Social Capital and Experiential Education

October 10, 2013 at 9:47 AM

Social Capital and Experiential Education

Carolina Morgan NU ’10 and Jim Stellar

I met Carolina in her freshman year at Northeastern University over her application to a scholarship that my office ran when I was Dean of the College of Arts and Sciences. She was an economics major with an interest in social justice and later in her career won a number of top scholarships. She is now in graduate school at MIT for a Master’s degree in City Planning after a few years working at a NGO in Cambridge called The Institute for International Urban Development. Throughout that time, we have been discussing on and off the role of social capital, a term taken from economics, to promote tolerance between people hoping that would lead to more broad-based social justice. Last year as Carolina passed through NYC on her way to Albania to do work with her NGO and the World Bank, we met and discussed tying this idea back to experiential education in college. Here is the result of that conversation.

Carolina, let’s begin with having you define social capital

Social Capital is a broad concept with multiple definitions that has been applied to many fields and adapted to fit different theories. Through my undergraduate research, I came to conceptualize it to fill some gaps I was seeing in the economic theories about which I was learning. The basic premise of Social Capital is that social ties and social networks have an intrinsic value that can be tapped into for tangible results. That value is Social Capital.

I was first introduced to the concept of social capital in a class about Microfinance. In Bangladesh, the pioneering Grameen Bank was giving out small loans for micro businesses to very poor women and getting extremely high repayment rates. This success was attributed to “social collateral”: the bank gave loans only to women who were organized into a group. When one member was unable to pay, the other women had to cover her monthly fee. The social pressure to not let down fellow lenders turned out to be a very good incentive for repayment, reducing the Bank’s risk and greatly reducing loan defaults.  This peer pressure is an example of social capital – a fuzzy phenomenon that turned out to have economic value (i.e. reduced lending risk).

How did this discovery shape your research and understanding of economics?

This story of Grameen bank inspired me seek out the role of social capital within economics’ classical theories. Here is basic economics in a nutshell: it is the study of productivity limited by scarce resources, and resources come in three types: land, labor and machines. Given limits on these three, it is up to technology and innovation to increase productivity. I began to pay more attention to the role of social capital as a fourth resource in this model. In developing countries, when all else is missing, people still find ways to survive and be productive. Social ties are very often the answer. Understanding social capital as an economic asset also helped me come to terms with the assumption that people always act rationally when making (economic) decisions. By making socially-driven motivations part of the “rationalization”, and gaining social “points” within the community a valuable incentive, the theory got closer to the reality I live in. I went on to explore how social capital can reduce moral hazard (a form of risk) in more common finance situations, and I wrote my senior thesis on the importance of social ties and networks versus educational attainment in immigrants’ ability to get a job.

How does this apply to what you did at the Institute and your work I mentioned with the World Bank?

At the Institute, we looked at social capital mostly in terms of strengthening city governance. When faced with daunting problems such as climate change in cities where the local government has very little control over where and how people live (such as slums or other informal settlements), how can you help the city implement adaptation measures? We often looked at examples of community-based initiatives or social network-driven programs as potential ways to overcome the lack of funds, lack of trust in the government, etc. Cases in which people helped each other and helped themselves were sometimes more effective than government-led initiatives.

The Work Bank project in the Balkans was interesting because it looked at the strength of the relationship between marginalized communities and Municipal authorities. In a way, we were measuring the level of social capital between these vulnerable groups such as the Roma community and their local governments. The World Bank calls this “social accountability” because it has to do with how responsive governments are to their people, and vice versa. It turns out, there was not much mutual trust or communication at all. One aspect of the project was to look for way in which technology can improve communication between these actors. Just as social media has enabled crowdsourcing and collective action, so can information and communication technologies facilitate dialogue between people and the government, building social capital and tolerance in the process.

How does this apply to learning from experience, particularly as a student who experienced this form of education through co-op?

One key lesson was the importance of relationships. I saw this on two levels: intellectual/academic and personal. At the intellectual level, it was very important for me to see these abstract concepts such as social capital play out in a real context, with real people. Despite all the efforts by economists and the World Bank to quantify social capital, it remains too broad to capture. I can’t say that I fully understood the power that lies in a strong community until I saw it by travelling and studying different places facing real challenges.

But that is merely as a “scholar” of social capital. At the personal level – and I think this is what your question really asks – co-op allowed me to start building my own social capital in a new community. This community involves peers, colleagues, mentors, mentees, clients, donors and more. There are subtleties to any profession: its intellectual exchanges, hierarchies, values, networks. Developing relationships with these people turned out to be life-changing for me. To explain why I would use a particular definition of social capital as “social relations that facilitate individual action”. There are a number of ways in which interacting with different groups enables you to better understand and serve them. For me, having a relationship of trust and respect with my bosses led to them supporting me in pursuing new paths. Here I would highlight that co-op is a good way to get started, but not the only way. Prioritizing getting to know professors or other people in school can also help – this is what happened when I met you. But I think for most of us, having the co-op experience opens our eyes to the value of social networks. And it is not only a matter of how others can help you. Eventually, what becomes important is how you can help them.

I think this quote “social relations that facilitate individual action” from the paragraph above makes a very good point. Experiential education takes the knowledge gained in the classic college classroom and applies it to an internship or a social service project or undergraduate research or any of the other ways in which students learn directly from experience. Typically this work is done in a group situation (e.g. an office) where the student builds that social capital we discussed. Back in the classroom, we teachers see a clear maturity and new energy for their studies which I now see as a facilitation of individual action. Aside from everything else, that is a very good outcome for higher education.


Gomez, R. and Santor, E.. 2001. “Membership Has Its Privileges: The Effect of Social Capital and Neighbourhood Characteristics on the Earnings of Microfinance Borrowers.” The Canadian Journal of Economics. 34(4): 943-966

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