Quality of governance, social capital and corruption: local governance and the Pakistan marketplace

Theoretical debate on the relationship between the quality of government, social capital and corruption remains underspecified in relation to the analysis of local governance. This paper asks how quality of government (QoG) impacts on the role of social capital (SC), and how SC connects with corruption in the local governance context. The paper develops a local governance approach in order to better understand this relationship through an in-depth qualitative case-study of the governance of Batkhela Bazaar in Malakand District of Pakistan. Three findings emerge: Firstly, the results demonstrate how QoG and socioeconomic inequalities shape the context for SC development and its role in corruption, which feeds into the poor QoG. Secondly, unlike the existing mainstream literature, the results show the fundamental importance of petty corruption to levels of trust within a society. Thirdly, reciprocity plays a crucial role in maintaining trusting ties in the context of ineffective formal institutions.