Soft capital such as culture- Trust, honesty(non-corruption) and transparency are critical for economic development.
In his seminal book “TRUST”, which I read some 15 years ago, Fukuyama a great scholar, argued that it is very imperative to build, along with physical capital social capital such as - trust, honesty, transparency and trade ethics. Over long run he argued if, this is not taken care it would be difficult to achieve economic prosperity by any country . He has researched lot of cultures and economic across the world for this book. A very interesting perspective especially if you read it with book by Michael E porter called “Competitive Advantage of Nations” which is largely about physical capital.
Economics influences cultures and vice versa. Corrupt economy corrupts culture. Honesty and trust are very important part of social capital. I think it is now our highest priority.The soft-capital is becoming increasingly important in every form of organization be it government, private or public
http://www.amazon.in/Trust-Social-Virtues-Creation-Prosperity/dp/0684825252
