Disadvantages, Downsides of Social Capital

The same characteristics of social capital that enable beneficial, productive benefits have the potential to cause negative externalities. Potential downsides of social capital include: fostering behavior that worsens rather than improves economic performance; acting as a barrier to social inclusion and social mobility; dividing rather than uniting communities or societies; facilitating rather than reducing crime, education underachievement and health-damaging behavior. (Aldridge et al. 2002). The same orchestrating mechanisms that reduce transaction costs in market exchange can have negative consequences (Carroll and Stanfield 2003; Fine 1999; Torpe 2003).; Erickson (2002, p. 547) supports this identifying the following paradox: 'every feature of social structure can be social capital in the sense that it produces desired outcomes, but also can be a liability in the sense that it produces unwanted results'. The kinds of groupings and associations which can generate social capital always also carry the potential to exclude others (Hunter 2000; Morrow 1999; Szreter 2000). Social capital can become a constraint to individuals' actions and choices (Wall et al. 1998). For example, there is a particularly high risk of negative social capital in urban poverty situations (Small 2002). The importance of the negatives of social capital was first documented by Portes (1996) but now is synonymous with our understanding of social capital theory. A stock of social capital is simultaneously productive and perverse. Simplistically speaking, the make up of these types determines the structure of the overall social capital present. As this is highly context specific further research is required to understand the causal relationships that determine the realization of productive, or perverse, social capital.