91 Copyright © 2014, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 6 DOI: 10.4018/978-1-4666-4745-9.ch006 Social Capital, the Culture of Trust, and Economic Development ABSTRACT The benefits accruing from social networks and structures have been shown to correlate with economic performance at both the macro- and micro-levels. Indeed, social capital can be seen as a catalyst through which human and physical capital are utilized and political and economic freedom realized. In this chapter, the authors briefly review the broad extant literature on social capital before embarking in more detail on how game theory can be used to analyze and model social capital. Particular attention is given to the population game approach. This approach is well suited to model social capital as it allows us to capture individual behaviour, societal influence, and network structure. The growth of social capital is seen to depend on the incentives for cooperation, the way in which people learn from past experience, and the inter-connectedness of the social network. A particularly important question for many emerging economies is how social capital can be encouraged to grow from a low base. In a concluding section, which includes a discussion of the complementarities between strong institutions and social capital, the authors use the population game approach to study this issue. 1. INTRODUCTION During the past 20 years a burgeoning interest has developed in social capital and an increased recognition that it has a fundamental role to play in economic development. In this chapter we shall introduce the literature on social capital, and discuss the importance of social capital in emerging markets. In broad terms, social capital measures the benefits which accrue from social networks and social structures. A widely cited definition is available from Pierre Bourdieu (Sobel 2002: p. 139): “Social capital is an attribute of an individual in a social context. One can acquire social capital through purposeful actions and can transform social capital into conventional economic gains. The ability to do so, however, Edward Cartwright University of Kent, UK Thomas Singh University of Guyana, Guyana