Social Capital and Economic Growth –
A cross sectional and panel analysis


Using cross-country and panel regressions my thesis is a contribution to the question whether social capital is important for explaining international differences in economic growth. It is tested whether the effect of social capital will still be significant when putting in basic control variables. Following an augmented Solow-Swan Model the author considers the concept of conditional convergence by including ln income, the two Solow parameters investment and population growth and human capital. In a further step measures of social integration as Social Expenditure data per GDP as a measure of welfare state activity, the Gini-Cofficient as a measure of social inequality and Workers embedded in Unions as a measure union density will be included. Developing countries will be differentiated to transition, OECD and EU15 countries. Data on Growth per Capita and income will be drawn and calculated from the World Development Indicators and additionally from the National Accounts of OECD countries. Data on proportion of investment and population growth will be taken from the Penn World Tables 6.1. Data on Human Capital will be taken from the most recent Barro and Lee dataset. Data on Social Capital will be provided by the three waves of the World Value Survey 1990-93, 1995-97 and 1999-2002. For my cross-section analysis my independent variable will be Growth per Capita from 1990-2004. For my panel analysis my independent variable will be Growth per Capita from 1990-94, 1995-99 and 2000-04.