Institutional Performance and Social Capital: An Application to the Local Government Level

:A large and growing body of research is devoted to the effects of social capital on institutional performance. This literature reveals that societies characterized by higher levels of social capital tend to achieve superior performance. Still, enquiries to date predominantly concentrate on country-level data or large sub-national units. The primary purpose of this article is to extend the empirical work to the local government level, while retaining the use of objective data to gauge institutional performance. This use of local data has the advantage of increasing the data set available and provides a more stringent test of the effect of social capital because social capital is likely to vary less at lower levels of government. The results—based on an empirical analysis of 305 Flemish municipalities in 2000—support the view that social capital leads to government (out)performance also at the local level of government.