Collective efforts and cooperative action have been a part of human behaviour right from the early days of civilisation. Gradually such collective action led to the formation of small habitations, communities, villages and thereafter large cities and metropolises. They, in turn, created complex social groups and governmental organisations. In the course of time, government and society became too big and formalized and somewhat distant from the common man. Thus evolved a need for mutual networking and interaction for solution of issues.

The term ‘Social Capital’ was first used by L.J. Hanifan, a State Supervisor for Rural Schools in Virginia in 1916. He used it in the context of the community’s involvement in the successful running of schools. As a concept, it received entry in social science literature in the 1980s. Soon it assumed an economic connotation and came to be accepted as a factor of production in the development theory. It refers to those institutions, relationships, and norms that shape the quality and quantity of a society’s interaction. It consists of trust, mutual understanding, shared values and behaviour that bind together the members of a community and make cooperative action possible. The basic premise is that such interaction enables people to build communities, to commit themselves to each other, and to knit the social fabric. A sense of belonging and the concrete experience of social networking (and the relationships of trust and tolerance that evolve) can bring great benefits to people.

Social capital now stands accepted as a necessary element of development theory. In many cases, it provides a cogent explanation for the failure of economic policies. The notion that a set of macro-economic policies supported by appropriate institutions would necessarily transform an economy often does not work in actual practice. Policies and institutions operate in an ensemble which is strongly conditioned by sociological parameters. Socio-cultural elements influence political and economic factors to behave in ways that considerably change the pace of the economic processes. Social Capital and Trust are elements of cohesion in society and entrepreneurship and are vital for setting in processes that expand social, economic and political opportunities. They lead to the formation of specialised groups and organisations generally known as Social Capital Institutions or the Third Sector. Theoretically, social capital organisations are supposed to play four crucial roles in society

(i) The Service Role:- It encourages people to cope with a public problem at the primary level. People tend to let non-profit organisations lead the way in responding to critical public needs. The non-profit sector thus functions as a first line of defense, a flexible mechanism through which people concerned about a social or economic problem can begin to respond, without having to convince a majority of their fellow citizens that the problem deserves a more general, government response. Non-profit organisations are also available to sub-groups of the population who desire a range of public goods that exceeds what the government or society is willing to support. Non-profit organisations have a readymade role in planning hospitals, universities, social service agencies and civic organisations.

(ii) The Value Guardian Role:- The role of the non-profit sector is to function as a “value guardian” in society, as exemplar and as embodiment of a fundamental value emphasizing individual initiative for the public good just as private economic enterprises serve as vehicles for promoting individual initiative for the private good. In the process, non-profit bodies foster pluralism, diversity and freedom. These values go much beyond purposes such as improving health or enhancing school enrolment. They are important as expressions of what has come to be regarded as a central feature of modern society – a sphere of private action through which individuals can take initiative, express their individuality, and exercise freedom of expression and action.

(iii) The Advocacy/Social Safety-Valve Role:- Non-profit organisations also play a vital role in mobilizing public attention to societal problems and needs. They are the principal vehicle through which communities can give voice to their concerns. In fact, most of the social movements that have animated western society over the past century – the movement for women’s suffrage, protection of civil rights and the initiative to protect environment, all took shape within the non-profit sector. By highlighting social and political concerns, by giving voice to under-represented people and by integrating these perspectives into social and political life, these organisations function as a kind of safety-valve that helps to preserve democracy and maintain a degree of peace in the contemporary polity and society.
(iv) The Community Building Role:- Finally, non-profit organisations play a vital role in creating and sustaining social cohesiveness through bonds of trust and reciprocity that seem to be pivotal for a democratic society and a market economy to function effectively.

There are several ways in which social capital can improve government performance.First, it can broaden government accountability; government must be responsive to citizens at large rather than to narrow sectarian interests. Secondly, it can facilitate agreement where political preferences are polarized. Thirdly, it induces innovation in policymaking. Finally, it enhances the efficiency of delivery of many services at the local level through the involvement of residents.

Accountability of the government is the most important means by which social capital influences performance. Trust and civic-minded attitudes can improve governmental performance by affecting the level and character of political participation, reducing “rent-seeking” and enhancing public-interested behaviour.

Social capital can bring convergence among different players on important issues. Political leaders in the developed regions are more willing to compromise with the views of opponents. Where trust and norms of reciprocity are stronger, opposing sides are more likely to sit together and resolve their disputes. On the other hand, where fewer citizens are motivated by a sense of civic obligation to stay informed and to participate in political life, the chances of a dispute settlement between two opposite sides become weak.

Social capital also leads to greater innovation and flexibility in policymaking. The more civic regions are far more successful than the less civic regions in responding to problems and challenges of the community and the State.
Public service delivery can be efficiently administered, if social network groups are in operation and they mobilise people around common issues. Women’s Self-Help Groups / Micro-Credit Institutions in Andhra Pradesh and Tamil Nadu and Kudumbashri in Kerala are fine examples of collective participation which have led to better implementation of development programmes in these States.

In concrete terms, the growth of social capital leads to evolution of a healthy civil society manifesting as a distinct entity in the space between the public sector (government) and the business (markets) – often called the third sector or non-profit sector. Depending on the strength and vivacity of civil society, third sector organisations can assume the following four major forms:-

(a) Small community-based initiatives with modest funding e.g. Resident Welfare Associations. Such a network is usually dependent on pure voluntary action of the group. But, if the group seeks to expand its activities, it will need external financial support.

(b) Large structured groups with well defined organisational patterns and goals. They do not have an apparent profit motive, but generally work on a financially sustainable basis. Such an organisation does have a financial base of its own, but often gets considerable support from external agencies as well e.g. Societies, Trusts, and Waqfs.

(c) There is a third category which is in business, but for certain well defined social objectives. In such organisations, surpluses are ploughed back and reinvested in the activity itself. They may need to interact with the government also e.g. Cooperatives.

(d) The fourth set of social capital institutions are regulatory professional groups/ associations consisting of qualified people who join together to run their profession in accordance with certain laid down principles and policies e.g. the Bar Council of India and the Institute of Chartered Accountants.

Though social capital as an element of human entrepreneurship came into focus in the western world only during the last two decades, cohesiveness and community institutions have been part of life and culture in our country right from the early days of Indian civilisation. The archaeological remains at Mohenjodaro and Harappa indicate the existence of an advanced form of community life where people were linked extensively both socially as well economically with one another. The management of village commons, streets, irrigation tanks, ponds etc. was based primarily on a spirit of cooperation and mutual assistance. The Maurya and Gupta empires saw the emergence of effective community organisations in the form of Sabhas and Village Councils, where local citizens could sort out many of their problems through mutual understanding and consultation. In the far South, it was the Sangam era lasting for about seven centuries between 200 BC to 500 AD when the first signs of organised inter-community and intra-community systems and the concept of State sector appeared. During the later periods, under the rule of the Chalukyas, Pallavas, Cholas and Pandyas, merchants, artisans and peasants jointly participated in the activities of the ‘nadu’ and ‘periyanadu’ and created a new community and social formations that were explicitly visible till as late as the 15th century under the Vijayanagar rule.

Through the rise and fall of empires, this environment of mutual interaction and cooperative behaviour continued and to a large extent it may be given the credit of sowing the seeds of social and cultural nationalism across the sub-continent.

In its terms of reference pertaining to “Social Capital, Trust and Participative public service delivery”, the Commission has been specifically required to look into the following:

a) Ways of investing and promoting social capital at all levels of government as an instrument of enhancing governmental effectiveness.

b) Improve and strengthen the capability of the administration to proactively partner with the local community, particularly in remote areas.

c) Better synergy between the government and the Civil Society Institutions.

d) Increase the people-centric ness of the administrative approaches.

e) Ensuring greater involvement of people’s representatives and the community at large in the conceptualisation and execution of programmes.

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