The Contribution of ‘Social Capital’ to Economic Growth: Lessons from Island Jurisdictions

Abstract

This paper is concerned with the relationship of ‘social capital’ to economic development, with a deliberate focus on island territories. It argues that an appreciation of ‘social capital’ theory makes for a more informed understanding of how many (though not all) small, peripheral and network-driven island societies develop ‘good governance’ practices and manage a commendable standard of living. ‘Island neo-corporatism’ merits recognition on its own terms as the deep structure to ‘good governance’; and, in combination with jurisdictional powers, it is a key primer of economic development.

Keywords:

• small islands
• social capital
• jurisdiction
• neo-corporatism
• good governance
• economic development

Acknowledgements

The germ of this paper was the keynote address delivered at the North Atlantic Forum 2002, held in Sydney, Cape Breton, Canada in October 2002 and organized by the Community Economic Development Institute at the University College of Cape Breton (UCCB). A subsequent draft was presented to the Canadian Industrial Relations Association in June 2003. I am grateful to Barry Bartmann, Jane Ledwell, Ariana Salvo, Henry F. Srebrnik and anonymous peer reviewers for critical remarks. The usual disclaimers apply.

Notes

Fiji, Marshall Islands, Kiribati, Micronesia, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu (all in the Pacific); Antigua & Barbuda, Bahamas, Barbados, Dominica, Grenada, St Kitts & Nevis, St Lucia, St Vincent & the Grenadines, Trinidad & Tobago (Caribbean); Malta, Cyprus (Mediterranean); Comoros, Maldives, Mauritius, Seychelles (Indian Ocean); Iceland (North Atlantic); Cape Verde; São Tomé & Principe (off West Africa) and Bahrain (Arabian Gulf).

These would include the dependent territories of the former colonial powers: Great Britain (such as Bermuda), France (New Caledonia), the Netherlands (Aruba) and the USA (Guam), as well as Pacific territories of which Australia or New Zealand are trustees (Norfolk; Niue). India, Norway and Denmark are also the controlling authorities of other island territories, including Greenland, the world's largest island (see Royle, 1989, Table 1).

These include: Hawai'i in relation to the USA; the Ålands in relation to Finland; Corsica in relation to France; the Isle of Man in relation to the UK; Madeira in relation to Portugal; and Tasmania in relation to Australia. ‘Unequal dyads’, where one of the islands is the seat of government, include Antigua and Barbuda; St Kitts and Nevis; Trinidad and Tobago; Mauritius and Rodrigues; Sao Tomé and Principe, Malta and Gozo. The Australian government dispatched 2000 troops to quash civil strife and restore order in the Solomon Islands in 2003.