Capital Gains

Photograph by Shane Lynn

Jonathan Isham's job is all about connections, but he's less interested in making them than in measuring them. How many social organizations, formal or informal, does a community have, and how many people belong to them? How often do neighbors interact socially? Indeed, how many neighbors can one neighbor name?

Isham, an economist, studies "social capital," a discipline so new that researchers are still figuring out how to formulate the questions, never mind how to find the answers. As a broad concept, social capital encompasses the networks and behavioral norms of a community. The higher a community's social capital, the more likely it is to be successful when measured in other more easily quantifiable ways, such as economic data.

Isham, who once worked for the World Bank, uses a simple illustration to explain the concept: "Imagine yourself as a World Bank officer with $5,000 to spend on a development project in a single village in Indonesia. You're looking at two villages with the same demographics, except one has a high level of social capital and the other doesn't. Our research shows that the village with the higher level of connectedness among its members is going to be the better investment."

Middlebury College is Isham's first teaching job; in the fall of 1999, he joined Middlebury's Department of Economics with a newly minted doctorate in economics, from the University of Maryland. Before that, he received an undergraduate degree in social anthropology at Harvard, served in the Peace Corps in Benin, and earned a master's degree from Johns Hopkins in a field with a long-winded name: international economics and social change and development. It was the second part of that name—social change and development—that led him to the World Bank, where he consulted, full time for three years, on education and microcredit projects in Chad and Mali, microcredit being the sort of small business loans that can leverage enormous social and economic benefits in a developing country.

When he stumbled across the notion of social capital, it struck him like a bolt of lightning. "Social capital is old wine in a new bottle," he says, noting that he's not the author of that quote. "[Social capital] has been around for a long time. Rural anthropologists and sociologists have understood the concept for 50 or 60 years, but it didn't have a name.

"James Coleman at the University of Chicago coined the term in the late 1980s when he was writing about the connectedness of inner-city neighborhoods in Chicago . . . but Robert Putnam really put it on the map in 1993 when he published a book called Making Democracy Work. He compared the 20 regions of Italy that were created in the 1970s. What he found was that regions with high social capital—birding clubs, soccer clubs, choirs—functioned better than those with less. Government functioned more efficiently, the economies were more prosperous, things just worked better."

Putnam's book created a firestorm at the World Bank, where Isham was working on several development projects. Economists quickly noticed the word capital, he says, "because capital is something they understand. If Putnam had called it social networking, I don't think it would have had the same effect."

Capital, of course, is something that can be measured, while the term social capital suggests an elusive I-know-it-when-I-see-it quality, not unlike Justice Potter Stewart's immortal description of pornography. How, then, does one measure such an

intangible?

"The primary norm is to measure the number and size of groups in a community because those are countable items," explains Isham. "We tried using scales—on a scale of one to ten, how much do you trust your neighbors? How much do you trust the police?—but those scales were less than successful because they couldn't be replicated." So researchers began to ask people how many times they had invited their neighbors over in the past year. How many neighbors could they name? The questions, if not perfect, at least provided numbers that could be plugged into statistical formulas.

"Formulating the surveys is a developing area," acknowledges Isham. "We also have to be careful that we're clear about the meaning of the term and about its limitations. If it's defined too broadly, it won't mean anything."

After years of asking questions and counting organizations in remote parts of the world, Isham has chosen to take a look at Vermont. Recently, he's studied the effect of social capital on the probability of loan approval and loan repayment through the state's low-income car loan program (by examining the level of trust between a lender and high-risk borrower) and he's currently attempting to determine whether Vermont's land-use law is capable of protecting the ecosystem of the Killington Ski Resort. 

Isham has involved his students in these studies, making use of a new and increasingly popular educational model called service-learning, in which students do their research by working with local organizations to find solutions to a specific problem. Not only does it help alleviate traditional town-gown tensions, but he also notes "service-learning has been a perfect match for my teaching and research interests."

One such study, conducted by Isham in conjunction with Chris Klyza of the environmental studies program and Andrew Savage '04, involves counting the number of land-based groups—environmental, agricultural, and outdoor/ recreational—in two Vermont counties.

Although Robert Putnam suggests in another book, Bowling Alone, that social capital is on the decline in the United States, Isham's study shows that social capital may simply be taking new forms, at least in Vermont.

While Grange membership may have waned, the Middlebury researchers have uncovered "an explosion" of local environmental groups since 1985. Moreover, Isham's group proposes that, unlike the Grange (in which all members are farmers), environmental outfits tend to bridge demographic groups, attracting diverse people with a common interest.

For the future, Isham and his students are taking on the labor-intensive task of counting all groups—from historical societies to Little Leagues to quilting clubs—in Addison County, dating back to the 1800s. What he wants to know is "how the nature of groups has changed, and how that affects the outcomes." As far as he knows, it is the first data-collection project of its kind.

It's a huge undertaking, he acknowledges, but that's okay with him. "Vermont," he says, "offers me a wonderful, fascinating place to study in my own backyard."

Sally West Johnson '72 wrote "Reliable Source" in the winter 2004 issue of the Magazine