Social Cohesion for Economic Growth Evaluation Note / Yasemin Satır Çilingir

The extensive literature on the impact of social cohesion on growth notes that social cohesion implies the intensification of the cooperation between ethnic, religious and other groups of identity. Its presence necessitates the prevalence of norms in labor and capital markets as well as in the education system preventing discrimination based on class differences. This article will outline how and why growth will be higher in societies where people work and produce together and enjoy equal rights despite their different social identities.

Social growth, to begin with, reduces transaction costs in economic exchange, such as information accumulation, communication and contractual practices. Economic activities remain limited in societies where trust and cooperation among different groups of identity proves to be low, due to higher costs of economic cooperation.

Secondly, as social cohesion boosts reciprocal ties between individuals, individual demand for public goods is consonant with the supply of those goods. The resulting availability of public services will have a positive contribution to the national income. Empirical studies demonstrate that the provision of public goods and services, such as education, healthcare, roads, and waste disposal, tend to be less in heterogeneous societies consisting of individuals with different social identities. Societies with a high-level of social consciousness and cohesion offer a more cooperative and reciprocal environment in order to use public resources towards the end of fostering public interest without an explicit need for a homogenous society.

The lack of social cohesion also makes a society more vulnerable to social conflicts, violence and separatist movements. For instance, Foa (2011) compares the social cohesion index calculated for 1990 with the duration of and the number of casualties in civil conflicts between 1991 and 2008. Accordingly, a 1 unit decrease in social cohesion corresponds to a rise of 4.5 years in the average duration of conflicts and a respective increase in the number of casualties. In sum, when civil conflict starts, its duration and ferocity are determined by the social cohesion and resistance at the time of the conflict. Academic research has proven the negative impact of social conflicts, terrorism and class struggles on capital formation and economic growth. Violence among groups tends to destroy a country’s physical and human capital, leads to brain drain and alienates foreign investment. Collier (1999) estimates the economic cost of one year of civil war as an average loss of 2.2 % in growth. Therefore social cohesion, which shortens the resilience process during civil conflicts, is important to prevent the destruction of social capital.

Finally, the impact of social cohesion on allocation, productivity and efficiency is also linked with economic growth. For an effective allocation in a society, resources must be distributed so as to maximize total economic welfare. However, discrimination and social polarization resulting from the absence of social cohesion may lead to a suboptimal distribution of resources. For instance, the refusal of any social group to work with another religious or ethnic group or the rejection of employers to hire qualified workers from minority groups can accrue unfavorable outcomes, such as having to rely on production by unqualified staff. Furthermore, if the minorities are denied access to social services such as education, transportation and healthcare, a respective loss in human capital and productivity is inevitable.

To sum up, social cohesion does improve economic growth through preventing physical and human capital destruction, and building social capital, cooperation and trust between individuals of a society.

The economic cost to be accrued by an absence of social cohesion is high. What, then, does social cohesion mean for Turkey? Is Turkey a society of persons that trust each other? How can Turkey improve social cohesion? How will 2.5 million Syrian refugees find their place in an already delicate equation of Turks, Kurds and Alevis?