Mind the gap! Social capital, East and West!

Social capital in Central and Eastern Europe lags behind that in Western European countries. We analyze the determinants of individual stock of social capital - measured by civic participation and access to social networks - and find that this gap persists when we account for individual characteristics and endowments of respondents. However, the gap disappears completely after we include aggregate measures of economic development and quality of institutions. Informal institutions such as the prevalence of corruption in post-communist countries appear particularly important. With the enlargement of the European Union, the gap in social capital should gradually disappear as the new member states catch up (economically and institutionally) with the old ones.