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competent through a higher status and education, and jobs have been created. In this process,
relatedness among community members saw an increase, boosting social capital that
eventually helps achieve social and economic development.
The economic role of relatedness among members of a common culture has been discussed
in several studies. Karlan and Appel (2011) studied the relationship between loan repayment
and social solidarity using the “microcredit group loan” system run by a Peruvian branch of
FINCA, a credit bank. Whereas most microcredit financial institutions granted loans to
customers who came in groups, FINCA made a list of customers in order of their visit and
formed groups at random. Social solidarity was then studied in two ways. One was using a
cultural index. Solidarity was defined using languages or clothing of individuals as
continuous variables. The other concerned geographical solidarity measured by the ratio of
people living in towns that were a 10 minute walk apart. This research studied 600 borrowers
for two years and found that groups with high cultural and geographical solidarity tended to
repay loans in time and showed a low probability of deviating from the group, whereas
groups with strong internal solidarity tended to better forgive people who could not repay
loans (Karlan et al., 2012: 190-191). This means that groups with strong relatedness among
members - i.e., groups with high social capital - can manage each other more effectively.
Another case often cited as a prime example of social capital enhancement through culture
and arts is El Sistema of Venezuela. El Sistema, a youth music education program, is one of
the most widely known cultural welfare programs today. Created by economist, social activist,
and amateur musician Dr. Abreu in 1975, the program has grown into an organization with
190 centers with 260,000 members in total. El Sistema was created by Dr. Antonio who
wanted to get children from poor families to hold musical instruments instead of guns in a
country where crimes are rampant. The program started with 11 members at a garage in a
slum, but with growing sponsorship from other governments and private companies, it has
grown to the extent that it influences countries all around the world.
What differentiates El Sistema from existing music education programs is that it pursues
social change. The program not only contributes to crime prevention by teaching music to
children in slums who are exposed to a variety of dangers such as drugs, violence,
pornography, and gun accidents, but it also helps give children hope, a sense of belonging,
and a goal, all the while teaching them the values of dreams, cooperation, empathy, order,
and responsibility. Social capital played a key role in the success of El Sistema by integrating