Bringing Putnam to the European regions: On the relevance of social capital for economic growth

One of the most influential contributions to the study of political culture of the 1990s was Robert D. Putnam's book on the positive impact that interpersonal trust supposedly has on economic welfare and the effectiveness of political institutions in Italy. Making Democracy Work showed in bivariate correlations that progress depends largely on the social capital manifest in the Italian regions. We evaluate this hypothesis in a wider sample of regions by analysing quantitatively the role that political culture has on economic growth in the regions of the European Union (EU). We first develop a neoclassical growth model and incorporate political culture variables into this framework. Our cross-sectional regression results cast some doubts on the generalizability of Putnam's bold claims. The analysis particularly shows, in accordance with standard models of economic growth, that economic rather than cultural factors are the most forceful determinants of growth in the European regions. Only one dimension of political culture, the intensity of social communication, has the expected positive impact.