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Article of the Week about

(CC) Map diagram: Robert D. Putnam
Estimated state by state distribution of U.S. social capital, Robert Putnam, Bowling Alone, (2000), p. 293

Social capital is an interdisciplinary social science concept that brings together aspects of social behavior, such as trust and cooperation, relationships, networks and social solidarity that may be expected to contribute to the well-being of a community. In the past decade, sociologists, economists, political scientists, economic and community developers and assorted other applied social scientists working with nonprofit and nongovernmental organizations as well as governmental bodies, financial institutions, like the World Bank and others, have sought to harness what they see as a very powerful idea.

To date, the results of those efforts are unclear. Authors in non-economic disciplines have generally limited their efforts to linking variables like trust and networks of social ties to social or political outcomes, while many economists remain skeptical of the qualitative nature of the activity. There have been attempts to quantify the influence of social capital upon community achievements, but there is no agreement concerning how to measure the economic contributions of dimensions like trust or the strength of social ties, or the weight that should be assigned to these components, and there have been reservations about the validity of any attempt to aggregate them. (Read more...)

New Draft of the Week about

A debt is anything that is owed, and being in debt is the state of owing something to another. There are moral debts, such as debts of honour and debts of gratitude, but the most obvious form of debt in most people's minds is economic or financial debt, when one party owes goods, services or more often, money, to another. Individuals, households, corporations and even nations can be in debt. Debt can be entered into voluntarily, or it can be thrust upon one. Whether debt is seen in a positive or negative light is largely a question of how debt is managed; issues surrounding debt and particularly how the debt is incurred and the terms under which money is lent and repaid, have legal and moral ramifications.

The terminology of debt

A voluntary loan agreement may be presumed to give benefits to both borrower and lender, and to have no direct effect on other parties. A loan benefits the borrower at the expense of the lender, in return for which the borrower may be expected to compensate the lender by the payment of an additional sum of money ("interest"). The agreement may also be expected to take account of the possibility that the borrower may fail to repay the loan ("default" upon its terms) by failing to fulfill its obligations concerning the payment of interest or the return of the original payment (termed the "principal"). The agreement may include the provision of "collateral", which will give the lender title to (ownership of) an asset belonging to the lender, if the borrower defaults (the term "mortgage" may be used if the asset is property). Alternatively, or in addition to the provision of collateral, the agreed interest rate may embody a "risk premium" in addition to the appropriate "risk-free interest rate". The date on which a debt is due to be repaid is termed its "maturity" date, the term "roll-over" refers to the replacement of a matured debt by another of similar value, and a "revolving debt" is one which is automatically rolled-over whenever it matures. (Read more...)