There are two reasons for Eastern Europe’s challenge with Social Capital. First, the legacy of the Soviet Union appears to be the major reason that its former states see lower levels of trust in societal and state institutions: this can be seen in the case of Latvia and Lithuania, who, despite good performances elsewhere, still have low Social Capital scores, holding back their overall level of prosperity. Second, the existence of corruption and crony capitalism from partial reforms serves to reduce trust within society and therefore further erode Social Capital.
These challenges increase a risk facing Central and Eastern Europe: that of its young people leaving. Although there are some benefits to leaving, through the knowledge they acquire and benefits through remittances, the young are best able to contribute to their countries’ prosperity if they stay. But for them to stay, they need to feel that hard work pays off, that they can make a difference, that they belong, and that they have a political voice.
Overall, the picture of the region is one of strong potential, although there are still serious sub-regional challenges, including the low prosperity of post-Soviet states and differences between regions within countries. If prosperity is to improve across the region then these countries should learn from their neighbours: their path to prosperity is through full and wide-ranging structural reforms, a commitment to reducing corruption and driving out cronyism, and fostering a society where Social Capital is nurtured.