Economic elites and social capital
This study aims at understanding the behavior of economic elites in the Third World. Because economic elites concentrate the property of physical capital in society, their actions influence the living conditions of the masses. The literature on the elite’s behavior is, however, very limited. This study is an attempt to take some steps to fill this gap. The behavior that is emphasized is the investment in social capital. A theory of social networks is thus proposed. A prediction of the theory is that the accumulation of social capital depends on the same set of factors that explain the accumulation of physical capital. Therefore, the economic elites do not circulate endogenously. The case of Peru is examined in the light of this theory. The results show consistency with the predictions of the theory. The conclusion of this study is not in accord with the usual optimism laid down on social capital as the instrument for economic development of the masses.
Social capital, Social networks