A Comparison of Social Capital in Rural and Urban Settings

David L. Debertin

David L. Debertin is Professor of Agricultural Economics, Department of Agricultural Economics, University of Kentucky, 400 Ag. Eng Bldg, Lexington, KY 40546-0276 e-mail ddeberti@ca.uky.edu. I am indebted to Dr. Stephan J. Goetz who provided helpful comments on an earlier draft of this manuscript and provided illustrations of how neighborhood social capital operates.


A rapidly expanding literature exists on social capital and its importance to rural and urban communities. Social capital refers to the "...stocks of social trust, norms and networks that people can draw upon in order to solve common problems" (Siranni and Friedland). These networks involve activities of "civic engagement" such as neighborhood associations, service and charitable clubs, volunteerism and the like. In both rural and urban communities, social capital refers to the institutions and mechanisms whereby residents relate to and interact with each other to solve problems for the common good.

This paper examines some of the ways in which social capital networks develop and operate and contrasts the differences between rural and urban settings based on "case study observations" of rural communities and urban subdivisions. A list of potential researchable questions involving social capital is developed and some ideas are proposed for empirically analyzing these questions and issues.

It is widely believed that in neighborhoods where social capital is strong--and, in this instance, those in both rural and urban communities where social networks exist comprising the fabric of social capital--have a very desirable quality of life and have great economic growth potential. In communities where social capital is accumulating, local residents increasingly work with each other to identify problems, share ideas and identify solutions to problems which benefit the entire community. These kinds of activities are essential if communities are to develop comprehensive plans for encouraging economic development. The evaluation of the local community as being either a desirable or undesirable place for employees to live may be an important factor for businesses seeking sites for new facilities.

Sociologists, Economists and Social Capital

Sociologists and economists have taken decidedly different approaches in analyzing social capital issues. Sociologists see social capital from the perspective of how people relate to and form networks with or otherwise interact with each other. In contrast, much of the economic literature has focused on describing social capital by employing series of mathematical equations describing how one person's utility may be influenced by the by the behavior of others The very core of economics is the belief that individuals, acting in their own selfish interest, will, by their selfish actions achieve that which is best for all. The profit motive and utility maximization are inherently "I" oriented. Not surprisingly, then, many economists become uncomfortable when altruistic questions involving "we" rather than "I" are raised. Altruism (that is, the utility of individual i influencing the utility of individual j) is inherent in the concept of social capital. Lynne's discussion of "I" versus "we" provides an excellent overview if this dilemma. An excellent starting point for understanding the sociologists' perspective on social capital can be found by reading the two cited articles by Flora and Flora. In contrast, the economic perspective on social capital is outlined in articles by Robison and Hanson and by Schmid and Robison.

The economic perspective as outlined by Robison and Hanson and Schmid and Robison provides a formalized basis for explaining why individuals interact with each other (to maximize utility) but does little to explain the conditions under which these interactions might or might not take place. The "physical" and other conditions that facilitate the building of social capital are seldom treated by economists and have little place in the economic literature. This perspective is often treated in academic departments that cross disciplinary boundaries such as planning or landscape architecture.

Frequently, sociology becomes more nearly a behavioral science than does economics. In contrast with economics, where interpersonal linkages are often ignored or assumed away, interpersonal linkages form the very core of sociology as a discipline. Of course, most economists would claim to have some interest in human behavior, and even how the behavior of one human being might influence the behavior of others, but only to the extent that it can be described in a relatively small number of mathematical equations. To an economist, sociology by comparison, seems loose, (perhaps unscientific by "our" standards?) and ill-defined.

Still, the sociological perspective that often does a good job of explaining the circumstances under which people do or do not relate to each other, may yet fall short in terms of providing an explanation as to why these linkages may be important to a community which seeks to achieve economic growth and at the same time create desirable places in which to live and work. It remains interesting for an economist (me) to look at the contributions of sociology to the social capital literature.

First, and perhaps most important, sociologists claim there are many stratifications of community connectiveness, and that geographic proximity is only one of them. Communities form at very different stratification levels. For example, work colleagues may geographically live at great distances from each other, but still form social capital (really, a community) as such. Another example is that people who attend a particular church form a community of sorts, built upon shared religious beliefs. In an urban setting, these non-geographic, (non-spatial) networks or communities play a very important role, with the geographic (spatial) communities being less important. In a rural setting, however, there is more of a tendency (likelihood) that the communities based on non-geographic shared interests and values overlap with the geography. In a small rural community, the probability that a neighbor attends the same church as you do is increased, and this would represent an overlap of a community built on a non-geographic basis with a community built on geography.

From a rural community perspective, a decline in social capital could have profound negative consequences for efforts aimed at rural economic development, industrial recruitment and the like, for these social capital networks may be the necessary first step in the evolution of the leadership necessary for achieving economic development. Therefore, a potentially fruitful analytical approach in dealing with issues of rural economic development may be to eventually attempt to combine the two rather distinct approaches toward social capital as employed by sociologists and economists as a means of analyzing why social capital in important to both rural and urban communities as a vehicle for economic growth. Currently, there are over 900 papers and other articles on the internet which deal with some aspect of social capital. The classic work is Putnam's piece called "Bowling Alone" In it, he argues that social capital has declined in many communities and cites as evidence declining memberships in civic and charitable organizations and clubs and groups such as parent-teacher organizations. The title "Bowling Alone" comes from his observation that while the total number of participants (and games bowled) has been increasing, there has been a continuing decline in league bowling. Other authors, most notably Robert Samuelson, the Newsweek columnist and recent best-selling author, has argued that Putnam's thesis of declining social capital is faulty, and while there may be some evidence of declining group involvement, this is more than compensated by expanding civic involvement in other, more productive areas.

Communities and Social Capital Networks

So what exactly is a "community" and how does the concept of community link to the concept of social capital? My dictionary (Webster's II) provides a definition tied to geography ("a group of people residing in the same locale and under the same government") as well as a definition that is not geography based ("a group or class sharing common interests"). Both of these definition are clearly intertwined with social capital. Communities built on non-geographic interests may more likely form in middle- and high-income groups than in low-income groups. Among low- income people, communities tend to be more linked to geography, although this is a testable hypothesis.

A community is built on shared common beliefs, values, concerns and interests. Some of these shared beliefs, values and interests revolve around geography--owners of cabins on a small lake form a community based on common interests in boating, fishing or other lake-related sports. Interestingly, shared problems can lead to greater community cohesion, as members of the community act together to prevent an event from occurring thought to potentially be harmful as a group.

To illustrate with a simple example, homeowners associations (a social capital indicator) tend to be inactive if everything is going along ok, but swing into action as community representatives should, say, a zoning change proposal potentially threaten property values. In this instance, the problem becomes the basis for increased community cohesion. The same thing occurs when schools are redistricted, as occurred recently in Lexington. People who formerly didn't know each other became very well acquainted when the threat of school redistricting loomed. Interestingly too, natural or man-made disasters--say a tornado or fire-- often have the consequence of bringing people in communities together.People tend to behave as individuals when they do not feel they are being threatened or when the problems they face do not require group action.

A community can be thought of as the womb in which social capital grows. Without communities, there would be no social capital (but without social capital, community disintegrates?). So looking at the role of social capital in rural community development invariably becomes the question of what is social capital and how is it formed? This, in turn, leads directly to the question of what makes some rural (and urban) communities work (high social capital) and others not (low social capital)?

Social capital networks evolve in a number of different ways, and sociologists are quick to point out that these networks are often very different in urban than in rural communities. Social capital networks, that is, the linkages which permit people to relate to each other to solve common problems, can be broadly categorized as geographic or non-geographic. Social capital networks of a geographic and a non-geographic nature exist both urban and rural communities, but their relative importance varies.

Geographic Social Capital Networks

An example of a geographic social capital network in an urban setting is a neighborhood, or subdivision. Home buyers usually search for homes in locales described by others as "good" or "nice" neighborhoods. Residents living in a particular location within an urban community are often tied to their neighbors by the geography of where they live. Most often, in urban communities, this geography is also a part of economic and social class, employment and the like.

For example, in an urban setting, it is likely that highly-paid business executives, successful entrepreneurs. doctors and lawyers will tend to live in certain subdivisions or neighborhoods-- those with comparatively high-priced homes and well-manicured lawns. Those lower on the economic and social ladder, say teachers, or those engaged in other "medium-income" white- collar occupations, live in somewhat less upscale, though still "good" neighborhoods. Traditional blue-collar neighborhoods are inhabited by those with high school educations or less, again with networks of shared interests and values. Still, these also can be "good" neighborhoods.

Many of the problems traditionally associated with low-income and public housing areas of urban communities relate directly to the breakdown of social capital networks that form the fabric of most other neighborhoods where incomes are somewhat higher. But it is important to recognize also that social capital networks are not necessarily stronger in high-income neighborhoods than in neighborhoods where incomes and homes are more modest. Indeed, many high-income neighborhoods, with high fences, iron gates and other natural or man-made architectural barriers seemed designed to minimize social interaction and cohesiveness. Moreover, some of the best examples of social capital networks evolve from situations where residents work within neighborhoods of modest means work to improve the community for the common good.

Planners and developers of urban subdivisions have recognized this, and many new subdivisions now feature a community clubhouse, a swimming pool and perhaps tennis courts or other recreational facilities designed to permit social interaction (and with it, social capital formation) within the neighborhood. A few developers are even proposing bolder strategies--for example, in some instances adding retailing space located within walking distance from the homes that could potentially mimic the main street of a small rural community. Developers are not doing this out of the goodness of their hearts: these "retro innovations" suggest that homes can frequently be sold at a higher price if such amenities fostering social capital formation are available. But the highest income neighborhoods are often characterized not only fortress-like yards with high fences, private swimming pools, and other obvious signals that networking with neighbors and particularly those from outside the neighborhood is to be shunned.

As the size of the community becomes smaller, there is less likelihood that social capital will be built around networks of people with similar educational levels, income and housing, and a greater likelihood that people of widely varying education, income and employment skills will meet and interact in social networks. If the rural community is small enough, it is possible that nearly the entire community will function as a single social capital network. This is one feature makes rural communities inherently different from urban settings. Housing in urban communities is usually very segregated by income, education and type of employment. In rural communities, this is less likely, and if the rural community is small enough, people of all income levels and housing values will likely be living in close proximity.

Non-Geographic Social Capital Networks

The second type of social capital is that which is sometimes referred to as a non-geographic network. These are networks of individuals who unite around shared values arising from something other than geographic proximity.

Examples of non-geographic social capital networks might include those built around a shared religion or attendance at a specific church, networks formed around those who work for the same company or business, or networks built around hobbies, clubs, service organizations, charitable organizations and the like--the kinds of organizations embodied in the definition of social capital that Putnam is enamored with. Geographic and non-geographic social capital networks can overlap, for example, if many of the residents of a particular neighborhood happen to attend the same church, for example.

In urban settings, non-geographic social capital networks may tend to predominate geographic social capital networks. Geographic social capital networks may become stronger within an urban neighborhood to the extent that the neighborhood is being threatened by a particular problem of concern to all the residents--an outbreak of burglaries, for example, or perhaps a requested zone change affecting a plot of land adjacent to the neighborhood, or perhaps even a natural disaster such as a flood or wind storm. In such instances, a potential crises brings neighbors together in an effort to work for the common good.

Social Capital in Rural Communities

In rural communities, geographic and non-geographic social capital networks frequently overlap such that it is even difficult to distinguish between the two. Part of the "charm" of living in a small rural community is that each neighbor is usually well aware of what the others are doing. The degree of anonymity most often associated with urban living is often absent in rural communities. Some may argue that the comparative anonymity in urban communities is a plus, not a minus, and that the neighborliness of rural community residents can quickly turn into an undesirable "nosiness" leading to friction.

The concept of social capital and the concept of a culturally sustainable rural community are closely related. For example, it should be possible to measure differences in social capital in paired rural communities. Sociologists would compare social capital by looking at measures such as participation in service organizations such as Kiwanis, parental involvement in PTOs--consistent with Putnam's arguments, as well as other quantifiable indicators. An example of such an indicator might be a survey which collects data on the willingness of people to leave their doors unlocked at night.

Perhaps community sustainability can be subdivided into theree catigories:that is, economic sustainability, ethnic sustainability and cultural sustainability. For social capital to accumulate at the fastest pace, all three factors may need to be present. Social capital often breaks down as jobs are lost in an area, leading to a decline in economic sustainability. As neighborhoods become increasingly ethnically diverse, social capital can break down. Similarly social capital can break down because of differences in culture--a new industrial plant which results in workers of lower incomes and different cultures moving into a rural community, for example.

Economists might see per capita expenditures on items such as police protection in a rural community as a "negative" measure indicating the absence of social capital. In many small rural communities, people don't normally lock their doors and there is no paid police force. Part of this may be a function of the small community size in which everyone knows one other, but also has do with the fact that people within many small rural communities tend to be culturally similar, and have similar values. One doesn't step out of line for fear of being ostracized. It would be difficult to make a living selling home security alarm systems in many small rural communities.

In many small rural communities, homes of widely varying values are often located in comparatively close proximity to each other. This increases the potential for social interaction among people of varying income classes, and increases trust across economic lines. As communities become larger, homes in a similar price range tend to more likely be grouped together, increasing the likelihood that individuals of similar economic backgrounds will interact, but potentially reducing interaction among those of different income levels.

The smaller the town, the more likely houses along streets will be diverse in terms of design, size and price. Rural communities normally could not mimic an upscale suburban community even if they wanted to. However, there are stories of small rural towns near the Chicago suburbs and elsewhere being invaded by wealthy of the city. The city residents find cheap land and houses, clean air and a commute that is acceptably short, come in, buy up land or old housing cheaply, demolish existing homes, and build 3 story neo-victorians in their place, thus changing forever the character of the rural community, and not always for the better, at least according to some. While traditional economic measures suggest that economic development has taken place here as a result of the in-migration, the implications for social capital formation (or perhaps, disintegration) are far less clear.

Social Capital in Urban and Suburban Communities

The presence or absence of social capital is indicated in very different ways in the typical urban community. Subdivisions in urban and suburban communities are frequently designed to contain homes only within a quite narrow price range. Because of this, in many of these communities, the subdivision which an individual lives thus becomes a clear indication of social and economic status and perhaps even political influence within the community. This, in turn, is reflected in public services provided at taxpayer expense. Homes in the "right" neighborhoods are served by the "best" schools, etc.

Drive down the streets of any upscale urban neighborhood, and you see much evidence that represents "shared values" among the community residents. In new housing in upscale developments in Lexington, a limited range of home designs, brickwork colors, brass lanterns ad nauseam, fan windows, and two story entrance foyers with large hanging lights impart the sense of shared values. Members of the community try to outdo each other while at the same time staying within the bounds of what is considered "ok" for the neighborhood according to unwritten, but at the same time, very well recognized, norms.

Do these people share values more profound than in their choice of brickwork and brass coach lanterns? That is an interesting question. Clearly part of the "fun" (utility) for those living in an upscale neighborhood is linked to being able to socialize with people similarly stationed on the economic and social ladder. Residents of upscale neighborhoods derive utility just from knowing they can afford to live in an area that others, by virtue of their lesser economic stations in life, cannot afford, apart from the utility of owning the high-priced home with all its features. This seems a bit ridiculous, and it is. However, to a certain degree, the shared architecture, brickwork and paint schemes bind the geographic community as defined by the subdivision together.

Suburban communities are often criticized for being very impersonal, with even those living in close proximity often not knowing each other well. But since the value of one's home in such a setting is often heavily influenced by the value of neighboring homes, those living in such communities usually pay close attention to any actions by neighbors that could potentially have even a slight negative impact on neighborhood property values. This phenomenon has led to elaborate deed restrictions on individual property owners with respect to what is or is not permitted. Examples include deed restrictions prohibiting detached garages or other similar structures, regulations involving the use of residential streets for overnight parking of vehicles, and similar.

Developers of new suburban locales increasingly formulate rules designed to ensure that the individual homes are similar in both size and design. The most common and widely used of these are restrictions that requires houses to contain at least a certain square footage. But these restrictions in recent years in many communities have become far more elaborate. Examples in residential developments in Lexington include not only square footage minimums, but also restrictions requiring that houses be of a "traditional" design, have a brick exterior, use high grade "dimensional" shingles and even require a mailbox of similar design for all homes.

What these kinds of restrictions say about social capital in such neighborhoods is not always clear. Pools and clubhouses are increasingly popular in new developments, funded by a mandatory private "tax" or "monthly fee" levied on all residents. A neighborhood pool in both rural and urban communities is ordinarily something that is paid for out of tax dollars. The pool becomes a place of social interaction, particularly among young people. At a public pool available to everyone, individuals of widely varying economic and social status may interact. In the case of the "quasi-private" subdivision pool, however, interaction and socialization is largely limited to those of similar social and economic status--that is, those who can afford a similarly- priced home in the same neighborhood. Parents hoping that the socialization of their own children occurs primarily with other children from families who have a similar social and economic status may view this as a plus, but what it says about developing understanding among individuals of varied social, economic and cultural backgrounds is not positive.

Suppose a resident wanted to paint the shutters of a suburban home a weird color, say purple. Chances are, the resident would not do this, for fear of being ostracized by residents who view such a color as tacky and tasteless (unwritten community standards or "norms" appear). The color of shutters sends signals to neighbors that the resident is willing to conform with the rules of the community, both written and unwritten. Interestingly, the more of these rules that must written down as formal covenants governing the use of my property (in this case, "...Shutters may not be painted colors other than black, hunter green, or dark brown without prior approval from the homeowners association"), the lower the level the social capital might be in the neighborhood. In neighborhoods with high levels of social capital, residents will likely conform to a diverse array of unwritten rules representing neighborhood norms--and this does not involve any expenditure of funds for enforcement. If time and energy must be devoted to writing down and enforcing rules, then that means the community has low social capital. Gated communities announce to the world that social capital is low between the residents inside & outside the gate.

Lawyers flourish in communities where the social capital is low. Instead of direct confrontation or social pressure, these people deal with conflicts instead by suing each other. If neighbors like each other, they seldom sue. Lawyers have become wealthy as a group because of the inadequacies of social capital.

Social capital varies greatly from one residential neighborhood to another, even in a city the size of Lexington. In some of the low-income public housing areas, it is clear that social capital has completely broken down. The local police could quickly determine the locales of high versus low social capital, because the bulk of police resources are allocated to beats where the social capital level is low.

Race and ethnicity remains part of the social capital equation, despite efforts by planners and public officials to encourage social interaction across races and ethnic groups and efforts directed toward fair housing laws. Those of the same race or ethnic group tend naturally to form social capital networks that are frequently stronger than the networks which cross racial and ethnic lines.

With a few exceptions, ethnically diverse areas tend to have low social capital, in that social capital necessarily involves interactions among all the people in the community. Ethnically and income-diverse communities, while an interesting concept from the perspective of the goals of social planning, remain elusive in most communities, both rural and urban.

To further illustrate, the town of Reston, VA was initially established to accommodate people at a wide variety of income levels all living in close proximity to each other, with housing affordable by low-income people intermingled with the high-income housing. But Reston never really evolved as social planners envisioned. As the demand for housing around Washington D.C. expanded, all the Reston property quickly became quite expensive, the values of even the smallest townhouses skyrocketed, and soon the housing could be occupied only by the (at least, relatively) well-to do. Reston is still regarded as a very nice place to live, with large public parks and open greenspace and housing concentrated in comparatively tight clusters, but the social-engineering experiment in income, ethnic and cultural diversity failed in part because property quickly got so expensive. Still, the residences are very different from the rambling homes located on expansive lawns found in most well-to-do suburban areas.

Experiments in local developments in Lexington have been on a more limited scale, and have not been particularly successful, either. For example, those townhouses located on Turkey Foot Road area south of Alumni Drive were a weak attempt to force developers to devote a portion of the Turkey Foot Road area to more affordable housing in the mix, close to an area that even when originally built, was expensive. Residents in the townhomes share only common street address with the residents of the expensive single-family homes nearby. Otherwise Alumni Drive, a busy artery which divides the two sections of Turkey Foot Road, could be a 50-foot high fence. Those people have their own community--not a bad community, but not shared with the community of those who live in the neighboring single-family dwellings.

Builders, the public, and the property tax assessors know that property values are strongly influenced by the value and type of surrounding property, and that places limits on what can be done in terms of introducing housing appropriate to different income levels within a small area. So Lexington and most other urban communities have virtually all neighborhoods heavily segregated by income.

Some "Researchable" Questions

This paper concludes with a list of research issues and a series of "testable hypotheses", some of which could be examined with empirical analyses.

1. What measures (indicators) could be used to measure the "quantity" (quality, perhaps) of social capital in a rural community?

2. Specifically how do these vary across communities large and small?

3. Are measures of social capital also measures of the sustainability of rural communities?

4. Are social capital indicators essentially the same as quality-of-life indicators, or are there are there important differences? If so, what are they?

5. Does economic growth (as measured by increases in average per capita personal incomes) imply increasing social capital? Do high-income people tend to interact as social capital to a greater degree than low-income people, or is there no persistent pattern that is income-related?

6. How and to what extent does the distribution of incomes within a community (or income inequality) influence social capital formation?

7. What basic forces cause social capital to form, and how might it be destroyed?

8. How would one go about measuring the degree to which residents see their communities or subdivisions as being "permanent"? Americans, particularly those living in urban areas, have traditionally moved to higher income neighborhoods as they attained additional income. Is this detrimental to social capital formation? (In rural areas, this upward mobility migration is less obvious, where upward mobility is often tied to outmigration.)

9. Is an evolving sense of "permanence" to the community necessary for social capital accumulation? How does this sense of permanence manifest itself? Are there quantifiable indicators?

10. When pressed, do most people really prefer to live in neighborhoods that are diverse, not only income-wise, culturally, racial and ethnically, and does such diversity foster or hinder social capital formation?

11. Should every effort be devoted toward the use of tax dollars to fund city parks, recreational facilities such as tennis courts or public pools, or is the quasi-private recreational facility and clubhouse only for residents who pay a fee part of an evolving trend? If so, what are the consequences of this for social capital formation?

12. What about social capital formation and cultural diversity within the local school system? Should public schools properly reflect the needs and values of the student body from homes surrounding the school? Or are students and the public better served by schools with more diverse student bodies?

13. What role does religion play in social capital formation? in particular, does social capital formation proceed at a faster pace in areas in which one particular religious branch dominates?

14. How would one go about developing state or county level social capital indicators?

15. Does a high property turnover rate in an area suggest low social capital? What about areas of stable versus declining employment in terms of social capital formation?

16. Can evidence of actions by community residents which suggest permanence--that is, tree planting, the use of brick or stone in home construction, be indicative of the presence of social capital?

Each of these issues could become a testable hypothesis upon which empirical research could be based. The remaining question are what, if any, are the quantifiable variables which would potentially address each question or issue, and are data readily available either from secondary sources or from a primary survey? For example, the Census of Housing asks the question "how long have you lived in your present home? There may even be information on construction materials used and certainly information on the number of rooms.

Some of these questions and issues may, at first, appear to be a bit silly, but these are the essence of the kinds of activities that make a place a community in terms of neighbors not only knowing each other, but developing a sense of trust and good will as well, which, in turn, builds social capital. Often more frequently absent in urban than in rural settings, they are part of the appeal of the rural lifestyle. Clearly, there is far more to community and social capital than is defined by money or wealth. Like a lot of things in life, social capital is generally not purchased with money. That's part of what makes it an interesting topic of study.


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