or human, but also social. This paper argues that European policy should take into account for its
region and innovation growth the experience of how commons work, and the knowledge of how
social capital function.

1.

Introduction

Planet today faces very intense problems due to economic crisis that swept all over the world. West tries to find out the ways that lead to
the development, improving the prosperity of people. New prospective to known problems, emerge, after the trial and error in the past. A
high pool of experience from the past decades, in Europes policies, drives the new vision for Europe 2020.
In the past decades an interdisciplinary concept Social Capital has emerged and a width literature about its definition, its structure and its
function has been developed in social sciences. Its roots can be found in ancient Greek philosophy, but today researchers investigate it
intensively.
The management of common property resources or commons referred to the community, as a construction of individuals who use a
particular natural resource rather than to individuals themselves, as independent subjects. Management plans developed by self-organized
communities of users raised questions about the conditions of appearance and function of a group that contains the inherent ability to self
organize, to protect themselves and the resource. Institutions, as fundamental components of the social structure, define the limits of action
and initiatives of social aggregation in general and of each individual. The understanding of the social dynamics and their variables helps to
diagnose the social net that limit or enfranchise the processes of sustainability. The characteristics that scholars have identified in commons
are quite similar with those of social capital.
In this paper the discussion focuses on Europes strategy for the near future, where growth is the main concern. Furthermore it is very
interesting that European leaders use the term growth instead of development. European Strategy known as Europe 2020 in a very
simplified version tries to improve its citizens prosperity and to protect its natural resources, with citizens participation. The theory of
social capital and the theory of commons embody the peoples participation and the relationships that develop inner and outside the group
that citizens belong or create. There is a big discussion about the role of social capital in economic crisis and in the development process.

2.

Europe 2020 strategy

Today Europe faces one of the most dramatic economic challenges and simultaneously sets out its 2020 strategy. According to the
president of European Commission Mr Barroso the European Union has to work hard to overcome the crisis and to create the conditions for
a more competitive economy with higher employment. Everything must be done in different way than business as usual. Europe needs
to get back on track [1].
Europe has to see its own characteristics and strengths, weakness and opportunities in its structure, its dynamic to face new and old
challenges and problems like globalization, and pressures on natural resources. Europe tries to find its place in 2020 throw an upward path
of prosperity addressing its structural weakness in areas like research and innovation, employment rates , demographic ageing in a global
environment where the challenges are intensified (interlinked economies, financial markets, climate and resource challenges).
The goal is the growth with a strong and effective economic system which will be smart, through investments in education, research and
innovation; sustainable towards a low-carbon economy; and inclusive, creating jobs and achieving poverty reduction. The strategy is
focused on five ambitious goals in the areas of employment, innovation, education, poverty reduction and climate/energy. This is Europe
2020 Strategy [1].
Europe has launched seven flagship initiatives commit both the EU and the Member States and these are 1)innovation union 2)youth on
the move 3) a digital agenda for Europe 4) resource efficient Europe 5) an industrial policy for the globalisation era 6) an agenda for new
skills and jobs 7) European platform against poverty [1].
In Europe 2020 strategy paper, it is recognised that crisis has wiped out years of economic and social progress and exposed structural
weaknesses in Europe's economy (European Commission, 2012b). The European Union is transformed facing long-term challenges. With
a smart, sustainable and inclusive economy, Europe believes that will deliver high levels of employment, productivity and social cohesion.
It is believed that a close co-operation between national, regional and local government will bring the EUs priorities closer to people,
strengthening the feeling of ownership needed to get everyone involved in moving Europe towards the 2020 targets. In many EU countries,

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International Journal of Economy, Management and Social Sciences Vol(3), No (8), August, 2014.

the regional or local authorities are responsible for policy areas linked to the Europe 2020 strategy such as education and training,
entrepreneurship, labour market, infrastructure or energy efficiency. It is crucial that all levels of governance be aware of the need to
implement effectively the Europe 2020 strategy on the ground so as to achieve smart, inclusive and sustainable economic growth, and that
each plays its part in introducing the necessary changes. In Europes strategy the Committee of the Regions has set up a monitoring online
networking platform which gathers information on local and regional action in design and implementation of the Europe 2020 at local and
regional level. The committee of the Region has also been highly involved in Flagship Initiatives. It has been designed to monitor more
than 150 regions and cities for growth and jobs, exchanging good practices and contributing to the EU debate on Europe 2020 [2].
In this context every country-member has adopted its own national targets. All member states prepare a National Reform Programme. In
this document the member state sets its own targets and the ways or tools to achieve them. Social protection and inclusion, macro financial
stability, external equilibrium and competitiveness, labour market are the areas of expertise of the National Programmes.
It is well understood in Europe that the reconstructing of the economy requires long term planning and cooperation between Member
States, regions, cities, socio-economic partners and civil society.
Especially for the innovation and research, European Union developed and adopts the Smart Specialization Strategy. In this action plan
region is the key factor where technology and innovation highlights and supports its special characteristics, achieving economic growth.
If someone looks closely, the term region could be replaced by the term locality including economic, human and natural environment.
European policy refers to these three forms of capital.
European Union [3] recognizes fails in the past strategies and ascribes their failure, especially in the sector of innovation to the fact that:

They lack an international and trans-regional perspective, i.e. the regional innovation and economic system is often considered in
isolation.

They are not in tune with the industrial and economic fabric of the region.

There is too much public involvement in Research and Development which is not sufficiently business driven.

A sound analysis of the region's assets is missing.

There is a picking winner's syndrome.

The best performing regions are copied without consideration of the local context.
It is recognized that every region is different and we cannot apply a successful strategy or a plan of one region to another achieving the
same perfect outcomes. The copy-paste of policies is not a good practice. There is a factor that makes every region unique even if the other
parameters are similar, economy, natural resources, human capital and this is social capital. But the social capital is totally absent [4].
The above fact is similar for the failures in environment policy too. For example Hunka and de Groot [5] mention how Water Framework
Directive-WFD [6] was adopted by Poland the only role left to the concerned locals after consultations is the role of protester. According
to WFD [6] its success relied on close cooperation between the participants.
In this context and taking into account the subsidiarity principle, local solutions through involvement of locals and looking for more
transparent decision- making processes, local governments are a key-factor for European policy.

3.

What is Social Capital

The idea that social norms guide economic activities according to Woolcock [7] derives from Scottish enlightenment and especially
Edmund Burke who stated that markets cannot function without prior existence of norms and moral principles. Even Adam Smith in 1776
stated that while the man pursues its interests, simultaneously is hold by moral sense [7]. But the origin it can be found in Aristotle. Very
later in the works of Durkheim and Marx there are the roots of social capital [8]. Becker, Coleman, Putnam, Bourdieu gave the
contemporary use of term social capital.
For Coleman [9] social capital is a variety of different entities, with two elements in common: they all consist of some aspect of social
structures, and they facilitate certain actions of actors within the structure.
During the nineties, new explanations of economic development are the object of social sciences. A growing number of studies have
suggested that the process of growth is determined not only by economic factors, such as natural capital, physical capital and human
capital, but also by the economys social and institutional structure. In 1993, Robert Putnam [10] tried to explain the different institutional
and economic performance of the Italian regions as the result of the influence exerted by some aspects of the social structure, summarized
into the multidimensional concept of social capital. He analysed social capital emphasizing its function on macro level. He defined social
capital as the social elements social norms, social networks and trust which lead to collective action.
Woolcock [7] defines social capital as the information, trust and norms of reciprocity inhering in ones social networks and Fukuyama [11]
states that it is an instantiated informal norm that promotes cooperation between two or more individuals.
For Bourdie and Coleman social capital is the core of the microsociological approach of social networks and action. They supported that
social capital refers to the relationships among individuals and like other capitals is a factor of production [12]. Coleman refers to vertical
and horizontal associations and includes a variety of entities like firms [13].
Putnam and Fukoyama use the concept of social capital in a macro way for the study of social structure and culture and for the
understanding of social action. According to them, social capital has an individual aspect - achieving personal goals but it has also a
social prospective. It can generate positive effects on the whole society. In this way it can be accumulated and be property of countries or
regions [12]. Under an economic prospective Putnams concept is narrow as its core is the coordination and the cooperation for mutual
benefit of an association [13]. For others like Paxton [14] social capital can be analysed in multiple levels.
The World Bank [13] studied the link between social relations and economic development. In the working paper entitled Social Capital:
The Missing Link trying to measure the social capital and to determine empirically its contribution to economic growth and development.
Its perspective is that social capital is the link that holds societies together and without it there cannot be a growth and well-being. It was a
trial to understand how the social capital impacts on development and especially on growth, equity and poverty alleviation. Using four
case-studies of all over the world, traces the way that social capital affect economic outcome. According to this paper, information is the
key factor for poverty alleviation and it is argued that in capital markets the information problems are severe. Insufficient or incorrect
information leads economic agents to false decisions. Uncoordinated or opportunistic behaviour also leads to market failure. The frequent
interaction among individuals of an association or a group enhances trust and reciprocity and the untrustworthy behaviour has severe

Dimitra Koumparou *

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International Journal of Economy, Management and Social Sciences Vol(3), No (8), August, 2014.

consequences (psychological, social). Collective decision making is a necessary condition for market success for the provision of public
goods and the management of externalities. Here locality is the key factor and it affects efficiency and equity [4].
OECD [15] defines social capital as networks together with shared norms, values and understandings that facilitate cooperation with or
among people.
Grootaert and Van Bastelaer [16] stated that social capital has a profound impact in many different areas of human life and development: it
affects the provision of services, in both urban and rural areas; transforms the prospects for agricultural development; influences the
expansion of private enterprises; improves the management of common resources; helps improve education; can contribute to recovery
from conflict; and can help compensate for a deficient state.
Social capital is critical for poverty alleviation and sustainable human and economic development for Dolfsma and Dannreuther [17].
Nahapiet and Ghoshal [18] distinguish three dimensions of the social capital: structural, cognitive and relational. The first has to do with
the common values, experiences and codes, including language. The second refers to persons commitment and dedication the confidence
and the obligation and of course includes norms. The last refers to kinds of relationships and to the way that the group is organized, their
common interest, and their willingness to share knowledge.
In the literature about social capital another theme for the role of the social capital has been extensively discussed extensively. It is also
important to bear in mind the difference between bonding and bridging social capital. Bonding social capital takes place inner the group.
Bonding is an inward looking in the group, the relationships between the members of the group. Bridging refers to networks in the group
that have outwards looking. Bonding social capital is a necessary antecedent for the development of the more powerful form of bridging
social capital [19].
The term and the use of social capital are commonly accepted, but there is a flourish literature for what is social capital exactly. Social
capital is a multi-dimensioned phenomenon and a multi dimensioned tool for its measurement should be developed, taking into account a
large number of indicators [12].
It can be argued that social capital is a very wide term that consists of a net of relationships, cultural constructions, institutions (formal and
informal), norms (including trust and reciprocity), internalization of values, civism, information, law and metanorms. It is a concept which
can be transformed into a policy tool.

4.

The social capital and the commons

In 1992 in the United Nations Conference on Environment and Development (UNCED) the term sustainability introduced and today is
worldwide accepted as the only way to development. All these years sustainability is our concern and many problems in global and local
level must be addressed sustainable.
Furthermore, the last decade, a criticism against the tripartite description of sustainable development was raised about the significance and
the priority given to each pillar and the bonds between the pillars.
The social dimension of sustainable development should be stopped to be considered as the weakest pillar. Until recently the environment
matter was the main concern of sustainability trying to convert environment to economy matter bearing in mind that the market prices
of natural resources must reflect the full environmental costs and benefits of economic activity [20].
Less attention was paid to social dimensions of the environment. Another model, the bio-economy model, replaces the three pillars by three
concentric circles, the environment circumscribing the social dimension, and the economic sphere constituting the innermost circle. In this
case economic activities meet human needs while at the same time protects the environmental systems necessary for human existence. The
social defines the economic activities, but at the same time confined by environmental limitations [8].
The interaction among natural resources and society is an issue that has been extensively analysed. Hardin [21], [22], [23] with the tragedy
of the commons refers to a set of problems that people face and have to do with the use of the resources which are not amenable to
technological solution. People harm natural resources and the likelihood this damage to be greater is for a certain category of resources, the
common pool resources or commons like forest, water, wildlife, grazing land, fisheries etc. The solution that Hardin suggests is mutual
coercion, mutually agreed upon.
The tragedy of the commons used to describe various problems such as overpopulation, environmental degradation, destruction of
resources - including poverty, crime, relationships private-public sector in modern economies, even the problem of Cyprus - due to absolute
individual freedom [24].
The tragedy of the commons according to Ostrom [24], [25] is a sophisticated presentation of the problem of mutual cooperation. It
describes the advantages of short-term selfishness, in contrast to the need for long-term cooperation.
Ostroms work [24], [25], [26], [27] reveals that societies have developed diverse institutional arrangements for the management of these
natural resources and avoided destruction in many cases. Ostrom and her scholarship emphasized how societies interact with natural
resources in order to maintain long-term sustainable resources, designing eight principles. For stable common pool resources she also
highlights the role of effective communication, internal trust, reciprocity and the nature of the resource system [28].
In the theory of commons, one of the elements that determine the success or failure of local strategy is to what extent encourages
continuous communication between users on the conditions inherent in that natural and social environment. The norm of cooperation, and
also the meta-norm contributes to the successful sustainable management plans of sustainability. These plans contribute to social cohesion
too. The reciprocity inherent in collective action is the element that ensures joint agreements. The role of norms is particularly important, as
they maintain the cohesion of the society and protect them from behaviours that threaten the reciprocity [28].
In the cases where collective management of the natural resources is successful, norms, trust and networks are embedded. Reciprocity is the
fourth component of the social capital and ii is very important in function of commons. Norms and networks are widely embedded, with
trust being seen either as an additional element of social capital or a close proxy for the level of social capital present in a community.
Ostrom argues that the management decision should be made as close to the natural resource and its appropriators, in order to achieve a
stable sustainable and coherent development [28].
According to Willis [29] the principles of community management has become a central metaphor for ecological policy and the scientific
findings can show the way that organisations and administrative structures work with community initiatives.
Pretty and Ward [30] argue that everywhere in both developing and developed world environmental policy and its exercise is addressed to
individuals and not to groups or even more to localities or communities.

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International Journal of Economy, Management and Social Sciences Vol(3), No (8), August, 2014.

The theory of commons where locals create communities is the matrix where the characteristics of social capital can easily be detected
and to be understood how it works, achieving the excellence, the sustainability, with the three pillars equal developed. The research on
common-pool resource embedded the study of social capital. It was the first attempt to find out how groups-communities and no
individuals interact with the environment in a perfect way. The study of Commons brings to light examples of social behaviour on
environment.
The creation of an organization and the development of cooperative strategies for the use of a common pool resource, they do not guarantee
that this organization will survive over time. Many efforts to reach cooperation strategic fail after a few years. The original conception of
the nature of the problem, the alternatives for cooperation, the possibility of mutual trust, the communication between members,
transformed over time. Persons following the rules of common property interact with the others and the natural resource and they decide if
they transform their organisation in order to adapt better to specific environmental conditions. Adaptation to a new situation is a difficult
process, and often a foreign intervention, is necessary. However, this should be done in a way that it will not alter the basic characteristics
of the community and also will enforce those action plans that have worked effectively already targeting sustainable use of resources.
Pretty and Ward [30] underlines the role of external agencies or individuals who can act or work both with individuals to increase their
knowledge and skills, their leadership capacity and their motivation to create new local associations with the right rules and norms.
In the story of commons there are many examples throughout the word where societies develop diverse institutional arrangements for
managing natural resources. Community or common property found in several industrial countries: Spain, Ireland, Swede, Norway, USA,
etc. What distinguishes them is the unique identity of each community and the way to address the challenges without jeopardizing the
function of the resource [28].

5.

Conclusion

In an era of growing uncertainty, European Union launched its development strategy, known as Europe 2020 that indicates the European
position in the global system by year 2020.
This policy has a holistic approach and tries to resolve the problems that have been caused by the recent economic crisis, promising
prosperity of citizens, protection of the environment and the economic booming through innovation and science.
Having reviewed and studied carefully the causes of failure in its past strategies, the new European Union development strategy and in
particular that for innovation and research, known as Smart Specialization Strategy, puts emphasis on economic growth through
technology and innovation, which highlight and support the special characteristics of each region. The term region could be replaced by
the term locality and includes the economic, human and natural environment.
The economic growth, the target of Europe, involves economic, physical, human but ignores social capital. The concept of human capital
refers the stock of competencies, knowledge, attributes embodied in the ability to perform labour to produce economic value.
Social capital enhances the benefits of the investments. In that case, social capital is not just an input into the production function, but also
a shift factor like technology [13]. At the same time is also a product, of this, like human capital. But the difference between them is that
human capital refers to individuals. It does not take into account what individuals do as a group. Social capital refers to groups, and their
cooperative networks that have been developed [13].
Especially Smart Specialization Strategy follows the 'place based approach' that has been promoted by both the European Commission [3]
and the OECD [30], [31].
Given the variables of the economic and institutional context between and within European regions Smart Specialization should be applied
with caution. This will be done through consideration of the four following points [3]:
1. The entrepreneurial process of discovery will work differently in every region. It will be easier for regions with high density of
innovators or entrepreneurs.
2. Identifying sectors that can achieve critical mass should take into account the principles of regional embeddedness and
relatedness. This allows firms to build on available skills.
3. Connectivity: the link emerging knowledge based industries to other actors within and outside the region.
4. Integration of policies at regional level. A strategy to increase the attractiveness of a place for investors has to take into account
social, cultural and legal issues in addition to purely economic considerations.
It is recognized that every region is different and therefore a successful strategy or a plan in one region cannot be applied to another
achieving the same level of outcomes. The simple transfer of policies is not a good practice as social capital is a factor that makes every
region unique even if all other parameters, such as the economy, the natural resources, and the human capital are similar.
In addition, the existence of trust relations between the government and the public affects the policy implementation. The social capital
represents the potential link between policy thinking and regional action.
In era of great uncertainty and great changes, like this time in Europe, it is very crucial for people to adapt innovation, technology and new
practices. An important question is in what way introduced policies affect the social capital and how it can be accumulated to enhance such
innovation. Social capital is endured when reciprocity increases the networks between people and their relationships leading to greater trust,
confidence and capacity to innovate.
It seems that social capital is a neglected link of the 2020 strategy. Pretty and Ward (2002) state that vicious circle of policy failure is
triggered when local external connections are not two-way, and because in many regions of Europe trusty relationships are not
established. Social capital relates to the social norms, networks and trust. It can generate benefits to society by reducing transaction costs,
promoting cooperative behaviour, diffusing knowledge and innovations, and through enhancements to personal well-being and associated
spill-over [32].
European Union seeks the antidote to the crisis, without taking into account the whole image of sustainable development. The third pillar or
the second circle is neglected just like in the past. Policy focuses mainly on individuals. But the local context includes also natural
resources, economy, humans and society.
The common management practices that rely on cooperation and reciprocity involve individuals or groups condemn and remove
competition and intense individualism. The element that largely determines the success or failure of these management plans is to what
extent the institutions encourage constant communication between users about the conditions inherent in that natural and social
environment. The relationships developed within an organization define the situation of the natural resource, but also identify interesting

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International Journal of Economy, Management and Social Sciences Vol(3), No (8), August, 2014.

qualities of social life. The lessons from the commons and the theory of social capital will be very helpful in the implementation of
European policy for sustainable development and economic growth. The unique asset of each region is not only the natural economic and
human capital but also the networks, the relationships which the people of each region develop among themselves and the externalities, like
governments, NGOs etc.
The political and economic rapid overthrows shift the academic literature to pay more attention to the role of social capital in the
development process. Also the European experience where the same strategies have different impacts in the members-states and the
changes in some of them is unexpectedly slow, provoke to investigate the role of social capital, and to take it into account in policies
exercise. Europe 2020 Strategy seems that it has neglected the role of social capital, although it is implied and as Mehrabanfar and Maneshi
[33] mention when a crisis is present there is a need to keep social capital.

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