Social Capital and Export Growth: An Industrial Community in Southern Brazil

This paper explores the relevance of social capital for industrial development by way of a case study. The paper shows that there are causal connections both ways and that these connections only become apparent by adopting an historical approach. The critical steps in the enquiry are the distinctions between different kinds of social capital and between different stages of economic growth. The paper shows how social capital was generated in a period which preceded industrialisation, how the early phase of industrial growth drew on that social capital and strengthened it further; how a later period of rapid export growth benefited from this social capital but then contributed to its decline; and how that social capital is now being rebuilt on a different basis. The paper concludes with an optimistic note, suggesting that social capital is not necessarily an asset which some regions are endowed with and others not, but that it is an asset that can be created.