In States and Citizens Saskia Sassen has emphasized that notions of citizenship are historically and locally embedded. While governance, and many aspects of cit- izen loyalty, remain largely national in scope, globalization has been occurring chiefly through the alignment of national policies to suit the needs of international and glob- al enterprises. She sees similar potential for more citizen- based actions at a global level, although for a number of reasons this potential is still relatively undeveloped. In her analysis, she emphasizes the importance of focusing more on behaviour than on the structure of constitutions and laws. In many respects her methods, conclusions and advice are even more applicable to the case of social capital, where the relevant norms and networks are defined by history, custom and behaviour rather than by laws and formal institutions.

I shared the surprise of most social scientists at John McCallum’s discovery, while he was chief economist of Royal Bank of Canada in 1995, that merchan- dise trading relations among Canadian provinces in 1988, the last year before implementation of free trade, were more than twenty times as intense as those between Canadian provinces and US states, after making due allowance for the effects of size and distance. The results were calculated in the first instance using a bilateral version of the gravity equation, wherein trade relations depend positively on the size of the two trading partners and negatively on the distance separating the two partners. In Isaac Newton’s version, the force of gravity is proportional to the product of the masses divided by the distance between them. For most eco- nomic models of trade, the size of the flows does tend in both theory and empirical results to rise more or less proportionately with the product of the size of the two trading partners, but there is no theoretical reason for the intensity of trade to fall proportionate- ly with distance. Indeed, in most trade models the intensity should fall only at the rate dictated by transport costs. But the actual decline in trade intensities is often estimated to be larger than the proportionate increase in distance, far more than can be accounted for by transport costs. If the decline in trade intensities with distance were entirely attributed to transport costs, the costs of transporting goods would have to consume a large fraction of a country’s GDP, greater by an order of magnitude than actual transport costs.

Measured in terms of distance equivalents, border effects of the size estimated by McCallum are equal to 15,000 kilometres, even though, as already noted, the distance effects themselves are very large. Subsequent estimates of the border effects for Canada and other countries have pro- duced lower but still large estimates.

Evidence for other countries is harder to come by than for Canada and the United States, as only for Canada have comparable data been developed for interprovincial and for province-state trade. To get estimates for other countries, it is necessary to develop approximate measures for internal trade distances and volumes. Subject to these constraints, the evi- dence suggests that for all the industri- al countries these border effects for the United States are consistent with those of James Anderson and Eric van Wincoop in their 2001 study Gravity with Gravitas; i.e., larger than their esti- mate for the United States, the largest economy, and often larger than for their estimate for Canada. Studies of border effects by industry show them to be large for almost all industries, and not adequately explained by tar- iffs or nontariff trade barriers.

The strong separation of national and local markets is not limited to merchandise trade. Border effects are even larger for services. Engel and Rogers (1996) find price changes for both goods and services are less corre- lated for cities that are farther apart, and hardly correlated at all for city-pairs on opposite sides of the Canada-US bor- der. International capital movements have also been found to be much less fluid across national borders.

The transfer of knowledge based on research and development and patent- ing activity has been shown to decline significantly with distance and with the crossing of international borders. Census records for the United States and Canada show that Canadian resi- dents not born in their current province of residence are 100 times more likely to have been born in anoth- er province than in a US state of similar size and distance. Even though south- bound migration of the Canadian-born has for more than a century been three times more likely than north-bound migration of those born in the United States, studies of the current locations of more than 50,000 graduates of the University of British Columbia show them to be far more likely to live in British Columbia than elsewhere, and far more likely to be living elsewhere in Canada than in a US state of similar size and distance. The migration patterns of UBC degree holders also mimic the aggregate census data in showing a downward trend over more than a half century in the likelihood of degree holders to have moved from Canada to the United States. This remains true for all degrees, although geographic and international mobility grows systemati- cally with advanced degrees, reflecting the increasingly international scope of study and employment as specializa- tion increases, especially at the Ph.D. level. At the Ph.D. level the student intake is also much more international, for the same reasons.

In general, greater tightness of local and national networks is likely to depend on a whole range of norms and institutions being more similar and more trusted than those extending further afield and into other nations. If this is the case, and if this enables local producers to better understand and meet the prefer- ences of local consumers ”” whether of baked goods, beer, stories or music ”” the separation of space in this way may well represent an effective way for individuals, firms and societies to get on with their lives. Alternatively, there are theoretical models of international trade, such as Anderson and van Wincoop’s, that assume border effects to be caused by policy barriers that stop consumers from getting adequate access to global products. In this setup, if consumers are assumed to value variety and to take it to be proportion- al to GDP, as suggested by some ver- sions of the gravity model, then border effects are bad for economic welfare. In this setup, anything that served to further globalize international trade would raise welfare. However, the available evidence does not seem to support this interpretation of either the causes or the consequences of bor- der effects. If border effects are damag- ing to either economic efficiency or some broader measure of welfare, then those living in larger nations should be systematically more productive or more happy with their lot, for any given level of income. However, there is no systematic tendency for per capi- ta incomes to be higher in larger industrial countries. More important- ly, in the light of the hypothesis that those living in smaller countries are constrained in their choices, levels of subjective well-being are highest in the smaller countries of northern Europe, and not in the larger nations.

This would imply, as suggested by psychological studies, that once product variety passes some fairly modest level it starts to hinder rather than increase consumer welfare. If local producers also have an edge in seeing and responding to local tastes, then there would be no puzzle in finding that those living in small countries are as well off in narrow economic terms and in general better off in subjective well-being, than those living in larger nations.

Local and national social capital is therefore likely to support the localiza- tion of production and distribution in ways that may well be best for all con- cerned. It is certainly a hypothesis with equal or greater appeal than the frequently assumed economic model wherein information is free, networks are assumed to be costless and far- flung, and consumers are happiest if they are consuming the greatest possi- ble variety of goods and services.

If local and national norms and net- works ”” social capital ”” underlie the diversity of local and national mar- kets and societies, are there likely to be implications also for questions of gov- ernance? Two strands of recent research on subjective well-being sug- gest that this is so. Recent analysis of differences in subjective well-being among Swiss cantons suggests that those living in cantons with more fre- quent and direct direction from their voters have higher levels of subjective well-being. More generally, analysis of subjective well- being data from several waves of the European and World Values Survey shows that the quality of government, as measured by an average of many measures assembled by World Bank researchers, reveals the strongest effects of any of the national-level variables used to explain differences in subjective well-being among more than 100,000 respon- dents in over 50 countries and over 20 years. These effects of the qual- ity of government on well-being are above and beyond the effects flowing through better education, higher incomes and better health, all of which are themselves dependent on the quality of government.

The data on the quality of govern- ment embody a number of compo- nents that flow quite directly from high levels of social capital, e.g., trust in government and absence of corrup- tion and other evidence of exploitive behaviour. Robert Putnam’s path- breaking research on democracy in modern Italy showed quite clearly that there were large differences in the effectiveness of government among the regions of Italy, and that these were correlated closely with differ- ences in several measures of social cap- ital. His results, which documented closely the more effective way in which devolved powers were employed in regions with high social capital, have found echoes in subse- quent research in many countries. Even in Italy, subsequent earthquakes, which have been distributed widely across Italian regions with very differ- ent levels of social capital, have shown that self-organizing relief and recovery efforts have been far faster and more effective in those regions with higher social capital, and centrally provided relief funds have more quickly and equitably been used to support the repair efforts.

These strands of research suggest that local and national separation applies as much to social capital and quality of governance as to the other aspects of life surveyed previously. There are large and sustained interregional and international differences in the nature and quality of gover- nance, and in some sense each region or nation gets the quality of gover- nance that its social capital supports. When Andre Grjebine complained in Le Monde about holiday road carnage being so much higher in France than in Norway, he attributed the difference to a higher sense of mutual respect among drivers in Norway, what he called a greater a level of acceptance of the social contract. I subsequently found that one can explain more than one-third of the variance in traffic fatalities among OECD countries by differences among national average levels of interpersonal trust, a reason- able measure of the extent to which people might feel that traffic and other norms are reliably accepted by other drivers. In some sense, international differences in traffic fatalities, which in all industrial countries share a strong downward trend related to some combination of better equip- ment, better roads and higher safety standards for motor vehicle construc- tion and use, provide another measure of the quality of governance that citi- zens provide for each other, in this case, their design and acceptance of agreed rules of the road.

There is a whole range of evidence that norms and networks and the pat- terns of social, political and economic activity that they support are surpris- ingly local. But do the networks inhere in the geography, the local institutions or the individuals living there? This might be an impossible puzzle to unravel if migration were not so varied and so well documented. In part because migration is a relatively rare event, and because the nation state is above all a geographic entity, most countries keep fairly good census and other data on at least the birthplaces and nationalities of their residents. Likewise, many of the surveys that measure social capital also obtain a sufficient range of demographic infor- mation to separate those with different migration histories. Even if the survey only collects the individual’s place of residence, then census data can be used to construct demographically rich descriptions of the communities in which they live. Thus it is now fea- sible to learn much more about how social capital is affected by migration and by the changes in community structures that are thereby created. The relevant data and research are in their early days, but it is perhaps worth not- ing some of the preliminary strands of evidence to help direct future data col- lection and research.

Even before approaching the evi- dence, one can be sure that the rela- tions between social capital and migration are bound to be complex and uncertain. There is enough history of forced migrations, racial and ethnic persecutions, and turmoil among and within immigrant groups, especially in troubled inner cities, to ensure that migrations take all forms and are likely to have a wide variety of consequences for the social capital of the sending and receiving communities and nations. To over-simplify enormously, migration creates both challenges and opportuni- ties for the development and mainte- nance of social capital, while the quality and nature of a community’s social capital will largely determine the success of migration seen from the points of view of both existing and new members of the community.

Empirical results show that coun- tries becoming larger sources of migra- tion to Canada thereafter have tighter trading links with Canada than existed before the migration, as documented by Keith Head and John Ries in The Canadian Journal of Economics in 1998. This suggests that some migrants use their market knowledge and networks in the source country to develop trade and investment opportunities in Canada. The results show trade increases that are larger and more sig- nificant for Canadian imports than exports, suggesting that some or all of the effect may be due to continued tastes for source-country goods and services not previously available in Canada. More closely linked to the global information society theme is the finding of Devesh Kapur in 2001 that development of extensive trade in computer services between Silicon Valley and India depended heavily on ”œreputational intermediation” provid- ed by recent migrants from India to Silicon Valley. These migrants, with established trust and networks in both communities, were able to provide a vital missing link to establish new globe-spanning networks that permit Bangalore to solve problems while Silicon Valley sleeps. Although global shift work may be a useful time saver, cost differences provide the basic rationale for this new trade in services, and trust-providing migrant networks make them credible.

How do these examples of migrant-driven trade creation alter the general conclusions made previously about the preponderantly local and national nature of economic and social ties? Thus far, the vol- umes of such trade are very small; large enough to be statistically significant and to show causal links, but not large enough to materi- ally affect the overall vol- umes flowing in national and international channels. One additional feature of migrant-driven trade networks is worth noting: they open up interna- tional trade possibilities for small firms as much as or even more than for large firms, permitting an international ver- sion of the small-scale trust-based net- works of family enterprises that were the core of the successful textile and clothing districts of northern Italy.

When considering the effects of migration on social capital and vice-versa, reference is often made to the distinction between bonding and bridging types, with the former tend- ing ”œto reinforce exclusive identities and homogeneous groups,” as Robert Putnam observes, and the latter tend- ing to generate ”œbroader identities and reciprocity.” Bonding social capital is taken to underlie the fact that immi- grant pathways are often very specific, to such an extent that small neigh- bourhoods in Toronto can contain as many migrants from an Italian village as are left in the original village. The noteworthy point here is not the scale of the migration but the fact that later migrants tend to follow the pathways established by their neighbours and kin, right down to the travel agents who book their flights, the streets on which they live, and the jobs where they work.

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Does the fact that migrants carry and make use of bonding social capital make it less easy for them to accept and be accepted by their new communi- ties? There has long been a supposition that the us-them distinctions that in part define bonding social capital might make it more difficult to create bridging social capital of the types most likely to facilitate mutual accept- ance of and by migrants as they settle in their new communities and nations.

If bonding associations are com- plementary to rather than competing with bridging ties, it raises big ques- tions about the nature of citizenship and nationality in the 21st century. Should immigrants be encouraged to assimilate, or instead merely to inte- grate? Is there a contrast between a melting pot and a multicultural society; if so, which is to be preferred, and why? I first became engaged in this sort of question when I began comparing data on several measures of social capital in US states and Canadian provinces. I first found that whose ethnic self-descriptions includ- ed a hyphen (as distinct from a description that said, ”œCanadian only” or ”œCanadian first and foremost”) are systematically less trusting. This was unsurprising to me, and it seemed rea- sonable that those who describe them- selves with a hyphen might therefore be more inclined to think of the world as ”œus vs them” and to be less trusting of people generally, especially those outside the bond.

What I was more surprised to find was that those who described them- selves without a hyphen were twice as numerous in officially multicultural Canada as in the US melting pot. When I asked other social scientists if this posed a puzzle needing explana- tion, they replied that if it was a puzzle it had already been recognized and explained. Joseph Heath makes a dis- tinction between integrative and assimilationist notions of citizenship, arguing that the former provides a more effective means of welcoming immigrants into the national society and is more attractive to immigrants in not requiring them to choose between their ethnic bonds and their broader bridges to their new compatriots. By providing a more attractive set of images and a more welcoming envi- ronment, the argument runs, this more inclusive but less homogenizing vision of citizenship is more attractive to immigrants. They are therefore more likely to define themselves as unhy- phenated citizens. Hence Heath was unsurprised to hear that twice as many Canadian as US respondents did not use a hyphen, since it was consistent with the evidence reported by William Brubaker in his 1989 book, Immigration and the Politics of Citizenship in Europe and North America, that Canada has had a rate of voluntary naturalization more than twice as high as any other immigrant nation, including the United States. This does not refer to the rate of immigration, which is twice as high in Canada as in the United States, but to the proportion of legal immi- grants who take up citizenship when they become entitled to do so. Since this typically involves no additional rights beyond the right to vote, this decision is regarded as an indicator of social capital at the national level, especially as voting is regarded as a bell-weather marker for civic engage- ment. In his 1998 study, Finding Our Way, Will Kymlicka argues that this integrative notion of citizenship, by accepting ethnic identities in the con- text of a broader web of social inclu- sion, is not only popular with migrants but is productive of better relations among all ethnic groups. For example, he cites 1997 survey evidence that the proportion of respondents who agree that ”œdifferent ethnic groups get along well here” is much higher in Canada (75 percent) than in countries with more emphasis on cultural assimila- tion, such as the United States (58 per- cent) and France (51 percent).

Even though the Canadian model of citizenship appears to be more accepting of immigrants, recent survey evidence nonetheless shows that immi- grants appear to be less trusting than other Canadians, after accounting for differences in income, marital status and other variables used to explain dif- ferences in beliefs about the extent to which other people can be trusted. One hypothesis for this difference was test- ed by Tom Rice and Jan Feldman, who showed in 1997 that differences among US states in average survey measures of trust were signifi- cantly explained by the corre- spondingly measured average levels of trust in the European countries in which their parents had been born. If it is true that recent Canadian immigrants had come from countries with significantly lower levels of trust than are found among the Canadian-born, then that might help to explain the lower average trust found among immigrants. So a variable was con- structed containing the average trust level in each respondent’s country of birth. The variable obtained a signifi- cant positive coefficient, and the negative immigrant effect vanished.

Does this sound too good to be true? Could it really be possible, by treating tolerance rather than con- formity as the objective, that immi- gration could be turned that much more easily to the greater benefit of immigrants and their new countries? That is at least a plausible conclusion from these Canadian results. However, given the number of occa- sions and places where immigration has been a painful experience, and the likelihood of increased interna- tional migration to and among the major cities of the world, the possibil- ity that alternative models of citizen- ship might help maintain and gener- ate social capital seems to demand further investigation.

There are many other types of international and global social capital. These include personal networks that cross borders, whether based on friendship, family, employment or involvement in other organizations with international or global interests. There are also business networks, including the operations of multina- tional enterprises, contractual or other commercial networks, and the opera- tions of international business organi- zations. International criminal networks are usually considered sepa- rately, even though their main purpos- es may be related to business activities. These include inherently international activities such as smuggling of drugs, prostitutes and would-be migrants; international money laundering and tax evasion; as well as multinational organizations controlling what are essentially domestic criminal activities in many countries.

Rounding out the list is a range of nonprofit organizations, ranging across wide spectrum of governance, financing and purposes. Inter- governmental organizations, starting with those of global reach, include the United Nations, the Bretton Woods triplets (the World Bank, the International Monetary Fund and the GATT, finally becoming, as originally envisaged, the World Trade Organization). There are also many intergovernmental agencies of more specialized or regional form, such as the International Air Transport Authority (IATA) and the Organization for Economic Cooperation and Development (OECD). Then there are the thousands of nongovernmental organizations (NGOs) or quasi-non- governmental organizations (”œquan- gos” was the UK term for these) with varying degrees of financial, voluntary and organizational support from gov- ernments, international agencies, national governments, foundations, corporations and individuals.

It would be easy to construct a longer and even more boring catalogue of types of international activity and organization. These activities and organ- izations do not themselves represent social capital, but they do provide a good part of the institutional structure within which international and global social capital networks are formed.

It is worth mentioning especially the work of Margaret Keck and Kathryn Sikkink on transnational advocacy net- works. Since these networks typically involve nonstate actors ”œbound togeth- er by shared values, common discourse, and dense exchanges of information and services,” they provide a good example of transnational or global social capital. It has been argued by many that the global information soci- ety, as characterized by the Internet especially, has been the cause of these types of global advocacy. Sikkink argues instead that while ”œinformation tech- nology is a key sustaining and acceler- ating factor for networks… it is not an engine; it does not drive.” She bases her conclusion on three pieces of evidence. First, transnational advocacy net- works are not new. The global move- ments working for women’s suffrage and the abolition of slavery relied on similar networks. Their members also thought that their own contemporary technological innovations were crucial to their success. As one British anti- slavery activist put it, ”œwe can no longer ignore what is going on in America, it is only two weeks away.”

Second, the current wave of transnational activism emerged in the early 1970s, well before access to computers or other advanced information technologies, but admittedly after the widespread availability of internation- al air travel.

Third, and most closely tied to the emphasis I have placed on the impor- tance of geographic closeness and per- sonal networks, Sikkink finds that successful global advocacy networks have all been based on trust usually established through face-to-face meet- ings. She says: ”œOnce they have estab- lished trust, often through face-to-face meetings, then the networks can go on to sustain themselves through e-mail or modern communications technology, but no networks that I have studied have been initiated solely via the Internet.”

Transnational and global social cap- ital, like that of more local and national forms can take bonding and bridging forms, and more likely mixed forms, and have objectives ranging from the most unselfish to the most destructive. Although al-Qa’ida is for good reason the most prominent example of a trust- based transnational network put to a malign purpose, given the size and dra- matic nature of their terrorist acts, there are many previous examples, including both the Lockerbie and Air India aircraft explosions. The latter, for example, was organized in Vancouver by Sikh extrem- ists looking for a means of reprisal for the destruction of a Sikh temple in India, and involved placing bombs in June 1985 in two Air India aircraft intended to explode at approximately the same time. One bomb exploded prematurely in Narita airport, killing a baggage handler, as it was being transferred from the Vancouver plane to the target aircraft, while the other exploded on an Air India flight over the Atlantic, killing all 329 aboard. Most of these passengers were Canadians, comprising about as large a share of the Canadian population as there were Americans killed by the hijacked aircraft crashed into the twin towers of the World Trade Centre. All of these assaults provided examples of social, human and physical capital put to evil use, in these cases via transna- tional networks. But there are many sim- ilar examples within each country, and hence nothing special about the transna- tional features, except that the resulting investigations and prosecutions become much more complicated. As many of these events have shown, the lack of a fully functioning international criminal court and the overtly political nature of many terrorists acts make it hard to implement effective remedies.

Most global networks are benign rather than malign in their intent, and the very activities involved in working together in a common cause are likely to broaden horizons, open eyes and enlarge the basis for building under- standing and eventually trust. I have at several points presented evidence that participation in many groups of a bonding sort is positively related to participation in bridging activities. If those with narrow interests are also broadening their contacts and trust networks in other directions, then the seeds are planted for trust networks to be overlapping rather than sectarian and to foster further co-operation.

There is ample evidence that social capital of many forms creates bonds that improve the chances of finding co- operative solutions to common prob- lems. What is now being found is that, as a bonus, the overlapping communi- ties formed by these networks improve the health and well-being of the direct participants, their neighbours and fel- low-citizens, their nations, and the world as a whole. I suspect that the fact that bridging and bonding ties tend to be mutually supportive rather than sim- ply competing for the same scarce hours, a result I emphasized in the section on migration, will have parallels for interna- tional and global social capital. Thus I will not be surprised to find, when more systematic data are collected, that inter- national and domestic networks are also likely to be complementary, so that the strikingly local nature of social and eco- nomic life can persist in harmony with many international networks.

This article is adapted from a keynote address the author delivered at the 75th Anniversary Conference at the University of Tilberg.