Mind the gap!: Social capital, East and West

Social capital in Central and Eastern Europe lags behind that in Western European countries. We analyze the determinants of individual stock of social capital - measured by civic participation and access to social networks - and find that this gap persists when we account for individual characteristics and endowments of respondents. However, the gap disappears completely after we include aggregate measures of economic development and quality of institutions. Informal institutions such as the prevalence of corruption in post-communist countries appear particularly important. With the enlargement of the European Union, the gap in social capital should gradually disappear as the new member states catch up (economically and institutionally) with the old ones. Journal of Comparative Economics 36 (2) (2008) 264-286. Department of Economics and Finance, and Centre for Economic Development and Institutions (CEDI), Brunel University, UK; CEPR, London, UK; WDI, University of Michigan, USA; Faculty of Social and Behavioural Sciences, Faculty of Economics and Econometrics, Amsterdam Institute for Advanced Labour Studies, and Tinbergen Institute, University of Amsterdam, The Netherlands. (c) 2008 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.