Paper No.

006 July 2008

Social Institutions and Human

Development

Roberto Foa
Summary Findings

For almost two decades, development theorists and practitioners have drawn attention to the
importance of social institutions or ‘social capital’ as a means of enhancing human capabilities
and freedoms. However, empirical testing has been inhibited by the absence of cross-country
measures. Drawing on a set of 25 data sources, this paper attempts to provide the first worldwide
indices of social institutions, understood as the informal norms that pattern human interaction.
Six indices are presented corresponding to the following dimensions: (1) inclusion of minorities,
(2) gender equity, (3) intergroup cohesion, (4) clubs and associations, (5) interpersonal safety and
trust and (6) civic activism. In accordance with a growing literature on the links from institutions
to development outcomes, this article provides empirical evidence of the relationship between
social institutions, such as social inclusion and norms of non-discrimination, and human
development outcomes such as equal access to health, fair government, and a better income.
SOCIAL DEVELOPMENT WORKING PAPERS
Paper No. 006 July 2008

Social Institutions and Human

Development

Roberto Foa
This Working Papers Series disseminates the findings of work in progress to
encourage discussion and exchange of ideas social development issues. The papers
carry the names of the authors and should be cited accordingly. The series is edited
by the Community Driven Development team in the Social Development Department
of the Sustainable Development Network of the World Bank.

This paper has not undergone the review accorded to official World Bank
publications. The findings, interpretations and conclusions herein are those of the
author(s) and do not necessarily reflect the views of the International Bank for
Reconstruction and Development/ World Bank and its affiliated organizations, or its
Executive Directors, or the governments they represent.

To request copies of the paper or for more information on the series, please contact
the Social Development Department

Social Development
The World Bank
1818 H Street, NW
Washington, DC 20433

Fax: 202-522-3247
E-mail: socialdevelopment@worldbank.org
Printed on Recycled Paper
Table of Contents

Table of Contents ........................................................................................................................................................ i

Foreword..................................................................................................................................................................... ii
I. Forms of Social Institution .................................................................................................................................4
Data Sources ........................................................................................................................................................7
Methodology .....................................................................................................................................................12
II. Results................................................................................................................................................................13
Social Institutions and Economic Growth .....................................................................................................16
III. Conclusion .......................................................................................................................................................22
References ..................................................................................................................................................................23
Appendices ................................................................................................................................................................26
Sources Used .........................................................................................................................................................28

i
Foreword

In recent decades, there has been a steady current of country-specific studies examining the effects of
social institutions - the informal norms that pattern human interaction - upon economic and political
outcomes. However, despite the positive results found in successive regional and local studies, there
have been relatively few attempts to test the impact of social institutions at the international, cross-
country comparative level. This paper draws upon the initial results of a method for combining indicators
from multiple sources, in order to generate better aggregate measures of social institutions, and maximize
efficient use of data in country-comparative testing. By generating composite indices it is possible to
estimate scores for a much wider number of countries than otherwise possible, and the indices used in
this paper provide social institutional estimates for 192 societies, a far greater number than previously the
case. The utility of the new measures is then demonstrated by conducting several empirical tests which
highlight the links from social attributes, such as a healthy civil society or cohesive relations between
ethnic groups, and development outcomes, including good governance and economic growth.

In section I of this paper, the empirical basis of the new measures is outlined. Section II discusses the
results with reference to emergent issues in the institutional literature, including the deep determinants of
good governance and economic growth. Finally, section III concludes with a look toward areas of
research that in future can be addressed using social institutional data, such as that presented here.

ii
Measuring Social Institutions

In recent decades, there has been a steady current of country-specific studies examining the
effects of social institutions - the informal norms that pattern human interaction - upon economic
and political outcomes. Among the myriad issues that have been addressed within the ‘social
capital’ literature, notable examples include the finding by political scientists that countries and
regions with greater associational life, trust and inter-group cohesion tend to have better public
service delivery, financial accountability, and adherence to democratic norms (Putnam et al. 1993,
Knack 2002, Coffe and Geys 2005); the finding by psychologists that engagement in community
activities has a significant association with measures of health and educational attainment
(Berkman and Syme 1979, Coleman 1988, Helliwell 2003); and the finding by economists of a
robust association between social institutions and economic wellbeing in the form of both
household income and aggregate economic growth (Knack and Keefer 1997, Zak and Knack 2001,
Narayan and Pritchett 1999, Grootaert 2001, Tabellini 2005, Knowles and Weatherston 2007).

However, despite the positive results found in successive regional and local studies, there have
been relatively few attempts to test the impact of social institutions at the international, cross-
country comparative level. Few reliable, globally representative data sources exist that would
serve as a basis for comparing social norms and practices, while survey data for social trust and
community engagement are often fragmented across disparate regional samples. Commonly
used proxy and instrumental variables, such as ethnic fractionalization or the proportion
belonging to a hierarchical religious tradition, may be only weakly reliable or valid as measures
of social institutions, whereas direct behavioral items taken from representative national surveys,
such as social trust or civic norms, often cover only a limited sample of countries.

In order to advance systematic cross-country investigation of the effects of social institutions, this
article presents the initial results of a method for combining indicators from multiple sources, in
order to generate better aggregate measures of social institutions, and maximize efficient use of
data in country-comparative testing. By generating composite indices it is possible to estimate
scores for a much wider number of countries than otherwise possible, and minimize the level of
error in the estimates as the addition of successive indicators reduces random variation. The
indices presented in this paper provide social institutional estimates for 192 societies, a far greater

3
number than previously the case, and are reported together with margins of error, reporting the
level of confidence in a particular country score.

I. FORMS OF SOCIAL INSTITUTION

In order to organize our data collection, it has been necessary to adopt a working definition of
social institutions. Following North (1990), these are defined as the informal norms and
conventions that pattern social behavior, ‘the rules of the game in a society [or] the humanly
devised constraints that shape human interaction’. Whereas formal institutions are rules enforced
by third-party mechanisms, such as a police corps, judiciary, or constitutional council, social
institutions generally rely upon tacit norms and expectations. Examples of informal institutions
include the practice of signing petitions to protest a policy, joining a neighborhood watch group,
or willingness to do business with a member of a different ethnic group. These can be
distinguished from formal institutions, examples of which include the requirement to put
constitutional amendments to referendum, the power of judicial review, or the existence of legal
sanctions against infringement of intellectual property rights.

Our definition of informal institutions clearly encompasses a wide range of human customs and
practices, and therefore from among the universe of total possible institutions, we introduce a
second term, social development, to highlight those which, theoretically and empirically, are
conducive to welfare gains by reducing transaction costs, facilitating collective action, and
improving allocative efficiency1. Subsets of the social development indicators are grouped into
six dimensions of social development.

First, inclusion of minorities measures levels of discrimination against vulnerable groups such as
indigenous peoples, migrants, refugees, or lower caste groups. Such discrimination is a
significant ‘hidden barrier’ to equality of opportunity in society and in economic life, both
through its direct effects on access to jobs and services, and its indirect effects via unequal access

1Transaction costs are the costs incurred in making economic exchanges, and can be reduced through the social
institutions of cooperation and trust between diverse members of society. Collective action is the pursuit of a goal by
more than one person, and is enhanced by social institutions of community participation and civic engagement with the
political authorities. Allocative efficiency is the condition under which resources are allocated such as to maximize the net
benefit attained through their use, and is enhanced by the social institutions of non-discrimination in the access to social
and economic opportunities, without prejudice due to religion, ethnicity, caste, or gender. While the term ‘social capital’ -
understood as the norms and networks that enable collective action (Woolcock and Narayan 2000) - is frequently used to
refer to the first and second of these areas, in this paper we apply the term ‘social institution’ as a means of focusing on
specific norms and rules of behavior (rather than a configuration of beneficial attributes), and ‘social development’ as an
openly normative term which refers to the aggregate of desirable such institutions.

4
to the resources that enable future economic and social advancement. For example, theories
seeking to explain the significant association between certain measures of ethnic fractionalization
and the universality of public services (e.g. Alesina et al. 1999, 2003, La Porta et al. 1997) have
often cited group-based discrimination as the cause, with clientelism the intermediary institution.
Where the electoral incentive for universal public goods provision is low, as in many ethnically
diverse societies, politicians mobilize support through selective incentives such as public sector
jobs or local infrastructure at targeted groups (Robinson and Verdier 2002). Evidence suggests
that the relationships between identity groups in a society have important secondary
consequences for the level of allocative efficiency in an economy, as norms of arbitrary
discrimination may lead to sub-optimal resource allocation. Easterly and Levine (1997), for
example, find per capita GDP growth inversely related to ethnic fractionalization in a large
sample of countries; these findings are also reported by Alesina et al. (2003).

Second, gender equity specifically estimates the level of discrimination against women. The
treatment of women is measured in a separate index, first, because the treatment of women
depends upon a different set of social institutions to those that pattern social stratification
between identity groups; and second, because of the special role women play within
development as mothers and as heads of household. Empirical evidence shows that increases in
female education improve human development outcomes such as child survival, health and
schooling; the impacts on these outcomes are larger for a given increase in women’s education
than for an equal increase in men’s education (World Bank 2001, Schultz 2002, Thomas et al. 1991,
King and Hill, 1993). In addition to the role of gender equity in poverty reduction, gender
empowerment matters for economic growth, as such norms are allocatively suboptimal, and
empirical research also suggests an independent effect of gender equity upon individual and
aggregate economic outcomes (Schultz, 2002, Esteve-Volart, 2004, Morrison et al. 2007).

Third, civic activism measures the extent to which social practices encourage more active and
critical engagement with political authorities. Whereas clubs and associations is focused on the
institutions which facilitate collective action for the purpose of providing local public goods, civic
activism focuses on the institutions that facilitate the emergence of what Norris (1999) calls
‘critical citizens’, that is political subjects able and willing to articulate and represent their
interests before government. Such practices include but are not limited to engagement in debate
and reflection over public policy in the media, and the practice of actively representing citizen
interests through contacting public officials and protesting unpopular policies. In a range of
empirical tests, Paxton (2002) finds that participative governance is facilitated not by membership

5
of associations in general, but only of those that are ‘nonlocal, internally democratic, and have
links to global democratic norms’ (2002: 271), while Inglehart and Welzel (2005) identify civic
affirmativeness as the most important social precondition for shifts to more accountable
governance, using an index of ‘self-expression’ values which includes signing of petitions and
willingness to attend of demonstrations. The implication is that civil society matters for
accountable governance, not through enabling collective action, but rather by fostering norms of
active and critical citizenship.

Fourth, clubs and associations uses data on levels of engagement in local voluntary associations,
time spent socializing in community groups, and membership of developmental organizations, to
gain a measure of the range and the strength of ‘strong’ social ties, that is, ties with persons who
are known to the individual. The strength of such an associative life is central to what Woolcock
and Narayan (2000) term the ‘communitarian’ understanding of social capital, according to which
central elements are ‘such local organizations as clubs, associations, and civic groups’. This
approach to social capital is most widely associated with the works of Robert Putnam (2000) and
Amitai Etzioni (1997), whose studies have examined the health, and perhaps decline, in
associative life in western democracies. In terms of the collective action that they facilitate, across
the world community networks are essential for welfare and service delivery, and in the context
of economic development, matter hugely for the theory and practice of microfinance, as well as
the disbursement of local level funds, such as the Community Driven Development project of the
World Bank (Guggenheim 2006).

Fifth, inter-group cohesion specifically measures the extent of routinized conflict between ethnic,
religious, or other social identity groups. The persistence of acts of inter-group violence,
including reprisals, terrorism, and inter-group violence has the effect of increasing transaction
costs, but unlike generalized social trust, it is specifically directed at defined identity groups.
Empirical research has shown the phenomenon of inter-group cohesion to have specific links to
the themes of public service delivery and political stability. In addition, conflict is among the
principle causes of low economic growth among the very least-developed countries (Collier
1999).

Sixth, interpersonal safety and trust measures the level of generalized trust and confidence
between individuals, specifically with regard to the likelihood of criminal violence and other
forms of trustworthiness or trust violation. Generalized social trust is one of the most widespread
ways in which ‘social capital’ has been defined and studied (Fukuyama 1995, Arrow 1974, Knack

6
and Keefer 1997), and among its benefits is a substantial reduction in transaction costs. As
Fukuyama (1995) argues, where ‘people who have to work together in an enterprise trust one
another because they are all operating according to a common set of ethical norms, doing
business costs less’. Empirical studies have also shown generalized social trust to be a predictor
of future rates of economic growth, as would be expected if its effect is to facilitate positive-sum
exchange (Knack and Keefer 1997).

Data Sources

To create estimates of the above six types of social institutions, the social development indices
have compiled over 200 measures from 25 sources, including international organizations,
comparative survey projects, rating agencies, and academic assessments2. The sources produce
indicators for a wide range of concepts relating to social institutions, using different techniques,
and covering different groups of countries. In general, however, the data sources are divided into
two categories, reflecting the different methods via which the measures were generated.

Firstly indicators are divided between actionable indicators, which are based on direct
measurement of social institutions and their outcomes, and perception-based indicators, based on
assessments by public opinion surveys, private agencies and non-governmental organizations, of
the nature of social institutions in that country (see Table 1.0). Actionable indicators are generally
preferable to perception-based indicators, in that they are more responsive to changes in
underlying social conditions, and cannot be influenced by changes in perception independent of
substantive social change. However, because some norms and practices are difficult to measure
directly, perceptions measures are sometimes needed to supplement these data. Perceptions are
also useful to study in their own right, as they may constitute causal factors that maintain or
erode certain social institutions, for example those of discrimination or social trust.

2 A summary is provided in Appendix I.

7
Table 1. Types of Social Institutional Indicators

Actionable Perception-based

Proxy variables Behavioral Public opinion Expert assessment

"Here is a list of actions

that people sometimes
take as citizens. For each
“How much
Membership of of these, please tell me
confidence do you Civicus ratings on
international NGOs, whether you, personally,
Civic Activism have in civil society effectiveness of civil
per capita access to have done any of these
organizations in society organizations
radios things during the past
your country?”
year.” - Attended a
demonstration or protest
march

"Now I am going to read

out a list of groups that
people join or attend. For
“Would you say that,
each one, could you tell
in your
Clubs and me whether you are an
- neighbourhood, -
Associations active member, an
people generally
inactive member, or not a
help one another?”
member?" -
Development
associations

International Country
Number of “How much of a
Intergroup Risk Guide rating on
newspaper-reported - problem is ethnic
Cohesion levels of ethnic or
ethnic riots violence in society?”
religious tensions

“Generally speaking,
“Over the past five years would you say that
has anyone taken most people can be Economist Intelligence
Interpersonal Deaths from
something from you, by trusted or that your Unit rating on ‘level of
Safety and Trust homicide
using force, or can't be too careful in social mistrust’
threatening you?” dealing with
people?”
"On this list are various
Ratio of minority groups of people. Could
“Is your ethnic Minorities at Risk
groups in you please sort out any
Inclusion of group ever treated rating on level of
professional that you would not have
Minorities unfairly: i) when economic
occupations relative as neighbors?" - those of
looking for a job” discrimination
to population another ethnicity, those
of another religion

8
 Proportion of
Ratio of female to Proportion of wives
women who feel that
male mortality reporting having Cingranelli-Richard
“women have the
Gender Equity rates, ratio of female suffered an act of rating on women’s
chance to earn the
to male school domestic violence in the social rights
same salary as men
enrolment rates past year
in their country”

We can then subdivide within each category, depending on the means via which the data are
generated. Actionable indicators are either proxy variables based upon the measurable outcome
of social institutions, or information on reported social behavior taken from nationally
representative surveys. Proxy variables in our dataset are those typically used in studies of social
capital, such as per capita newspaper circulation, the density of international non-governmental
organizations, or the reported number of ethnic or other violent street riots. The use of proxy
variables such as newspaper circulation depend upon reasonable inferences regarding the causes
and consequences of social action, such as the assumption that greater newspaper readership
reflects greater citizen propensity to engage in civic activism, or that violent riots reflect the
breakdown of cohesion among social groups. The validity of these inferences is confirmed by the
often high degree of correlation between each of these measures and other indicators of social
institutional structure. Behavioral items taken from comparative, nationally representative
survey projects include responses to questions such as the signing of petitions, domestic violence,
or membership of voluntary associations. Key sources include the World Values Survey, founded
in 1981, which currently provides comparative measures such as social trust, tolerance of
minorities, and voluntary associational membership for almost 90 societies around the world, as
well as regional survey projects, such as Latinobarometer, founded in 1996, Afrobarometer,
founded in 1999, and Asian Barometer, founded in 2003, which cover a joint total of 49 societies.

Perceptions-based measures can likewise be divided into two categories, depending upon the
nature of the underlying data source. The first form of perception-based data come from the
nationally representative public opinion surveys just mentioned, and include responses to those
questions which ask the respondent to give their opinion on some issue, such as their level of
confidence citizens feel in their civil society organizations, the level of discrimination women or
minorities feel they encounter in their daily lives, or the trust people have in their fellow citizens.
While ‘softer’ than survey questions on actual behavior, these items allow researchers to tap into
a range of additional issue areas where harder data may be lacking. The second category consists

9
in numerical ratings produced from expert assessments, in which academics, non-governmental
organizations, and private rating agencies assess the nature of social institutions across countries.
Such assessments have become more widespread in recent years, as researchers have sought to
make social institutions visible to quantitative analysis. The Minorities at Risk project, for example,
was started in 1986 and has been updated over three successive waves, providing comparative
measures of discrimination and exclusion of minority groups in 118 societies across the world.
The International Country Risk Guide has since 1980 provided assessments of a range of social
variables, in addition to purely political and economic factors, such as the level of ethnic or
religious tensions. Meanwhile, since 2003 the Civicus civil society network has been developing a
range of indices for the health of civil society. These efforts to code descriptive assessments of the
quality or otherwise of social institutions into numerical form open up a further rich source of
information for researchers wishing to comparatively assess the social environment of different
countries.

Table 2 below summarizes the relative prevalence of each of these data categories in the database
of social development indicators. Shown are the proportion of country-year data points in each
category. Overall, actionable proxy variables account for half of the data used, with survey data
on social actions and behavior forming an additional quarter. The remaining quarter of data
points are split between perceptions-based indicators derived from public opinion surveys and
expert assessments.

Table 2. Proportion of Data Points in Each of the Indices, by Type

Actionable Perception-based

Proxy variables Behavioral Public opinion Expert assessment

Civic Activism 0.71 0.24 0.00 0.05

Clubs and Associations 0.00 0.79 0.21 0.00
Intergroup Cohesion 0.34 0.13 0.02 0.51
Safety and Trust 0.37 0.12 0.21 0.22
Inclusion of Minorities 0.00 0.21 0.09 0.70
Gender Equity 0.75 0.07 0.04 0.15

AVERAGE 0.36 0.26 0.10 0.27

10
Not all sources provide observations for every indicator in each country, but together, these data
sources allow for comprehensive estimates of the nature of social behavior and norms of
interaction across a broad range of societies Thus:

1) For the civic activism measure, a score for Bolivia in 2005 is estimated using 9 pieces of
information from 4 different sources: the LSE Civil Society Yearbook figures for the number of
International NGO secretariats based in that country (9) and connections to international NGOs
(1216); Latinobarometer survey items for participation in petitions (48%), lawful demonstrations
(45%), and the average number of days in the week that a respondent follows current affairs via
television (4.78/7), newspapers (2.27/7), and radio (4.73/7); UNESCO data on the number of
daily newspaper titles, per capita (2.13); and a Civicus Civil Society assessment rating the quality
of civil institutions with regard to their structure, environment, values, and effectiveness (1.65/4).
These data are aggregated by source and combined using the matching percentiles method, to
generate a composite score of 0.538 for Bolivia. This score is roughly in the middle of the world
distribution, and within Latin America and the Caribbean, falls roughly halfway between Peru
(0.548) and Ecuador (0.510)3.

2) For the inclusion of minorities measure, a score for South Africa is estimated using 11 pieces of
information: the Fund for Peace rating on the extent of uneven economic development based on
group lines (8.5/10, 2005); the proportion of the population who say that their ethnic group is
treated 'the same' as other groups (39%, 2004); the proportion of the population that say their
ethnic group has the same political position as other groups (40%, 2004); the proportion who say
that their ethnic group is 'never' treated unfairly (40%, 2004); relative income disparities and level
of economic discrimination regarding Asians, Black Africans, "Coloreds", Europeans, Xhosa, and
Zulus as estimated by Minorities at Risk (2003); the proportion of the population who trust those
of another ethnic group 'not at all' or 'just somewhat' (57%, 2004), the proportion of the
population who would refuse to have someone of a different race as a neighbor (20%, 2002); the
proportion of the population who would refuse someone with AIDS as a neighbor (25%, 2002);
the proportion refusing immigrants or foreign workers as neighbors (25%, 2002); and the
proportion refusing homosexuals as neighbors (43%, 2002). These items are first aggregated by
each of 4 sources - the Fund for Peace, Afrobarometer, Minorities at Risk, and the World Values
Survey - and combined using the matching percentiles method, to generate a composite score for
South Africa, of 0.31. This is substantially below other Anglophone countries such as the United

3For further reference, the high and the low scores within Latin America and the Caribbean are held by the Bahamas
(0.630), and Haiti (0.267), respectively.

11
States (0.51) or New Zealand (0.61), but slightly above the global median, and within a similar
margin of error to countries such as Kenya, Latvia, and Malaysia.

Methodology

The method used to combine the indicators is a latent variables approach, as adopted in the
generation of the Worldwide Governance Indicators and Transparency International’s
Corruptions Perceptions Index (Kaufmann, Kraay, and Zoido-Lobatόn 1999a, 2006; Lambsdorff
2006). The intuition behind this procedure is that each of a set of indicators represents some latent
value of the underlying phenomenon in each society, but on differing scales, with differing
country samples, and with varying degrees of measurement error. Assuming that errors are
uncorrelated across sources, indicators can be combined to reduce the aggregate level of error,
with the rankings of countries according to each indicator used to consecutively reassign scores
across cases.

The method assumes that for each of the 6 dimensions of social development there is some latent
value (Li) representing the objective level of that dimension in country i. Each of the available
indicators yi represents, on a different functional transformation (f) and with varying degrees of
measurement error εi, level Li such that:

(yi) = f (Li ) + εi

Because we are unable to estimate the functional form f, the aggregation methodology is
nonparametric, with no assumptions regarding the linearity or otherwise of the distribution of
the values in y. We merely assume that the relative position of countries on y reflects a better or
worse underlying condition with respect to L. The ranks of successive indicators used in the
index are then utilized in order to assign values to countries, based on the values assigned to the
same sample of countries already in the measure. Thus if a new indicator is added to the index
that has a sample of five countries, Botswana (6.8), Nigeria (5.5), Sudan (2.4), Burundi (3.1) and
Tanzania (7.2), and the equivalent scores for these countries in the index thus far are 0.55, 0.40,
0.10, 0.11, and 0.35, then Tanzania will be assigned the maximum equivalent value of 0.55,
Botswana the second value of 0.40, Nigeria, 0.35, Tanzania 0.32, Burundi 0.11 and Sudan 0.10.

12
The matching percentiles method used in this exercise is iterative, such that the indicators to be
compiled are first sorted in order of their representativeness, S1, S2 … Sn for each of n different
sources. As successive indicators are added, the standard deviation of the estimate is held
constant among affected countries, to prevent their scores from tending toward the mean. The
matching percentiles method has several advantages for creating a set of indices of this nature, in
that first it overcomes the problem of sampling bias, whereby a new source only covers a limited
and unrepresentative sample of countries, and second it allows us to keep adding successive
waves of indicators, even with very small samples, that can be used to continually ‘refine’ the
country scores simply by using information on relative rankings. Scores are estimated in four
waves from 1990 to 2005, using the most timely data for all countries, this yields one or more
social institutional scores for a total of 192 countries. The average number of indicators per
country estimated ranged from 7.7 to 17.3 items, depending on the institutional cluster, and
scores are rescaled from 0-1, whereby higher scores represent greater advancement on that
dimension of social development.

II. RESULTS

Figure 1.0 shows the relationship between economic development, as measured by log per capita
GDP at PPP, and the quality of social institutions, measured by each of the six social development
clusters. It can be seen that for all of the clusters except for membership of clubs and associations,
there is a positive relationship between national income and the quality of a country’s social
institutions4. Countries with higher levels of gender equity, civic activism, intergroup cohesion,
and interpersonal trust tend by and large to have to have higher national income per capita, and
vice versa. Further trends over time, and by region, are shown in Figure 3.0.

Now let us examine the relationship between social institutions and measures of human
development. Human development refers to the process by which people are granted the
freedoms and capabilities to lead lives that they value, and thereby raise their level of wellbeing;
its most commonly used proxy remains the Human Development Index (HDI), which is based on

4 The relationship between voluntary association and economic development is roughly curvilinear, with levels of
engagement in community activities high in low-income, agrarian societies, falling among urbanizing, medium-income
states, and high again among advanced, postindustrial societies. This result is consistent with an established sociological
literature according to which initial development leads to the breakdown of traditional communal bonds (‘communities
of necessity’), based around village or parish networks, which are then reconstructed around friendship and voluntary
organizations (‘communities of choice’), once the cost of social organization falls with improved transport,
telecommunications, and leisure hours (Tonnies [1887] 2001, Castells 2000, Inglehart 1997).

13
three of the most commonly acknowledged capabilities: health – the ability to live and long and
vigorous life; education – the ability to apply knowledge in work, family, and recreational life;
and income – the ability to purchase goods and services (UNDP 2007). While a range of other
indicators may be appropriate for measuring human development, including survey instruments
designed to assess subjective wellbeing and quality of life, as well as a more extensive ‘HDI-plus’
which would include other capabilities (including those measured directly by our social
institutional indices), for the purposes of this paper we will work with the categories of the HDI
as our main reference.

We begin therefore in Table 1.0 below by examining the relationship between social institutions
and the first component of human development, as defined by the HDI, which is health. The
tables present the results of simple cross-sectional regression models that use two commonly
used health indicators as their dependent variables, namely infant mortality and life expectancy.
As independent variables we include all of the six social development indices detailed above, for
the most recent 2005 estimate. Also included in the model are a range of control variables
commonly identified in the literature as determinants of cross-country health outcomes, notably
log GDP together with its square term, women’s education (measured by female progression to
secondary school), the quality of governance (measured using the Worldwide Governance
Indicator for Voice and Accountability), and the HIV/AIDS adult infection rate. Results of these
regressions are shown in Table 1.0 below.

Table 1.0 Regression Models, Social Institutions and Health Outcomes

Model 1 Model 2 Model 3 Model 4 Model 5

Life Life Infant Infant Infant

Dependent Variable
Expectancy Expectancy Mortality Mortality Mortality

Female progression to 0.009 0.05 -0.027 -0.2 -0.305

secondary school (%) (0.051) (0.028) (0.203) (0.1) (0.179)
17.744 33.028 -92.301 -127.24 -78.599
Log GDP
(13.321) (7.628)*** (52.173) (27.349)*** (43.606)
-1.698 4.482 7.001 4.163
Log GDP squared -0.629 (0.794)
(0.475)** (3.128) (1.702)*** (2.595)
-1.489 -1.284 1.707 1.316 1.91
HIV/AIDS rate
(0.092)*** (0.08)*** (0.366)*** (0.286)*** (0.42)***
Governance (Voice and 0.247 5.89 4.046 1.219
-0.812 (0.993)
Accountability) (0.882) (3.986) (3.164) (3.697)

14
 -3.562 10.833 -54.606 -77.249
Gender Equity -
(6.72) (5.255)* (26.747)* (18.839)***
1.079 10.878 -81.04 -93.833 -59.181
Civic Engagement
(7.94) (6.75) (31.86)* (24.078)*** (24.592)*
-1.258 26.75
Inclusion of Minorities - - -
(4.162) (16.584)
3.816 -24.085
Cohesion - - -
(3.982) (15.782)
-24.461 82.511
Crime - - -
(14.586) (58.681)
4.69 -14.886
Community - - -
(6.814) (23.007)
21.218
Proportion of Managers
- - - - (8.363)*
“Men More Right to Job”

-14.064 -101.021 486.888 698.53 437.583

Constant
(58.889) (30.758)** (231.2)* (110.281)*** (178.757)*

n 51 82 52 83 49
model r2 0.94 0.92 0.84 0.87 0.94

* significant at the 0.05 level; ** significant at the 0.01 level; *** significant at the 0.001 level

As would be expected, the HIV/AIDS adult prevalence rate is always significantly associated
with poorer health outcomes, while in all but one model, log GDP is significantly associated with
better outcomes. Note also, however, that of the six social development indices gender equity is
significantly associated with improved life expectancy and infant mortality outcomes, whilst civic
engagement is significantly associated with lower levels of infant mortality.
The association between norms of gender equity and human development outcomes is
doubly notable due to the inclusion of female progression to secondary school as a control
variable, thereby countering the possibility that the observed association is due to improved
maternal education. A simple interpretation is that in societies where women are treated
unequally, women themselves are the more likely victims of domestic abuse, infanticide, and
malnutrition, and this finding is consistent with a wide range of country and regional studies
examining ‘missing women’ (Sen 1992, Das Gupta 2005). Moreover, this result is not simply an
artifact, due to the inclusion of male-female disparities in mortality rates in the construction of
the gender equity measure. When a single World Values Survey item on norms of family
discrimination - the proportion of parents in the survey sample who agree that ‘a boy has more
right to a university education than a girl’ – is included in place of the gender equity construct,
the association between discrimination and infant mortality continues to remain significant. The
implication is clear: norms of gender discrimination - arbitrary differences in the way women are

15
treated in the home, workplace, and school - are responsible for higher infant mortality rates and
lower life expectancy.

A second aspect of these results worthy of further discussion is the fact that infant mortality is
more sensitive to social institutional quality than life expectancy. One explanation may be that
infant mortality is more sensitive than life expectancy to the level of equality, with the
overwhelming majority of infant deaths being attributable to the poorest families in society (Ross
2006). Levels of civic engagement may therefore act as a more significant predictor of infant
mortality than the level of participative government (as measured by the governance indicator
for Voice and Accountability) as only in democracies with widespread civic involvement in
politics is there mobilisation for policies that help assist the poor.

Social Institutions and Economic Development

Besides physical health, a second indicator used in human development evaluations, notably in
the Human Development Index (HDI), is income per capita. Is there evidence that social norms
and values, such as norms of fairness and non-discrimination, contribute to rising incomes for
all?

As Figures 1.0 show, beyond a certain threshold, GDP per capita and social institutional quality
are strongly, and positively, related. This may be due to one of two reasons. First, more robust
social institutions may be the outcome of processes of sustained economic development: as
societies become more affluent, individuals are empowered materially, educationally, and
socially, and this leads to predictable changes in social norms and values. For example, with
economic development citizens gain the human and financial resources needed to participate in
civic activities; governments can afford to better resource formal institutions such as the police
and courts; and women are more likely to receive an education and enter the labor market
(Inglehart and Baker 2000). Alternatively, it may be that sustainable long-run economic growth
depends upon the existence of a certain form of what Hall and Jones (1999) call ‘social
infrastructure’ - the norms, precedents, and cultural expectations that accumulate over the course
of a country’s history and help sustain capital accumulation. Institutions distort or protect the
pattern of economic incentives, depending upon whether they protect property rights, encourage
work, and reduce transaction costs. Such a view is the cornerstone of the new institutional
economics (NIE), according to which formal institutions (courts that protect property rights and

16
enforce the rule of law) and informal institutions (social trust, cohesion, and voluntary activity)
constitute long-run determinants of sustained capital accumulation, that is, economic growth
(North 1991, Hall and Jones 1999). This relationship between social institutions and growth has
been empirically tested in a range of studies within the econometric literature upon social capital
(Helliwell and Putnam 1995, Zak and Knack 2001, Beugelsdijk et al. 2004).

We are able to replicate such tests using the new social institutional aggregates. Two forms of
econometric analysis are found within the study of economic growth: i) proximate and ii) deep-
determinants determinants models. Proximate determinants are variables that appear in the
aggregate production function, such as physical and human capital per worker, and can be
investigated through time-series models using the rate of economic growth as the dependent
variable, and such factors as average years of worker education as independent variables. Deep
determinants, by contrast, are the variables that explain differences in the proximate determinants;
they are the underlying, or deep determinants of development, for example geography, trade, or
institutional quality (Rodrik 2002). Because present income per capita is simply the cumulative
result of long-run average growth, this can be used as the dependent variable in such regression
equations.

We begin by presenting a proximate determinants model. Among the most widely cited studies
the relationship between social institutions and growth is Knack and Keefer (1997), which
showed a strong positive effect of social trust across a sample of 27 countries. This result can be
replicated, using the much enlarged sample of countries that is made possible by the new social
development indices. As the dependent variable, the models take the average annual rate of
economic growth from 1990 to 1999, and as independent variables, the levels of primary and
secondary school enrolment in 1990, the price level of investment goods, real GDP per capita in
1990, a dummy variable for whether the country is a former Eastern bloc regime undergoing
transition, and each of the five social institutional variables, estimated around a base year of 1990.
By including such controls, we fulfill the requirement, suggested by Levine and Renelt (1992),
that commonly identified determinants always be included in growth regressions to ensure
robust coefficients. The model specification is the same as that of Knack and Keefer (1997), except
that the dependent variable covers the decade of the 1990s rather than that of the 1980s, and that
a dummy variable has been included to take account of the transition process in former Eastern
bloc economies during this period.

Table 2.0 Regression Models, Economic Growth 1990-9

17
 Model 1 Model 2 Model 3 Model 4
-.0177247 -.0080768 -0.010 -0.006
Price level of investment goods, 1990 (.0062173)** (.0035189)* (0.006) (0.003)
-.0001051 -.0001292 -0.000 -0.000**
Real GDP per capita, 1990 (.0000761) (.0000535)* (0.000) (0.000)
.0044492 -.000623 0.004 -0.001
Primary School Enrollment, 1990 (.0208054) (.0139137) (0.018) (0.012)
-.007188 .0028285 -0.007 -0.003
Secondary School Enrollment, 1990 (.0205804) (.0144989) (0.017) (0.013)

-3.039305 -3.504876 -2.972** -3.477***

Former Eastern Bloc Country, 0-1 (.9948739)** (.7402007)*** (0.896) (0.665)
3.505779 3.068237 3.964* 3.800**
Inclusion of Minorities (2.128653) (1.317669)* (1.847) (1.236)
-2.4998 -3.803
Gender Equity (3.940448) (3.426)
1.678283 2.400
Intergroup Cohesion (2.512064) (2.405)
0.2197413 1.424
Local Community (3.457139) (3.433)

9.917424 12.77026 5.275 7.883*

Crime and Interpersonal Trust (4.882278)* (3.597615)*** (5.924) (3.985)
.48338 -1.374
Civic Engagement (3.972525) (3.526)
-2.330* -1.793*
Sub-Saharan Africa (1.114) (0.704)
-0.879 -1.211
Latin America and Caribbean (1.005) (0.693)
-5.668449 -8.682451 -0.621 -3.487
Constant (5.024858) (3.401931)* (5.780) (3.898)
N 70 98 70 98
adj. r2 0.35 0.32 0.40 0.37

Dependent Variable: Per Capita Economic Growth Rate, 1990-9

* significant at the 0.05 level; ** significant at the 0.01 level; *** significant at the 0.001 level

Results are shown in Table 2.0. Reassuringly, the models produce similar findings using the 1990s
growth data as was found by Knack and Keefer (1997) using data from the 1980s, in particular
regarding the significant coefficient for the interpersonal safety and trust variable. The finding
that the interpersonal safety and trust variable functions similarly to the social trust variable
included in the Knack and Keefer models can be subject to the same interpretation, namely, that
security of property rights and reduced transaction costs are essential and independent
determinants of economic growth. Using the new indicator series however allows us to estimate
this effect for a much larger sample of countries than was previously possible: whereas 29
countries are included in the Knack and Keefer (1997) specification, model n here ranges from 50
to 70 cases. Given the sensitivity of regression models to minor outliers where the sample size is

18
low, the ability to replicate similar findings across a more representative sample is reassuring
evidence of the validity of the initial claims.

These findings also help shed light on other aspects of the growth literature. For example, it is
commonplace in some growth regressions, such as those of Alesina et al. (2003) or Easterly and
Levine (1997), to include dummy variables for Latin America and Sub-Saharan Africa, on account
of their regionally weak growth performance. The need for such variables stems from the
endemically slow growth of the respective regions during the periods under consideration, yet a
convincing reason needs to be supplied for why these countries should experience a long-run
equilibrium growth rate that is inferior to others. The inclusion of variables which proxy for
security of property rights, such as the level of crime and trust, or a variable for discrimination
and exclusion of minorities, including indigenous peoples and marginalized ethnic groups,
provides something in the way of an answer. Both regions perform poorly on both indicators,
and when dummy variables are included for each of these respective regions (Models 3 and 4),
their coefficients are substantially diminished: the Latin America dummy is not robust to the
presence of social institutional aggregates, and the Sub-Saharan Africa variable becomes only
weakly significant. Sub-Saharan African countries in the sample score on average about two-
thirds of a standard deviation below the global mean on crime and interpersonal trust, while
Latin American and Caribbean countries score a full standard deviation below this mean.
Meanwhile, with respect to inclusion of minorities, Sub-Saharan African societies score on
average half of a standard deviation below the global mean, while a number of Latin American
societies (in particular in the Andes and Central America) score a full standard deviation or more
below this mean. These results support the view that growth may be endogenous to the
institutional structure of a society, including the social institutions that govern economic
interaction. This includes the extent to which i) social institutions ensure protection of property
rights, and ii) allow minority groups to participate equally in economic processes, such that they
can draw the maximum return from their stock of human and economic capital. Because Sub-
Saharan Africa as well as the Latin America and Caribbean region fare poorly in both regards,
this may have restrained long-run equilibrium growth.

Because growth rates are sensitive to a range of short-term factors such as macroeconomic policy,
growth spillovers, or changes in commodity and other input prices, limited inferences can be
made from decadal panel regressions, and it has become more common to discuss the ‘deep’ or
long-term determinants of economic growth. Accordingly, we supplement the above regressions
with a deep determinants model of the relationship between different forms of institutions and

19
GDP. Following standard practice in the deep determinants literature, log GDP per capita is used
as the dependent variable, and measures of both formal and informal institutions as independent
variables. As measures of formal institutions, we include the Worldwide Governance Indicator
for Rule of Law (Kaufman, Kraay and Maastruzzi 2007) and the Ease of Doing Business Index
(World Bank 2007). The Worldwide Governance Indicator for Rule of Law is a measure of the
extent to which agents have confidence in and abide by the rules of society, including the quality
of contract enforcement and property rights, the police, and the courts, as well as the likelihood
of crime and violence (Kaufman, Kraay and Maastruzzi 2007). The Ease of Doing Business Index
measures the costs to firms of business regulations, including in such areas as starting a business,
employing workers, and paying taxes (World Bank 2008). As measures of informal institutions,
we include each of our five social institutional measures, as outlined in this document: civic
activism, clubs and associations, intergroup cohesion, interpersonal safety and trust, and gender
equity.

Because of the endogeneity between formal and informal institutions and growth, both the
formal and informal institutional variables are instrumented. As instruments for informal
institutions, we include the fraction belonging to each of the major religious denominations, as
provided by La Porta et al. (1997). A strong case can be made that religious beliefs act as a major
force conditioning the social norms and conventions that exist in society; furthermore, a long
literature has addressed the relationship between social institutions and economic activity,
notably the role of Protestantism in fostering greater norms of social trust, membership of clubs
and associations, and civic activism (Weber 1958). Following the argument that hierarchical
religions foster lower interpersonal trust than more horizontal systems, Zak and Knack (2001) use
the proportion of the population that is Catholic, Muslim or Eastern Orthodox as an instrument
for social trust. As instruments for formal institutions, we include the Bockstette et al. (2002)
indicator for state history, and the proportion of European language speakers as a percentage of
total population, as provided by Hall and Jones (1999). The argument for state history as a
determinant of good governance is made by Bockstette et al. (2002), while the argument for the
proportion of European settlers as a determinant of contract security and regulatory quality has
been made by (among others) Acemoglu, Johnson and Robinson (2001), who contend that in
countries where European settlers were able to settle in large numbers, they established
institutions to defend property rights, whereas in countries where Europeans were able to rule
but not to settle, they established extractive institutions which set a norm for predatory state
behavior.

20
Tables 3.0 Two-Stage Least Squares Models, Log GDP per capita

0.237 1.174 1.251 0.661 1.163 0.996

Rule of Law (0.392) (0.141)*** (0.109)*** (0.141)*** (0.113)*** (0.302)**
6.975
Civic Activism (2.947)*
-0.417
Safety and Trust (1.271)
-1.411
Intergroup Cohesion (1.351)
4.440
Gender Equity (1.087)***
-4.097
Clubs and Associations (1.466)**
0.001
Inclusion of Minorities (1.485)
4.758 8.800 9.302 6.312 10.921 8.693
Constant (1.617)** (0.622)*** (0.701)*** (0.554)*** (0.833)*** (0.494)***

N 103 98 104 109 74 64

Adj. r2 0.79 0.70 0.75 0.81 0.56 0.73

0.003 0.022 0.025 0.013 0.025 0.015

Doing Business Index
(0.007) (0.003)*** (0.003)*** (0.003)*** (0.002)*** (0.007)*
7.795
Civic Activism (2.562)**
1.402
Safety and Trust (1.327)
-1.215
Intergroup Cohesion (1.749)
4.513
Gender Equity (1.263)***
-3.026
Clubs and Associations (1.291)*
1.885
Inclusion of Minorities (1.424)
4.528 9.728 11.368 7.398 12.534 9.230
Constant (2.018)* (0.860)*** (1.104)*** (0.908)*** (0.793)*** (1.042)***

N 96 92 99 103 72 63
Adj. r2 0.79 0.62 0.61 0.79 0.58 0.67

All independent variables instrumented using: fraction of population Protestant; Catholic; Buddhist; Muslim; Orthodox; fraction of
population speaking European languages; state history.
Dependent variable: Log GDP per capita.

Results are presented in Tables 3.0. Two social institutional measures emerge as significant when
tested together with formal institutions: civic activism and gender equity. Safety and trust and
intergroup cohesion are not significant when tested together with a measure for rule of law,
which possibly indicates that these are in part second-order effects of formal institutional quality
(Foa 2008). However, as suggested in our analysis of the proximate determinants of economic

21
growth above, norms of trust and cooperation may be a proximate determinant of development.
The results suggest important long-term consequences of informal institutions upon the process
of economic development.

III. CONCLUSION

In recent years, there has been a simmering interest in measuring broader facets of human
development, such as non-discrimination, freedom from criminal or ethnic violence, and access
to civic and social life. However, empirical hypothesis testing has been held back by a lack of
available cross-country comparative measures. This paper uses a new set of social institutional
indices compiled using over 200 indicators drawn from a set of 25 available sources, to further
the work in this field. Given the breadth of sources used, this constitutes the first truly global set
of indices of social norms and practices based on comparative public perception and survey data.
In brief empirical tests, this article has presented evidence suggestive of multiple linkages
between social institutions and broader aspects of human development. Norms of equality and
non-discrimination against women are found to have significant independent effects upon
aggregate health outcomes, even after controlling for other relevant factors. Meanwhile,
interpersonal trust and norms of non-discrimination against ethnic, religious and caste minorities
are to found to be proximate determinants of economic growth, while countries with higher civic
engagement, and stronger norms of equality and fairness toward women, are found to achieve
significantly higher levels of income per capita in the long-run, even after controlling for the
quality of formal institutions or governance. The results suggest therefore that social institutions
are not simply an ‘effect’ of economic processes, but a constitutive factor in human and economic
outcomes. Social norms such as the fair treatment of minorities, opportunities for women’s
empowerment, and conventions of reciprocity and trust play an independent role in attaining
better health and economic outcomes, over and above their direct contributions to human
wellbeing.

22
References

Acemoglu, D., Johnson, S., and Robinson, J. (2001). “The Colonial Origins of Comparative Development: An Empirical
Investigation”. American Economic Review, December 2001.

Acemoglu, D. and Robinson. J. (2006). Economic Origins of Dictatorship and Democracy. New York: Cambridge University
Press.

Alesina, A., Baqir, R., Easterly, W. (1999). "Public Goods and Ethnic Divisions", Quarterly Journal of Economics, 114(4), 1243-
1284.

Alesina, A., Devleeschauwer, A., Easterly, W., Kurlat, S., Wacziarg, R. (2003) “Fractionalization”, Journal of Economic
Growth. 8 (2): 155-194.

Almond, G. and Verba, S. (1963). The Civic Culture: Political Attitudes and Democracy in Five Nations. Princeton: Princeton
University Press.

Arrow, K. (1974). The Limits of Organization. Norton, New York.

Barro, R. (1991). “Economic Growth in a Cross-Section of Countries”. Quarterly Journal of Economics. 6, 407-444.

Bebbington, A., Guugenheim, S., and Woolcock, M. (2006). “Concepts: Their Context and Their Consequences”, In
Anthony J. Bebbington, Michael Woolcock, Scott Guggenheim, and Elizabeth A. Olson, eds., The Search for
Empowerment: Social Capital as Idea and Practise in the World Bank. Connecticut: Kumarian Press.

Berkman, L. and Syme, L. (1979). “Social Networks, Host Resistance, and Mortality: a Nine-Year Follow-Up Study of
Alameda County Residents.” American Journal of Epidemiology. 109, no. 2: 186-204.

Beugelsdijk, S., de Groot, H., and van Schaik, A. (2004). "Trust and economic growth: a robustness analysis", Oxford
Economic Papers, 56, 118-134.

Bockstette, V., Chanda, A. and Putterman, L.. (2002). “States and Markets: The Advantage of an Early Start,” Journal of
Economic Growth 7, 347-369.

Castells, M. (2000). The Rise of the Network Society. Malden, MA: Blackwell Publishers.

Coffé, H. and Geys, B. (2005). “Institutional Performance and Social Capital: An Application to the Local Government
Level”, Journal of Urban Affairs 27 (5): 485-501.

Coleman, J. (1988). “Social Capital in the Creation of Human Capital”, American Journal of Sociology, vol. 94, pp. s95-s120.

Collier, P. (1999). "On the Economic Consequences of Civil War", Oxford Economic Papers, 51:168-183.

Cox, D., Eser, Z. and Jiminez, E. (1997). “Family Safety Nets in Economic Transition.” In Jein Klugman, ed., Poverty in
Russia: Public Policy and Private Responses. Washington DC: World Bank.

Easterly, W., and Levine, R. (1997). “Africa’s Growth Tragedy: Policies and Ethnic Divisions”, The Quarterly Journal of
Economics, 112(4), pp. 1203-1250.

Easterly, W., Ritzen, J., and Woolcock, M. (2006). “Social Capital, Institutions, and Growth”, Economics and Politics 18 (2):
0954-1985.

Esteve-Volart, B. (2004). “Gender discrimination and growth: Theory and evidence from India.” DEDPS Working Paper
No. 42. London: London School of Economics and Political Science.

Etzioni, A. (1997). The New Golden Rule: Community and Morality in a Democratic Society. London: Profile Books.

Evans, P. (1996). "Government Action, Social Capital and Development: Reviewing the Evidence on Synergy", World
Development, 24(6), pp. 1119-1132.

23
Fearon, J., Laitin, D. (1996), “Explaining Interethnic Cooperation”, American Political Science Review, 90(4), 715-735

Fukuyama, F. (1995). Trust: Social Virtues and the Creation of Prosperity. NY: Free Press.

Grootaert, C. (2001). “Does social capital help the poor? A synthesis of findings from the local level institutions studies in
Bolivia, Burkina Faso and Indonesia”, World Bank Local Level Institutions Working Paper No. 10. World Bank:
Washington, DC.

Grootaert, C. and Bastelaer, T. V. (2002). “Social Capital: From Definition to Measurement”, In Christiaan Grootaert and
Thierry van Bastelaer, eds., Understanding and Measuring Social Capital: A Multidisciplinary Tool for Practitioners.
The World Bank, Washington, D.C.

Guggenheim, S. (2006). “Crises and Contradictions: Understanding the Origins of a Community Development Project in
Indonesia”. In Bebbington, Woolcock, Guggenheim and Olson (eds.), The Search for Empowerment. CT: Kumarian
Press.

Hall, R. and Jones, C. (1999). “Why do Some Countries Produce so Much More Output Per Worker Than Others?”
Quarterly Journal of Economics 114, 83-116.

Helliwell, J. (2003). "How's Life? Combining Individual And National Variables To Explain Subjective Well-Being,"
Economic Modelling, v20, 331-360.

Helliwell, J. and Putnam, R. (1995). Economic growth and Social Capital in Italy. Eastern Economic Journal 21 (3), pp. 295–
307.

Inglehart, R. (1997). Modernization and Postmodernization. Princeton: Princeton University Press.

Inglehart, R. and Baker, W. (2000). “Modernization, Cultural Change, and the Persistence of Traditional Values,” American
Sociological Review 65, 19-51.

Inglehart, R. and Welzel, C. (2005). Modernization, Cultural Change and Democracy. Cambridge University Press.

Kaufmann, D., Kraay, A., and Zoido-Lobatόn, P. (1999a). “Aggregating Government Indicators.” World Bank Policy
research Working Paper No. 2195, Washington, D.C.

Kaufmann, D., Kraay, A., and Zoido-Lobatόn, P. (1999b). “Governance Matters.” World Bank Policy research Working
Paper No. 2195, Washington, D.C.

Kaufmann, D., Kraay, A., and Mastruzzi, M. (2007). “Governance Matters VI: Aggregate and Individual Governance
Indicators 1996-2006”, World Bank Policy Research Working Paper No. 4280, Washington, D.C.

King, E. and Hill, A. (1993). Women’s Education in Developing Countries: Barriers, Benefits and Policies. John Hopkin
University Press, Baltimore.

Knack, S. (2002). “Social Capital and the Quality of Government: Evidence from the States”, American Journal of Political
Science 46 (4): 772-785.

Knack, S., and Keefer, P. (1997). “Does Social Capital have an Economic Payoff? A Cross-Country Investigation”, The
Quaterly Journal of Economics 112 (4):1251-1288.

Knowles, S. and Weatherston, C. (2007). "Informal Institutions and Cross-Country Income Differences", CREDIT
Discussion Paper no. 06/06.

La Porta, R., Lopez-de-Silane, F., Shleifer, A., and Vishny, R. (1997). "Trust in Large Organizations", American Economic
Review, American Economic Association, vol. 87(2), pp. 333-38.

Lam, W.F. (1994). “Institutions, Engineering Infrastructure, and Performance in the Governance and Management of
Irrigation Systems: The Case of Nepal.” Ph.D. dissertation, School of Public and Environmental Affairs and
Department of Political Science, Indiana University, Bloomington.

Lam, W.F. (1996). "Institutional Design of Public Agencies and Co-Production: A Study of Irrigation Associations in
Taiwan," World Development, vol. 24, no. 6.

Lambsdorff, J. G. (2006). "The Methodology of the Corruptions Perceptions Index", Transparency International and the
University of Passau, permanent url: http://www.icgg.org/downloads/CPI_2006_Methodology.pdf

24
Morrison, A., and Lamana, F. (2006). Gender issues in the Kyrgyz labor market. Background paper for Kyrgyz Poverty
Assessment. Washington, DC: World Bank.

Narayan, D. and Pritchett, L. (1999). “Cents and Sociability: Household Income and Social Capital in Rural Tanzania”,
Economic Development and Cultural Change 47(4): 871-97.

Norris, P. (ed). (1999). Critical Citizens: Global Support for Democratic Governance. Oxford: Oxford University Press.

North, D. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.

North, D. (1991). "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112.

Ostrom, E. (1996). “Crossing the Great Divide: coproduction, synergy, and development”, World Development. 24, 6: 1073-
87.

Paxton, P. (2002). "Social Capital and Democracy: An Interdependent Relationship." American Sociological Review, 67:254-
277.

Posner, D. (2004). “Measuring Ethnic Fractionalization in Africa,” American Journal of Political Science 48, 4, pp. 849-863.

Putnam, R., Leonardi, R. and Nanetti, R. (1993) Making Democracy Work: Civic Traditions in Modern Italy. Princeton:
Princeton University Press.

Putnam, R. (2000). Bowling Alone: The Collapse and Revival of American Community. New York: Simon and Schuster.

Putnam, R. (2007). "E Pluribus Unum: Diversity and Community in the Twenty-first Century", Scandinavian Political
Studies, 30 (2), 137–174.

Rice, T. and Feldman, J. (1997). “Civic Culture and Democracy from Europe to America,” Journal of Politics, 59:1143-1172.

Robinson, J., and Verdier, T. (2002). "The Political Economy of Clientelism," CEPR Discussion Papers 3205.

Rodrik, D., Subramanian, A. and Trebbi, F. (2004). “Institutions Rule: The Primacy of Institutions Over Geography and
Integration in Economic Development”, Journal of Economic Growth, 9, 131-165.

Schultz, P. (2002). “Why governments should invest more to educate girls.” World Development, 30(2): 207-225.

Tabellini, G. (2005). "Culture and Institutions: Economic Development in the Regions of Europe", CESifo Working Paper
Series, CESifo Working Paper No. 1492.

Tendler, J. (1995). Social Capital and the Public Sector: The Blurred Boundaries Between Private and Public, Dept. Of Urban
Studies and Planning. MIT: Cambridge, MA.

Thomas, D., Strauss, J. and Henriques, M. 1991. "How Does Mother's Education Affect Child Height?" Journal of Human
Resources, 26, no. 2:183-211.

Tonnies, F. ([1887] 2001). Community and Civil Society. Cambridge: Cambridge University Press.

Varshney, A. (2001). “Ethnic Conflict and Civil Society: India and beyond”, World Politics 53 (3) 362-98.

Woolcock and Narayan. (2000). "Social Capital: Implications for Development Theory, Research, and Policy", World Bank
Research Observer, Vol. 15, 2, pp. 225-249.

World Bank. 2001. Engendering development: Through Gender Equality in Rights, Resources, and Voice. New York: Oxford
University Press.

Zak, P. and Knack, S. (2001). “Trust and Growth,” Economic Journal 111, 295-321.

25
 Appendices

Figure 1.0 Social Institutions and Log GDP per Capita

Civic Activism
Civic Engagement
Clubs and Associations
Local Community

12 12

11 11
Log GDP per capita, 2005

Log GDP per capita, 2005

10 10

9 9

8 8

7 7

6
6
0 0.2 0.4 0.6 0.8 1
0 0.1 0.2 0.3 0.4 0.5
Civic Engagement
Local Community

Intergroup
Intergroup Cohesion
Cohesion Interpersonal
Crime Safety Trust
and Interpersonal and Trust

12 12

11
Log GDP per capita, 2005

11
Log GDP per capita, 2005

10 10

9 9

8 8

7 7

6
6
0 0.2 0.4 0.6 0.8 1
0.8 0.85 0.9 0.95 1 1.05
Intergroup Cohe sion
Crime and Interpersonal Trust

Gender
Gender Equity
Equity Inclusion of Minorities
12 12

11
Log GDP per capita, 2005

11

10
10

9
9

8
8

7
7
6
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 6
0 0.2 0.4 0.6 0.8 1 1.2
Ge nder Equity
Inclusion of Minorities

26
 Figure 2.0 Social Institutions and Government Effectiveness

Civic Engagement
Civic Activism Local
Clubs Community
and Associations
3 3

2
Government Effectiveness, 2005

Government Effectiveness, 2005

1
1

0
0

-1
-1

-2
-2

-3
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 -3
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5
Civic Capacity, 2005
Local Community, 2005

Intergroup Cohesion
Intergroup Cohesion Interpersonal Safety and
Crime and Interpersonal Trust
Trust

3 3

2
Government Effectiveness, 2005

2
Government Effectiveness, 2005

1 1

0
0

-1
-1

-2
-2

-3
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 -3
0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1
Intergroup Cohesion, 2005
Crime and Personal Safety, 2005

GenderEquity
Gender Equity
Inclusion of Minorities
3 3

2 2
Government Effectiveness, 2005

1 1

0 0

-1 -1

-2 -2

-3 -3
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Gender Equity, 2005 Inclusion of Minorities, 2005

27
 SOURCES USED

Civic Activism

Indicator Source Coverage

Proportion of public who have listened to radio news ‘in the last day’ or ‘several times in the last week’ Afrobarometer 16

Proportion of public who have watched TV news ‘in the last day’ or ‘several times in the last week’ Afrobarometer 16

Proportion of public who have read newspaper news ‘in the last day’ or ‘several times in the last week’ Afrobarometer 16

Civicus civil society rating — Structure Civicus 37

Civicus civil society rating — Environment Civicus 37

Civicus civil society rating — Values Civicus 37

Civicus civil society rating — Impact Civicus 37

Radios per capita ITU 197

Radios per household ITU 197

Proportion of public who ‘have’ or ‘would be prepared’ to take part in a peaceful demonstration Latinobarometer 19

Proportion of public who ‘have’ or ‘would be prepared’ to sign a petition Latinobarometer 18

Respondent says they use the radio to inform themselves about politics Latinobarometer 18

Respondent says they use the newspaper to inform themselves about politics Latinobarometer 18

Respondent says they use the television to inform themselves about politics Latinobarometer 18

Percentage of respondents who watch TV news a great deal or very much Latinobarometer 18

Percentage of respondents who read newspaper news a great deal or very much Latinobarometer 18

Percentage of respondents who listen to radio news a great deal or very much Latinobarometer 18

Average number of days spent watching TV news, per week Latinobarometer 19

Average number of days spent reading newspaper news, per week Latinobarometer 19

Average number of days spent listening to radio news, per week Latinobarometer 19
Density of international organisation secretariats of international non-governmental organizations in Global Civil Society
given country Project 175
Extent to which organisations and individuals in each country are members of INGOs, number of Global Civil Society
INGOs with members in that country Project 176

Percentage of the workforce employed in the NGO sector SAIS 36

Newspapers per capita UNESCO 107

Daily newspaper titles, per capita UNESCO

World Values Surveys,
Proportion of respondents who either 'have done' or 'might' sign a petition Latinobarometer 89

Proportion of respondents who either 'have done' or 'might' join a boycott World Values Surveys 81
World Values Surveys,
Afrobarometer,
Proportion of respondents who 'have done' or 'might' attend a peaceful demonstration Latinobarometer 96

28
Proportion of respondents who have used a daily newspaper in the last week to find out what is going
on in the world World Values Surveys 22
Proportion of respondents who have used news broadcasts on radio or TV in the last week to find out
what is going on in the world World Values Surveys 22
Proportion of respondents who have used printed magazines in the last week to find out what is going
on in the world World Values Surveys 22
Proportion of respondents who have used in depth reports on radio or TV in the last week to find out
what is going on in the world World Values Surveys 22
Proportion of respondents who have used books in the last week to find out what is going on in the
world World Values Surveys 22
Proportion of respondents who have used internet or email in the last week to find out what is going
on in the world World Values Surveys 22

29
 Clubs and Associations

Indicator Source Coverage

Respondent says that they use their free time to participate in voluntary associations Latinbarometer 18

Respondent says that they use their free time to work for local or community development groups Latinbarometer 18

Percentage respondents who are members of youth groups Latinbarometer 18

Percentage of respondents who are members of women's groups Latinbarometer 18

Percentage of respondents who are members of sports clubs Latinbarometer 18

Percentage of respondents who are members of church groups Latinbarometer 18

Percentage of respondents who work for an issue that affects their community 'very frequently' or
'frequently' Latinbarometer 18

Percentage of respondents who are members of labor unions Latinbarometer 18

Percentage of respondents who are members of voluntary associations Latinbarometer 18

Percentage of respondents who are members of a political party Latinbarometer 18

Percentage of respondents who are members of a cultural center Latinbarometer 18

Active or inactive member of religious group Afrobarometer 16

Active or inactive member of development association Afrobarometer 16

Has or would be prepared to attend community meeting Afrobarometer 16

Active or inactive member of labor union Afrobarometer 16

Active or inactive member of business group Afrobarometer 16

International Crime
Percentage respondents saying that people generally help one another in their neighborhood Victim Survey 59

Proportion of respondents who are active or inactive members, church or religious organization World Values Survey 57

Proportion of respondents who are active or inactive members, sports or recreational organization World Values Survey 58

Proportion of respondents who are active or inactive members, other voluntary associations World Values Survey 56

Participate in youth associations and groups World Values Survey 58

Belong to sports club World Values Survey 58

Respondent has conducted unpaid voluntary health work World Values Survey 54

Respondent belongs to conservational organization World Values Survey 62

Respondent belongs to women's organization World Values Survey 58

Respondent belongs to peace movement World Values Survey 56

Proportion of respondents who are active or inactive members, arts, music, or educational organization World Values Survey 58

Proportion of respondents who are active or inactive members, labor union World Values Survey 58

Proportion of respondents who are active or inactive members, environmental organizations World Values Survey 57

Proportion of respondents who are active or inactive members, professional organizations World Values Survey 76

30
Proportion of respondents who are active or inactive members, human rights organizations World Values Survey 66

Proportion of respondents who are active or inactive members, consumer groups World Values Survey 22

Spent time socializing with friends in last month or last few weeks World Values Survey 64
Spent time socializing with other members of arts or cultural association in last month or last few
weeks World Values Survey 58
International Social
Member of church or religious organization Survey 27
International Social
Member of neighborhood group Survey 27

31
 Intergroup Cohesion

Indicator Source Coverage

Number of reported incidents of violent riots Databanks 189

Number of reported incidents of assassinations Databanks 189

Number of reported incidents of terrorist acts Databanks 189

Number of reported incidents of guerrilla activity Databanks 121

Economist Intelligence
Economist Intelligence Unit rating on likelihood of violent demonstrations Unit 121
Economist Intelligence
Economist Intelligence Unit rating on potential for terrorist acts Unit 121

Rating on the ‘legacy of vengeance-seeking group grievance or group paranoia’ Fund for Peace 176
International Country
Level of civil disorder, International Country Risk Guide rating Risk Guide 140
International Country
Level of internal conflict, International Country Risk Guide rating Risk Guide 140
International Country
Risk of terrorism, International Country Risk Guide rating Risk Guide 140

Level of ethnic minority rebellion in country Minorities at Risk 118

32
 Interpersonal Safety and Trust

Indicator Source Coverage

Felt unsafe in home, proportion saying 'never' Afrobarometer 16

Had stuff stolen from home, proportion saying 'never' Afrobarometer 16

Been attacked, proportion saying 'never' Afrobarometer 16

Proportion of respondents who say that 'in general, most people can be trusted' Asian Barometer 10
Proportion of respondents who say that most people try to be fair, rather than take advantage of you
when given the chance Asian Barometer 10
Economist Intelligence
Economist Intelligence Unit rating on social distrust Unit 121
International Crime
Percentage respondents feel 'very safe' or 'fairly safe' walking alone in their area after dark Victim Survey 64
International Crime
Percentage respondents feel 'very safe' or 'fairly safe' while at home after dark Victim Survey 37
International Crime
Percentage respondents who avoid places when they go out Victim Survey 56
International Crime
Percentage respondents who take company with them when they go out Victim Survey 67
International Crime
Percentage respondents experienced a car theft in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced heft from car in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced damage to car in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced motor theft in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced burglary in last 5 years Victim Survey 66
International Crime
Percentage respondents experienced attempted burglary in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced garage theft in last 5 years Victim Survey 28
International Crime
Percentage respondents experienced robbery in last 5 years Victim Survey 66
International Crime
Percentage respondents experienced personal theft in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced sexual offence in last 5 years Victim Survey 67
International Crime
Percentage respondents experienced assault in last 5 years Victim Survey 67

Interpol homicide rate Interpol 124

Interpol rape rate Interpol 54

Interpol rate of serious assault Interpol 57

Interpol rate of aggravated theft Interpol 52

33
Interpol rate of breaking and entering Interpol 57

Interpol vehicle theft rate Interpol 59

Interpol ‘other theft’ rate Interpol 59

Interpol fraud rate Interpol 59

Interpol consumer fraud rate Interpol 56

World Health
WHO homicide rate Organization 102

Respondent or someone in their family assaulted in the last 12 months Latinobarometer 19

Percentage of respondents who feel secure in the neighborhood in which they live Latinobarometer 17

Percentage of respondents who have been the victim of a street crime Latinobarometer 17

Percentage of respondents who have been the victim of burglary Latinobarometer 17

Percentage of respondents who have been the subject of attempted homicide Latinobarometer 17

Percentage of respondents who have been the subject of attempted abduction Latinobarometer 17

State Department crime advisories, coded 1-5 US State Department 186

United Nations
Criminal Justice
UNCJIN homicide rate Information Network 116
World Development
Percentage of managers surveyed for whom crime is a major business constraint Indicators 66
World Values Survey,
Afrobarometer,
Proportion of respondents who say that 'in general, most people can be trusted' Latinobarometer 86
Proportion of respondents who say that most people try to be fair, rather than take advantage of you
when given the chance World Values Survey 40

Proportion of respondents who do not very much or do not at all trust their neighborhood World Values Survey 22

Proportion of respondents who do not very much or do not at all trust people they know personally World Values Survey 22
Proportion of respondents who do not very much or do not at all trust people they meet for the first
time World Values Survey 22

34
 Inclusion of Minorities

Indicator Source Coverage

Which of the following groups is most discriminated against in this country – or are there no such
groups? Combined percentage citing: blacks, indigenous peoples, mulattos, mestizos, Asians, Arabs, Latinobarometer 18
Jews, immigrants, the disabled, those with AIDS, homosexuals
Average perceived level of discrimination against indigenous peoples in the workplace (1-10), among
Latinobarometer 18
all respondents in country who identify as indigenous or mestizo
Average perceived level of discrimination against indigenous peoples in schools and colleges (1-10),
Latinobarometer 18
among all respondents in country who identify as indigenous or mestizo
Average perceived level of discrimination against indigenous peoples in political parties (1-10), among
Latinobarometer 18
all respondents in country who identify as indigenous or mestizo
Average perceived level of discrimination against indigenous peoples by the police (1-10), among all
Latinobarometer 18
respondents in country who identify as indigenous or mestizo
Average perceived level of discrimination against indigenous peoples in the courts (1-10), among all
Latinobarometer 18
respondents in country who identify as indigenous or mestizo
Average perceived level of discrimination against blacks in the workplace (1-10), among all
Latinobarometer 18
respondents in country who identify as black or mulatto
Average perceived level of discrimination against blacks in schools and colleges (1-10), among all
Latinobarometer 18
respondents in country who identify as black or mulatto
Average perceived level of discrimination against blacks in the political parties (1-10), among all
Latinobarometer 18
respondents in country who identify as black or mulatto
Average perceived level of discrimination against blacks by the police (1-10), among all respondents in
Latinobarometer 18
country who identify as black or mulatto
Average perceived level of discrimination against blacks in the courts (1-10), among all respondents in
Latinobarometer 18
country who identify as black or mulatto
Of all the reasons people are not treated equally, which of the following most affect you?
Latinobarometer 18
Discrimination due to skin color, discrimination against immigrants
economic situation of ethnic group is 'same' as other groups Afrobarometer 16

political position of ethnic group is 'same' as other groups Afrobarometer 16

ethnic group 'never' treated unfairly Afrobarometer 16

Rating on level of uneven economic development along group lines Fund for Peace 176

proportion of respondents who do not very much or do not at all trust people of another religion World Values Surveys 87

proportion of respondents who do not very much or do not at all trust people of another nationality World Values Surveys 87

proportion of respondents who trust people from other ethnic groups 'not at all' or 'just somewhat' World Values Surveys 87
Percentage of respondents who feel that 'being of the same ethnic group' is very important in a
World Values Surveys 87
marriage
proportion of respondents refusing to have as neighbors people of a different race or caste World Values Surveys 87

proportion of respondents refusing to have people who have AIDS as neighbors World Values Surveys 87

proportion of respondents refusing to have immigrants or foreign workers as neighbors World Values Surveys 87

proportion of respondents refusing to have homosexuals as neighbors World Values Surveys 87

proportion of respondents refusing to have people of a different religion as neighbors World Values Surveys 87

log minority size, * average levels of economic discrimination Minorities at Risk 118

log minority size, * average economic disparity between group and population Minorities at Risk 118

35
 Gender Equity

Indicator Source Coverage

Percentage agreeing that a married man has a right to beat his wife and children Afrobarometer 15
Percentage of respondents who tend to agree or strongly agree that 'women have always been subject
to traditional laws and customs, and should remain so'. Afrobarometer 15
Percentage of respondents who tend to agree or strongly agree that 'women should have the same
chance of being elected to political office as men'. Afrobarometer 4

Rating on level of women's economic rights CIRI 190

Rating on level of women's social rights CIRI 190

International Labor
Ratio of average female to male wages, across all available labor categories Organization 65
Percentage of women who agree that women have the same chance as men to get a good job in their
country Latinobarometer 18
Percentage of women who agree that women have the chance to earn the same salary as men in their
country Latinobarometer 19
Percentage of women who agree that women have the same chance as men to get a good education in
their country Latinobarometer 18
Proportion of employers and managers who agree or strongly agree that when jobs are scarce, men
have more right to a job than women World Values Surveys 83
Proportion of those of voting age who agree or strongly agree that on the whole, men make better
political leaders than women do World Values Surveys 74
Proportion of parents who agree or strongly agree that a university education is more important for a
boy than a girl World Values Surveys 75
Proportion of employers and managers who agree or strongly agree that on the whole, men make
better business executives than women do World Values Surveys 23
World Development
Percentage of labor force that is female Indicators 186
International Labor
Ratio of females among legislators, senior officials and managers Organization 94
International Labor
Ratio of females in professional jobs Organization 136
World Development
Ratio between female and male primary school enrollment Indicators 175
World Development
Ratio between female and male secondary school enrollment Indicators 150
World Development
Ratio between female and male tertiary educational enrollment Indicators 173
World Development
Ratio between adult female and male literacy rates Indicators 146
World Development
Ratio between adult female and adult male mortality rates Indicators 195

36