Social Capital and SME Development

Economic development has always been discussed in the context of culture. A classic masterpiece by Max Weber speaks of the protestant ethic that propelled the northern parts of Western Europe toward rapid economic growth. Today, failures rather than successes of development policies in developing and transition countries are often explained away with reference to culture. While modernization theorists tried to get away from cultural explanations, by stressing strong correlation between culture and economic development, their demise in late 1960’s brought culture back into the discussion of economic development. Postmodernist theories of the 1990’s have developed and radicalised the cultural perspective.