The term “Social Capital” was originally used as a metaphor to describe activities that strengthen community cohesion, such as social gatherings for constructive purposes. ^{23, 24} Although this view laid the theoretical foundation, CS remained underdeveloped as an academic concept until the contributions of authors such as Coleman and Bourdieu.

Reference [ 25] defined CS as a resource derived from interpersonal relationships within a social structure, highlighting how these connections enable the achievement of individual and collective goals. According to this approach, CS emerges from the actions of individuals interested in maximizing personal benefits within an established normative framework. ²⁶

On the other hand, ²⁷ introduced a more structuralist perspective, arguing that SC depends on the tangible and intangible resources that groups and communities use to improve their living conditions. According to Bourdieu, the transfer of intangible resources, such as trust and social cohesion, is crucial to ensure the continuity of economic and social development between generations.

Reference [ 28] expanded the concept to include structural features such as norms, social networks and trust, which facilitate cooperation for collective benefit. In addition, he stressed that CS generates positive externalities, not only for the individuals involved, but for society as a whole, which makes it a strategic resource for economic development.

The social capital theory of Bourdieu ²⁷ and Coleman ²⁶ who conceive this concept as a resource accumulated by individuals through their interpersonal relationships. Bourdieu ¹⁷ defines social capital as the set of current and potential resources linked to the possession of a durable network of more or less institutionalized relationships of recognition and reciprocity. ²⁹ In this framework, social capital is an asset that individuals can use to improve their socioeconomic position, facilitating access to economic, employment and educational opportunities, ²⁵ for his part, conceptualizes it as a structure of relationships that favors cooperation and efficiency in collective action, allowing the reduction of transaction costs and the optimization of economic behavior. This approach has been criticized for its emphasis on individual agency, leaving aside structural constraints and the role of institutions in the formation of social capital. ^{30, 31}

From a structural perspective, social capital is understood as an emergent phenomenon of interaction within social networks, where the density of ties and group cohesion determine its impact on economic development. ^{32– 35} Introduced the notion of “the strength of weak ties,” arguing that indirect connections may be more valuable than close relationships for accessing information and economic resources. ^{36, 37} Building on this approach, ³⁸ develops the theory of “structural holes,” emphasizing that the position of an individual or entity within a network influences its ability to generate value through social capital. This perspective emphasizes that the pre-existing social structure conditions access to economic opportunities and entrepreneurial success, as dense networks favor trust and cooperation, while fragmented networks can limit the flow of information and resources. ² In South America, recent studies have shown that the cohesion of community networks impacts the economic resilience of vulnerable sectors, reinforcing the relevance of structural social capital in contexts of inequality and social exclusion. ³⁹

In the South American context, social capital is deeply influenced by historical inequalities and institutional weakness. ¹² For example, in countries such as Brazil and Colombia, social networks have been used both to foster community cooperation and to perpetuate clientelistic practices that reinforce the exclusion of marginalized groups. ⁴⁰ In addition, lack of trust in public institutions, resulting from high levels of corruption and lack of transparency, has eroded the capacity of social capital to generate inclusive economic benefits. ^{41, 42} In contrast, countries such as Uruguay have managed to strengthen social capital through public policies that promote equity and citizen participation, which has had a positive impact on their economic development. ⁴³

For his part, ⁴⁴ argues that formal institutions (laws, regulations) and informal institutions (norms, cultural values) condition the accumulation of social capital and, therefore, its impact on economic development. From this perspective, ¹⁰ argue that social capital flourishes in societies with inclusive institutions, where norms guarantee equitable participation in economic activity and reduce incentives for opportunism and corruption (ECLAC 2022). In South America, institutional weakness has been identified as a factor limiting the positive impact of social capital on economic growth, as lack of trust in public institutions and high perceptions of corruption can erode cooperative networks. ⁴⁵ This approach highlights the need to consider the interaction between social networks and institutional structures to understand the true potential of social capital in the region’s economic development. ⁴⁶

In this regard, the measurement of social capital represents a significant methodological challenge due to its multidimensional nature and its reliance on difficult-to-measure constructs, such as trust, social networks and norms of reciprocity. The lack of consensus on a universal definition has led to a proliferation of divergent approaches, from survey-based indicators to observable behavioral metrics. ⁴⁷ While some studies have adopted subjective measures, such as perception surveys on interpersonal trust and civic engagement, others have turned to objective approaches, such as associationism rates or network density. However, these differences in measurement generate comparative biases and limit the external validity of the studies, making it difficult to generalize the results. ⁴⁸ Moreover, endogeneity remains a persistent problem, as causal relationships between social capital and economic growth may be mediated by omitted factors, compromising the robustness of empirical findings. ^{24, 49}

In this context, reconciling contradictory findings in the literature requires a more systematic approach. There are discrepancies that can be attributed to variations in institutional and cultural contexts, as well as differences in levels of analytical aggregation (individual, community or national). The heterogeneity in the effects of social capital suggests that its impact is neither homogeneous nor linear, but depends on complementary factors, such as the quality of institutions and human capital development. ⁵⁰

From a theoretical perspective, social capital is linked to economic growth through three fundamental mechanisms: the reduction of transaction costs, the generation of trust and the promotion of cooperation in economic activity. ³⁵ At the macroeconomic level, social trust and reciprocity have been identified as determinants of market stability and investment attraction. ^{51, 52} From an empirical approach, various research has shown that countries with higher levels of social capital tend to exhibit more sustained and equitable economic growth. Recent studies have found a positive correlation between interpersonal trust and Gross Domestic Product (GDP) per capita in emerging economies, suggesting that greater social cohesion boosts productive efficiency and innovation. ⁵³

In the specific case of Latin America, social capital can be a key factor in facing economic crises and promoting more inclusive growth models. Recent research suggests that strengthening social capital in local communities favors the implementation of more effective and sustainable public policies by encouraging citizen participation and co-responsibility in resource management. ⁵⁴ Thus, experiences such as those of Brazil and Chile have shown that the strength of community networks can compensate for institutional deficits, fostering cooperation between the private and public sectors to improve economic governance. However, to maximize these positive effects, it is essential to complement social capital with institutional reforms that guarantee transparency and reduce corruption. In this way, social capital would not only contribute to economic growth, but also strengthen democratic stability and social cohesion in the region, consolidating a solid foundation for sustainable and equitable development ^{55, 56}

The main characteristics of the elements of social capital in each country are identified and described. This analysis makes it possible to interpret trends and changes over the period studied (2007-2023), providing a comparative overview of the elements in the different countries.

To analyze the relationship between social capital and economic growth, an econometric approach based on instrumental variables models will be used. First, the Durbin-Wu-Hausman test will be carried out to detect possible endogeneity problems in the explanatory variables, particularly in the measures of social capital. In the case that the presence of endogeneity is confirmed, estimation will proceed by means of a Two-Stage Ordinary Least Squares Model. In the first stage, the selected instrumental variables will be used to estimate the predicted values of the endogenous variables. In the second stage, these predicted values will be incorporated into the structural equation of economic growth to obtain unbiased and consistent estimates.

The first element of social capital, called Social and Family Relations, is composed of two indicators: the percentage of people who feel that they can count on the help of friends and family in case of problems, and the percentage of people who perceive that their family environment transmits positive energy to them. Using these indicators, a score is calculated from 0 to 100, with 0 being the worst scenario and 100 the best. With the data obtained from the scores, Figure 1 was created, which makes it possible to identify how social and family networks have evolved in each South American country in the period 2007-2023, offering a panoramic view that makes it feasible to compare countries in this region of the world which, despite being a continent that shares several social and cultural characteristics, shows quite considerable differences with respect to the element analyzed.

Figure 1 shows marked differences between South American countries in this component. While Argentina consistently leads with the highest values, Peru is positioned as the country with the lowest scores, reflecting a lower perception of social and family support among its population. These discrepancies suggest the influence of cultural, economic and political factors that shape the social dynamics in each country.

To deepen the analysis, a table of statistics was used to identify significant variations between specific years and common patterns within the region. The stability observed in countries such as Argentina contrasts with fluctuations in other nations, highlighting the need for policies aimed at strengthening the social fabric in the most vulnerable communities.

The third key element of social capital, Interpersonal Trust, measures two indicators: the perception of trust in the immediate social environment and people’s willingness to selflessly help others. The data reveal that this dimension presents the lowest values among the analyzed elements of social capital, with scores that do not exceed 45 points on average at the regional level.

The series shows significant volatility in countries such as Ecuador and Paraguay, suggesting an unstable perception of social trust in these contexts. In Ecuador, the peak reached in 2009 contrasts with abrupt drops in subsequent years, linked to adverse economic and political events. Specifically, the economic recession that began in 2012, the fall in crude oil prices and the increase in public debt generated a climate of social discontent that derived in multiple protests and distrust towards institutions. ⁵⁸

These results, shown in Figure 2, highlight the need to promote policies that strengthen social cohesion and inter-individual trust, particularly in contexts of economic instability.

Social and civic participation, another fundamental element of social capital, includes indicators related to donating to charities, electoral registration, volunteering and expressing opinions to public officials. At the regional level, as shown in Figure 3 the scores are notably low, with an average of less than 55 points. In 2015, Ecuador presented the lowest value recorded (15.4 points), evidencing a critical lack of participation in civic activities. This problem is mainly based on the great inequalities that exist between inhabitants of the same country who, despite sharing several social and cultural characteristics, do not have the same opportunities. In this sense, each citizen is inserted into political life in a different way, in many cases guided by their life stories, their economic conditions, the level of education to which they had access and the influence of the social environment.

Low levels of participation are associated with structural inequalities, economic constraints and a low perception of political efficacy among citizens. In addition, factors such as the lack of volunteer training programs and recurrent economic crises aggravate this problem. The absence of government support for community initiatives limits the development of a culture of civic engagement in the region. ⁵⁹

Social Tolerance, measured through indicators such as acceptance of ethnic groups, LGBT communities and migrants, shows a positive trend compared to other components of social capital. Uruguay consistently leads in this aspect, with scores that reflect high levels of inclusion and social cohesion.

Uruguay’s leadership in this dimension is explained by its strong middle class, low incidence of extreme poverty, and a progressive legislative framework that has strengthened the rights of historically discriminated groups. ² These policies have allowed Uruguay to stand out as a model of equity and inclusion in South America.

An important achievement in this part of the world is characterized by nations with large socioeconomic gaps between social groups. In this regard, in recent years Uruguay has passed new legislation to provide protection and prominence to groups that have historically been discriminated against. The country is currently leading the region in the implementation of reforms that promote the rights of LBGT groups, citizens with disabilities and Afro-descendant ethnic groups, as shown in Figure 4.

The results in Table 1 the model presents a high explanatory power, with an R-squared of 0.9991, suggesting that almost all of the variability in the dependent variable is explained by the independent variables. Furthermore, the F(6,146) = 28019.62 test with a p-value = 0.0000 indicates that the model as a whole is highly significant. However, the high precision of the fit suggests the possibility of collinearity, which could be influencing the estimated coefficients.

The analysis of Table 2 presented reveals a significant endogeneity problem in the estimation of the regression model. A first clear indication is the coefficient of determination, which implies that the model explains 100% of the variability in the dependent variable. The coefficient associated with the auxiliary regression residuals variable (Resid) is significant, indicating that the auxiliary regression residuals are highly correlated with the dependent variable, confirming the existence of endogeneity. In addition, the coefficients of the explanatory variables present extremely large values or close to their own confidence limits. The magnitude of the coefficients, especially that of “social capital” (18.16585) and the constant (_cons = 127.25), reinforces the suspicion that the model is misspecified.

The problem of endogeneity in studies on social capital and economic growth is particularly relevant because many of the explanatory variables, such as social networks, interpersonal trust and social participation, can be simultaneously determined by economic factors. This generates a bidirectional causal relationship, where social capital influences economic growth, but also economic growth affects the formation of social capital.

In Table 3 the Ordinary Least Squares (OLS) model in its first stage presents a highly explanatory regression with an R-squared of 0.9991, indicating that the model explains 99.91% of the variability in the dependent variable. Furthermore, the adjusted R-squared value is the same, suggesting that the inclusion of the explanatory variables does not introduce overfitting in the regression. The F-statistic (28019.62) is extremely high, with an associated probability of 0.0000, indicating that, taken together, the explanatory variables have a significant impact on the dependent variable.

Regarding the coefficients of the variables, it is observed that social capital has a positive coefficient of 4.994, suggesting that an increase in this variable is associated with a significant increase in the dependent variable. This result is statistically significant (p = 0.000), with a narrow confidence interval between 4.964 and 5.024, which reinforces the robustness of the finding.

On the other hand, variables such as interpersonal trust, family and personal relationships, civic social participation and social tolerance present negative and highly significant coefficients (p = 0.000). In particular, social tolerance has a coefficient of -3.803, which implies a strong negative effect on the dependent variable. This result could be interpreted to mean that certain forms of social interaction, when accompanied by distrust or closed relationships, can hinder economic growth or social development. Economic quality is not statistically significant (p = 0.367), suggesting that its effect on the dependent variable is inconclusive in this model.

Table 4 shows the OLS model which reports a statistic F(5, 147) = 5.21 with an associated probability of 0.0002, indicating that the set of explanatory variables has a significant joint effect on the dependent variable. However, the R-squared is 0.1506, suggesting that the model explains only 15.06% of the variability of the dependent variable. Although the adjusted R-squared (0.1217) is lower, it suggests that some variables contribute to the model, but the model still has low predictive power.

Family and Personal Relationships has a positive coefficient of 0.0603, but its p-value (0.495) indicates that it is not statistically significant. This suggests that there is not enough evidence to affirm that this aspect of social capital influences the dependent variable.

For Interpersonal trust its coefficient is -0.1397, with a p-value of 0.049, indicating statistical significance at 5%. Since the confidence interval is completely in the negative range (-0.2787 to -0.0007), it can be concluded that higher interpersonal trust could be associated with lower economic growth in this context, which is contrary to standard theory and could be due to indirect effects or measurement problems.

The Civic Social Participation coefficient is 0.2185, with a p-value of 0.001, indicating a positive and statistically significant relationship. This suggests that a higher level of participation in civic social activities is associated with higher economic growth, aligning with the literature that highlights the importance of social cohesion and collaboration in economic development.

Social Tolerance has a positive coefficient of 0.1124 and a p-value of 0.038, suggesting a positive and significant relationship with economic growth. This finding reinforces the idea that more tolerant societies can generate higher levels of cooperation and development.

Social Networks (instrumentalized variable) presents a negative coefficient of -0.3796 with a p-value of 0.000, indicating a negative and significant relationship. This result is relevant, as it suggests that social networks (as measured in this model) may be associated with adverse effects on economic growth. Possible explanations include the use of social networks in non-productive activities or the effect of overconnectivity on the dilution of effective social capital.

This model suggests that certain aspects of social capital, such as civic participation and social tolerance, have a positive and significant effect on the dependent variable, while others, such as interpersonal trust and the use of social networks, seem to have negative effects in this particular context.

One of the main strengths of using instrumental variables and two-stage least squares models lies in their ability to address endogeneity problems, which are common in studies on social capital and economic growth, thereby contributing to more consistent estimators. Nevertheless, as with any econometric technique, this approach also has limitations. In particular, the results may be sensitive to the choice of instruments, which requires careful validation to ensure they meet the criteria of relevance and exogeneity. Despite this, the methodology applied is appropriate for the objectives of this study and provides robust evidence on the relationship under analysis.