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What is a social dilemma? How is it related to social capital?

June 14, 2015

A social dilemma occurs when an individual faces the choice of incurring a personal cost for a greater benefit for others. When social capital( trust, cooperation, understanding and sharing among members of society) is high, individuals are more prepared to incur such individual costs for the greater good; and when most people in society behave in that manner, society as a whole benefits in higher economic productivity, stronger social insurance, greater social resilience to natural hazards, and greater mutual care (such as Good Samaritans coming to the
emergency aid of others).

Many social dilemmas occur in countless faceto-face encounters in daily life and business dealings. When two individuals engage in abusiness encounter, there are the possibilities that they may engage in deceitful behavior such as theft, fraud, or even violence. Some of these threats can be controlled by legal contracts, butwriting and enforcing contracts can be costly or even impossible in some circumstances. Thus, trust is critical: the confidence that the counterparty will behave honestly or morally and transparently.
Without social trust, a wide range of mutually beneficial economic and social arrangements may be impossible to negotiate, much less to sustain.Other social dilemmas occur at the societalscale. When social capital is high, individual citizens are more prepared to pay their taxes honestly, more prepared to support investment in public goods, and more likely to support social insurance policies. The Scandinavian countries, with perhaps the highest social capital in the world, also have the most extensive social welfare systems (broadly classified as social democracy). High social capital is conducive to electoral support for a strong social safety net and extensive social services.

Social capital is best built by exemplary laws, ececution,systems and behaviour of leaders in all walks of life.

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Filed Under: GS Paper 1 Tagged With: Society, Sriram's IAS

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