The Effect of Government on Social Capital in Provinces of Iran

Document Type : Original Article


1 Ph.D. Candiddate in Economics, Faculty of Economics and Administrative Sciences, Lorestan University

2 Associate Professor of Economics, Faculty of Economics and Administrative Sciences, Lorestan University

3 Professor of Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University


This study examines the effect of government size (government consumption expenditures as a share of GDP and government investment expenditures as a share of GDP) on social capital by using the panel data of the provinces of Iran during 2006-2013. In this regard, based on the Pathname and Coleman approach to measuring the social capital in the provinces, three levels of participation, trust and cohesion are considered and to combine the indicators, the factor analysis method has been used. Also, estimation of models was performed using panel co-integration analysis and Generalized Method of Moments (GMM). The results show that the government consumption expenditures as a share of GDP and government investment expenditures as a share of GDP and total of these two shares have a negative and significant effect on social capital in provinces of Iran. Therefore, one of the ways to strengthen social capital in the provinces is to adjust government activities.


- Anderws, R. (2016). Organizational Size and Social Capital in the Public Sector: Does Decentralization Matter? Review of public personnel administration, 27, 1-19.
- Andrews, R. & Boyne, G. A. (2009). Size, Structure and Administrative Overheads: An Empirical Analysis of English Local Authorities. Urban Studies, 46, 739-759.
- Arellano, M. & Bond, S. (1991). Some Test of Specification for Panel Data: Monte Carlo Evidence and Application to Employment Equations. Review of Economic Studies, 58, 277-297.
- Arellano, M. & Bover, O. (1995). Another Look at the Instrumental Variable Estimation of Error Compo net Models. Journal of Econometrics, 68, 29-51.
- Baltagi, B. (2005). Econometric Analysis of Panel Data, 3rd Edition, McGraw-Hill.
- Behboodi, D., Asgharpoor, H., Bastan, F. & Seyf, Y. (2013). Impact of Oil Revenues on Social Capital in Iran. Quarterly Journal of Economic Research, 13(3), 109-124 (In Persian).
- Blundell, R. & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87, 115-143.
- Burke, M., Marlow, C. & Lento, T. (2010). Social network activity and social well-being. In Proceedings of the CHI 2010, Atlanta, GA, USA, 10-15.
- Cusackt, T. (1999). Social Capital, Institutional Structures, and Democratic Performance: A Comparative Study of German Local Governments. European Journal of Political Research, 35, 1–34.
- Fischer, J. & Torgler, B. (2006). The Effect of Relative Income Position on Social Capital. Economics Bulletin, 26(4), 1-20
- Fox, J. (1997). The World Bank and Social Capital: Contesting the Concept in Practice. Journal of International Development, 9(7), 963-971.
- Green, W.H. (2012). Econometric Analysis. New Jersey, Upper Saddle River: Pearson International.
- Hashemi, H. & Norouzi, M. R. (2009). The Concept of Social Capital and its Influence in the Government. National Conference articles of the Social Capital and Economic Development, Semnan, 419-434 (In Persian).
- Idenyi, S., Johnson, N. & Promise, A. (2016). Public Expenditure on Social Capital: Implications for Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 7(6), 72-79.  
- Inglehart, R. (1997). Modernization and Post modernization: Cultural, Economic, and Political Change in 43 Societies. Princeton: Princeton University Press.
- Jankauskas, V. & Seputiene, J. (2007). The Relation between Social Capital, Governance and Economic Performance in Europe. Business, Theory and Practice, 8(3), 131–138.
- Jung, C. S. (2013). Navigating a Rough Terrain of Public Management: Examining the Relationship between Organizational Size and Effectiveness. Journal of Public Administration Research and Theory, 23, 663-686.
- Karimi Rahjerdi, A., Ranani, M., Emadzadeh, M. & Tayebi, K. (2014). Investigating the Relation between Oil Revenues Fluctuations and Government Size on Social Capital in Iran. Journal of Economics and Modeling, 5(19-20), 79-109 (In Persian).
- Kavoosi, E. (2006). Design and Presentation of Social Capital Measurement Model, Ph.D Thesis in Cultural Management, Islamic Azad University (In Persian).
- Khezri, E. (2015). Institutional Analysis of Administrative Corruption. Strategic Studies Quarterly, 8(29), 513-530 (In Persian).
- Lopez, O. E. (2003). Social Capital and Government in the Production of Public Goods. UFAE and IAE Working Papers 580.03, Retrieved from
- Mahdavi, A. & Azizmohamadlu, H. (2018). Analysis of Macro Factors Affecting the Process of Social Capital Accumulation in Iran. Journal of Majlis & Rahbord, 25, 5-42 (In Persian).
- Mehregan, N, Daliri, H. & Shahanavaz, S. (2013). An Assessment of Social Capital Trend in Iran Provinces. Journal of Economic Research and Policies, 20(64), 5-24 (In Persian).
- Miruka C. O. & Omenya A. O. (2009). Social Capital, Public Provisioning and Democratic Governance. Journal of African Studies, 6(1). Retrieved from
- Mousavi, E. (2016). The Impact of Government Size and Instability of Macroeconomics on Social Capital, M.A Thesis in Economics, Tehran University (In Persian).
- Nademi, Y. & Zobeiri, H. (2017). Government Size and Social Capital in Developing Countries: New Empirical Evidence. Quarterly Journal of Quantitative Economics, 14(2), 193-213.
- Oliver, J. E. (2000). City Size and Civic Involvement in Metropolitan America. American Political Science Review, 94, 361-374.
-  Panahi, M. H. & Amini, A. (2011). Rentier Government, Governmental Economy, Political Culture and Social Capital in Iran (1989-2005). Quarterly journal of political and international research, 7, 59-94 (In Persian).
- Payne, G. T., Moore, C. B., Griffis, S. E. & Autry, C. W. (2011). Multilevel Challenges and Opportunities in Social Capital Research. Journal of Management, 37, 491-520.
- Pil, F. K. & Leana, C. (2009). Applying Organizational Research to Public School Reform: The Effects of Teacher Human and Social Capital on Student Performance. Academy of Management Journal, 52(6), 1101-1124.
- Ponzetto, G.A. (2014). Social Capital, Government Expenditures, and Growth. University Pompeu Fabra, CEPR Discussion Paper, DP9891, Retrieved from
- Putnam, R .D. (1993). Making Democracy Work. Princeton: Princeton University Press.
- Svendsen, L. H. & Svendsen, T. (2000). Measuring Social Capital: The Danish Co-Operative Dairy Movement. Sociology Ruralis, 40(1), 72-86.
- Tantardini, M. & Kroll, C. (2015). The Role of Organizational Social Capital in Performance Management. Journal Public Performance & Management Review, 39, 83-99.
- Vilhelmsdóttir, S., Ritstjóri, S. & Silja, B. (2012). Three Dimensions of Social Capital and Government Performance, Rannsóknir í félagsvísindum XIII: Stjórnmálafræðideild, retrieved from.
- Younsi, M. & Chakroun, M. (2017). Does Social Capital Determine Health? Empirical Evidence from MENA Countries. the Social Science Journal, 54(1), 238-247.