7/27/2019 Five Types of Capital

1/4

Five Types of Capital

The aim of Bridge to the Future is to develop a practical model for communities. As partof this work, we are trying to formulate assays for evaluating renewal and sustainabilityat various stages of intervention.

The comprehensive community renewal index makes use of five types of capital(human, social, political, economic and infrastructure). At the starting point, are used toidentify the changes necessary, and to monitor the effectiveness of the variousintervention processes until their completion (and afterwards).

Experience has taught us that the different types of capital are interconnected and affectone another. For example any attempt to strengthen the human capital (theemployment of women), that does not take the social capital into consideration (theextent to which the community is prepared for women to work outside the community),may well cause the project to fail. There are also many other links, such as the effect of

access to transportation (infrastructure capital) on the community's sense of belongingto the country and to the region (social capital).

The premise on which the model is based is that a well-established communitymanages its affairs, while maintaining a balance between types of capital, and canindependently strengthen each of the types of capital in a way that affects the othertypes.

Following is a conceptual diagnosis of the five types of capital:

Human Capital

This term relates to the extent to which every individual in the community is realizing hispotential. This capital includes observation of the individual's ability, the sum total of theknowledge, talent, ability and attributes that enable a person to attain personal, socialand economic wellbeing.

Human capital puts the emphasis on individual development, making the most of one'sabilities and the maintenance of permanent frameworks to promote this.

Social Capital

The term social capital includes:

Relationships between individual members of the community.

Characteristics and behavior patterns of a social organization (values, beliefs andnorms) and social relationships that enable cooperation and action for the benefitof all.

Social relationships between individuals that enable community building, the

fostering of involvement, and the development of trust and solidarity betweencommunity members.

7/27/2019 Five Types of Capital

2/4

Social capital relates to the relationships between individuals, that is, to the social linksand norms of mutuality and trust between members, as they develop in social networks.The development of trust affects the other types of capital and has proved to beessential to any improvement in the education level, to the reduction of crime and toeconomic success.

The main values of social capital

trust, sense of community, solidarity.

A distinction is made between several types of social capital, and every community liesalong a continuum for each of these types:

Bonding: The continuum that measures the social cohesion of groups within thecommunity and their openness to the inclusion of members in the group or theirdeparture from it. This element expresses, among other things, the willingness tovolunteer, to work in the community and the responsibility of individuals in thecommunity towards other individuals.

Bridging

Moves along the continuum between being highly willing to foster dialogue,consensus and cooperation between groups in the community and closed groups thatare not prepared for any dialogue between them.

Enabling The level of freedom that groups in the community allow their members asopposed to the duty of obedience expected from an individual in the group. Thiselement affects, among other things, the ability of community activists to mobilize, adhoc, members of the community for promoting social and community issues.

Our experience in the field has shown us that this is the most important capital and thatit has the greatest effect on the other types. Its influence is greatest on the humancapital (the community's openness to accept what is different and to the individual'spersonal and economic fulfilment). It also has extremely strong links with the politicalcapital. In effect, in no small number of cases, the political capital is the reflection of thesocial capital.

Economic Capital

Economic capital evaluates the current state and potential of:

The community's economic assets: the existence of economic infrastructures like

industrial areas in addition to unexploited economic potential, like natural resources andminerals, academic and research institutions etc. The collective economic assets of theindividuals: employment structure, human capital from the aspect of salaries andprofessional distribution.

The economic "import" and "export" patterns of the local residents. That is, what are itspatterns of consumption: do most of the residents make their purchases within thecommunity (import) or outside it, and how much money do local authority residentsmake from the purchases of those who live outside the community (export). It can besaid in general, that in a disadvantaged community, the greater the flow of money intothe community and the smaller the flow of money out of the community the greater thecommunity's existing economic capital and economic strength.

The financial state of the local authority

7/27/2019 Five Types of Capital

3/4

The authority's ability to recruit resources

From the community through compulsory taxes and the community's ability andwillingness to invest additional economic resources. The existence of an effectivemechanism for dealing with the recruitment of government and third sector resources.

Political Capital

Reflects the array of political forces within the community and the ability of these forcesto conduct an effective dialogue between them. One of the main characteristics ofdisadvantaged communities is that community stagnation and the inability to moveforward are not only attributable to despair and a sense of lack of ability, but are theresult of strong internal political forces working against each other and incapable ofreaching agreement on practically anything.

This situation leaves the community at a point of convenience a balance between

powers

that is for the most part bad for everyone and the community, with every shift(even a positive one) in it, upsetting the political balance and leading to opposition.

Political capital is measured, among other ways, by:

The community's political stability as reflected, among other ways, in elections tothe local authority and the ability of coalition and opposition parties to cooperatewith each other, in matters important to them both.

The pattern of fairness and the index of political corruption in the community andthe ability of the elected authority to look after the interests of the community as awhole, and not only the narrow interests of their electors.

The amount of political influence of individuals and groups within the communityto effectively represent their needs and interests to the central authority.

In the local authority's departments:

The ability of departments in the authority to hold a professional dialogue and tocooperate with each other.

The ability of the permanent institutions to conduct an open dialogue with theresidents in a cooperative and non-paternalistic manner.

The level of employment stability of workers in the authority and the ability of itsdepartments to select workers based on their ability and suitability and not ontheir political affiliations.

The ability of the authority's departments to make long-term plans and to executethem while striving for constant improvement.

The departments' ability to recruit and use resources effectively.

The strength of the political capital is assessed in the following ways:

By the ability of the authority to formulate a vision, to define objectives and toachieve them with a broad consensus.

By the ability to manage complex situations and reach agreement so as to makeimportant decisions and follow them through.

By the attitude of residents to the authority and the permanent institutions.

The main element of political capital is broad agreement.

7/27/2019 Five Types of Capital

4/4

Note this capital, its definition and the indexes for evaluating it are at the R &D stageas part of the renewal model being developed by Bridge to the Future.

Infrastructural capitalThis capital reflects:

The overall potential of the natural infrastructures, like nature and scenery,minerals etc.

All the physical infrastructures, like transport, water, sewage and electricity.

Planning infrastructures, like the existence of an up-to-date outline plan for theindustrial areas, tourism and development, as well as family and individualaspects, like building permits for private houses, the size of plots, buildingheights etc.

Regional infrastructures infrastructures in nearby regions available for use by

residents of the region. Physical communal infrastructures like cultural, sport, educational and higher

education facilities.

Possible implications: many people are unaware of the enormous influence this capitalhas on other areas. For example, the best pedagogical plan can fail because of the lackof a physical infrastructure of educational buildings. The extent to which transportationis available in the community can greatly affect the potential for demographic growth,the ability to find employment outside the region etc.