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Social capital in historical perspective: a principal components approach to international measurement and its economic implications, 1870-2000

Felis Rota, Marta (2008) Social capital in historical perspective: a principal components approach to international measurement and its economic implications, 1870-2000. PhD thesis, London School of Economics and Political Science.

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The thesis proposes measuring social capital by means of Principal Components Analysis (PCA) and presents international social capital estimates for the late-nineteenth century in the form of a Social Development Index (SDI) for 1870 and 1890. The analysis is based on a nineteenth-century international database containing a wide range of socio-economic variables. These indicators are compared to midtwentieth century social indicators, facilitating the study of the evolution of social capital in the nineteenth and twentieth centuries. One of the conclusions that arise from the PhD thesis is the persistence of social indicators in the medium term. In the very long run, a significant decline in the relative position of the Western European countries and the United States is found. The new series are then used as empirical evidence to show that comparative social evolution trajectories can improve economic performance predictions. In fact, the results show that the relationship between social development and per capita income already existed in the late-nineteenth century. This relationship upholds after controlling for foreign trade volume and structure, urbanization, education, quality of institutions, political stability, government expenditure, population growth, and climate. Finally, the thesis presents an application of the proposed SDI into an Economic Geography framework. In particular, it shows how a better definition of the formal and informal institutional setup can help testing economic geography hypothesis on international trade. In order to do this, indicators of access to markets are calculated for 1994 and other benchmark years going back to 1962 making use of bilateral trade data. Then, the proposed alternative socio-institutional measures illustrate how the importance of access to markets is not unconditional on the institutional setup. Poor government effectiveness undermines the positive benefits of geographical location. Only when a country reaches a certain threshold of institutional quality can it effectively benefit from location.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, History, Sociology, Social Structure and Development
Sets: Collections > ProQuest Etheses
Departments > Economic History

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