Local Development and Community-Based Co-operatives: A Social Capital Approach

The paper tries to analyze the following research question: “How does the formation of social capital among activists of community-based cooperatives effect local development?”

Given tight budget constraints and a backlog in infrastructure investments, small municipalities are seeking new forms of providing public services (e.g. eldercare) which build on civic participation. In contrast to outsourcing these services in the form of Public-Private-Partnerships, cooperative Public-Citizen-Partnerships support civic democracy on a local level. Critical for the sustainability of community engagement in issues of local development, however, is whether those individuals who initially become involved can access and mobilize valuable social capital.
In order to tap the full potential of the social capital approach, research has to be based on an understanding of social capital as rooted in social relations. The concept refers to both resources embedded in social networks and their mobilization which helps community activists, and is also expected to be beneficial to the local community.

As a first step, the paper presents a network model of social capital. Based on this model and the results of a context analysis of 3 focus groups with leaders of local development initiatives, we derive a set of hypotheses on the creation and returns of social capital among community activists. The hypotheses are subsequently tested in a large scale questionnaire survey among a random sample of 1932 households in 6 selected small municipalities in Austria. The results of our study support the findings of Granovetter and Burt on the importance of weak ties and structural holes in social networks. On the one hand, leaders of local development cooperatives need to mobilize fellow citizens with different backgrounds, rather than acquaintances. Thus, combining different capabilities facilitates the development of a sustainable community-based organization. On the other hand, the paper identifies cooperatives as a suitable form of organizing community-based initiatives. Its flexible and open network structure enhances the information and influence flows necessary for generating social capital. Furthermore, the existing structural holes within local development cooperatives, suggest that community activists are mobilizing social capital bridging social and political boundaries within a small municipality.

The paper contributes to the debate on social capital and its relation to civic participation. Furthermore, our analysis provides valuable insights for policy makers concerned with fostering community engagement.

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