User:Nick Gardner /Sandbox

When the members of a community are forced to attend to public affairs, they are necessarily drawn from the circle of their own interests and snatched at times from self-observation. As soon as a man begins to treat of public affairs in public, he begins to perceive that he is not so independent of his fellow men as he had at first imagined, and that in order to obtain their support he must often lend them his co-operation.

When the public govern, there is no man who does not feel the value of public goodwill or who does not endeavor to court it by drawing to himself the esteem and affection of those among whom he is to live. Many of the passions which congeal and keep asunder human hearts are then obliged to retire and hide below the surface. Pride must be dissembled; disdain dares not break out; selfishness fears its own self. Under a free government, as most public offices are elective, the men whose elevated minds or aspiring hopes are too closely circumscribed in private life constantly feel that they cannot do without the people who surround them. Men learn at such times to think of their fellow men from ambitious motives; and they frequently find it, in a manner, their interest to forget themselves

Alexis de Tocqueville in Democracy in America best elucidated the political function of social capital in a modern democracy. He used the phrase the "art of association" to describe Americans' propensity for civil association. According to Tocqueville, a modern democracy tends to wipe away most forms of social class or inherited status that bind people together in aristocratic societies. Men are left equally free, but weak in their equality since they are born with no conventional attachments. The vice of modern democracy is to promote excessive individualism—that is, a preoccupation with one's private life and family—and an unwillingness to engage in public affairs. Americans combated this tendency toward excessive individualism by their propensity for voluntary association, which led them to form groups, both trivial and important, for all aspects of their lives. One person's civic engagement is another's rent-seeking; much of what constitutes civil society can be described as interest groups trying to divert public resources to their favored causes, whether sugar-beet farming, women's health care, or the protection of biodiversity.

Putnam. 1993. Making Democracy Work. Princeton: Princeton Universitiy Press.

• The conclusion, and Putnam's argument that social capital is a necessary ingredient for government functioning. It's a bit unclear on causality here, which he acknowledges: although the differing patterns of social capital in the north and south are largely due to centuries of history (thus dooming the institutional reform, one might think), Putnam also says that the changed institutions will have a gradual (perhaps imperceptible in the short term) effect on improving social capital.
• At the same time, he views social capital as simply one of two equilibria: either societies choose "always defect" in their daily collective action problems, or they choose "always return favors," thus building social capital and general trust. Keep in mind: like all equilibria, these are self-reinforcing. That means that saying institutions cause social capital which reinforces institutions isn't necessarily circular; any equilibrium is circular in that sense, since being in the equilibrium increases the probability that you will stay there.

Ostrom, Elinor, 1990, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge, Massachusetts: Cambridge University Press).