Linking Social Capital and Indirect Policy Tools

Abstract

Governance perspectives suggest the boundaries between public and private sectors are blurred, and recognize the involvement of third party actors in carrying out public objectives. Traditional policy models neglect to consider the involvement of third part actors and limit our understanding of the effectiveness of these approaches. By adopting a policy tools perspective, the potential and limitations of governance approaches can be better understood. Indirect policy tools can foster collective action around public problems by incorporating third party actors; however, it is necessary to understand the interaction between indirect tools and structural social capital. The actors involved in carrying out public objectives may depend upon the linkages between top-down and bottom-up social capital. A qualitative analysis of the Community Reinvestment Act of 1977 suggests indirect policy tools can foster collective reinvestment responses, but the effectiveness of indirect policy tools is contingent upon the existence of linking social capital.