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Less Bang for Your Buck? How Social Capital Constrains the Effectiveness of Social Welfare Spending

Published online by Cambridge University Press:  25 January 2021

Mallory E. Compton Open the ORCID record for Mallory E. Compton [Opens in a new window]
Mallory E. Compton*
Affiliation:
Utrecht University, Utrecht, The Netherlands
*
Mallory E. Compton, School of Governance, Utrecht University, Bijlhouwerstraat 6, Utrecht 3511ZC, The Netherlands. Email: m.e.compton@uu.nl
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Abstract

Rising economic insecurity in recent decades has focused attention on the importance of social welfare programs in managing household financial stability. Some governments are more effective than others in managing this outcome, and informal social institutions help explain why. Social capital is expected to shape economic security through multiple mechanisms, but whether the effect is to magnify or mitigate volatility is an open question. Part of the answer has to do with how social capital interacts with policy implementation, and whether it conditions the effectiveness of government spending. Evidence from the U.S. states from 1986 to 2010 fails to support a benevolent social capital thesis—not only is social capital associated with greater economic insecurity, there is no evidence that it improves social welfare effectiveness. However, greater spending on some social programs can mitigate the adverse impact of social capital on economic security.

Keywords

social capitalsocial welfare policyeconomic insecuritypublic policypolitical economy
Type
Research Article
Information
State Politics & Policy Quarterly , Volume 18 , Issue 3 , September 2018 , pp. 215 - 245
Copyright
Copyright © The Author(s) 2018

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