Ideology and Social Capability: an enquiry on Public Virtues generating mechanisms

Why are some governments successful in implementing their policies while some others systematically fail? What determines the relationship between citizens and the State? Are citizens more willing to cooperate in an efficient institutional system?

The social capability defined as ''the ability to pursue efficiently the collective action'', is a key-concept to investigate the mechanisms that generate a successful institutional context. The related concept of social capital comes from the idea of measuring the individual propensity to cooperate. Citizens' cooperation avoid the sub-optimal effects of non-cooperative behaviors, as the ones classically illustrated in the Prisoner's Dilemma class of games. The literature has hypothesized that a direct relationship exists between the social capital present in a society and the capability of its institutional system.

The literature on Political Business Cycle has analyzed until now, empirically and theoretically, aspects of economic policy such as public expenditure, monetary policy, taxation and public debt. Here we present a version of partisan theory based on social capability.

If during the '70s the ideological trade-off between the Left and the Right, in accordance with the inflation-unemployment theories was acceptable, cum gran salis, the evolution of the political debate in the last twenty years has made this hypothesis progressively less satisfactory. The ''liberalization'' and ''deregulation'' wave of the beginning of the eighties, and the decline of planned economies, have moved the political focus to totally different issues and styles. The goals, the programs and the strategies of the main political parties in the western countries have been significantly modified[1]. During the most recent electoral campaign in the U.K. it has been noted that Labour's electoral manifesto presented many points which had originally been proposed by Mrs Thatcher Tory cabinet in 1978. The associations made with blue collars-''Left'', ''Right''-white collars, is not so straightforward. It is difficult to justify why ''Left'' parties should support inflationary policies which affect the middle classes that are becoming progressively a relevant part of their electoral power.
If we analyze the ''Left''-''Right'' dimension by relying on the relationship between the level of social capability and the role of the State, we are able to overcome this impasse generated by the historical change process. We will probably obtain a much more general analysis tool which will improve our comprehension of the phenomena studied.
We will adopt a conceptual scheme, while the ''Left'' parties on the other hand tend to overestimate the level of social capital. As a consequence, in countries where ''Right'' parties are incumbents the role of the State is under-efficient while the opposite happens when ''Left'' parties are governing. based on the ideas illustrated when speaking of the relationship between performance, structure and governance.We propose a classification of political actors based on the matching rule proposed by the World Bank in its 1997 annual report. We will differentiate ideology on the basis of the rejection or the acceptance of this principle. For those politicians who adopt a political philosophy in the idealistic tradition, is totally erroneous to select the goals of collective actions on the basis of the status quo of the environment.

According to a growing literature, to solve collective actions dilemmas, the State, as Hobbes's Leviathan, has to explicitly take into account social capability constraints when forming economic policy decisions. By adopting such a perspective, the empirical observation that governments had sometimes provided welfare enhancing institutions, but had also provided institutions that led to economic decline, can be analyzed by relying on the matching capability-role of the State framework. If we introduce the presence of a democratic system in the analysis, the existence of an ideological cycle in the level of social capital formation emerges. To create a successful institutional system it is therefore necessary to consider the unbiased management of the State and civic cooperation's common nature of public goods.
We showed that political preferences concerning the role of the State and the level of social capital may bias the composition of public expenditure, thus leading to different capability settings. A quick empirical testing on 12 western countries seems to provide evidence confirming these theoretical predictions.
In this paper we have deliberately not investigated the informal mechanisms that can generate social capital. We focused our analysis only on the active role of the State to empower the capability creation process. We don't believe that such informal channels are not important. On the contrary, we attribute great importance to self-generated public virtues enhancing mechanisms. We simply tried to study the role of the State as a constraint and a source of social capital. It is therefore important to add a caveat to the previous conclusions: obviously our work should be evaluated bearing in mind that the level of social capital is not only function of the policy makers' choices, but depends also on a wider set of elements (social networks, ''informal norms'', etc.).