The Role of Community in Economic Development

Yujiro Hayami

in Development Economics

Second edition

Published in print February 2001 | ISBN: 9780199243976
Published online November 2003 | e-ISBN: 9780191596377 | DOI:
 The Role of Community in Economic Development

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The community is considered the third pillar of the economic system in addition to the market and the state. The market is an organization coordinating competition among people seeking profits by impersonal means of prices, and the state intervenes in matters of resource allocations through the use of coercive power. In contrast, the community organizes collective actions based on mutual trust within a small group characterized by intensive interactions. The community's role in conserving and improving common‐property resources is well known. In addition, its role in supporting market development by its power to enforce trade contracts among transacting parties belonging to the community network is emphasized. This role is especially important in the early development stage.

Keywords: community; community failure; community norm; social capital

Chapter.  14928 words.  Illustrated.

Subjects: Economic Development and Growth

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