Social Capital, Social Liabilities, and Political Capital: Social Networks and Informal Manufacturing in NigeriaAfrican Affairs

Abstract: This article addresses the question of why social networks have failed to promote economic development in Africa when they have been associated with economic growth in other parts of the world. Detailed field research traces the role of social networks in the economic organization of two dynamic informal enterprise clusters in the town of Aba in south-eastern Nigeria, an area renowned for the density of its popular economic networks and for the rapid development of small-scale manufacturing under Nigeria’s structural adjustment programme. Focusing on the role of embedded social institutions and their restructuring amid the competitive pressures of rapid liberalization, I consider the extent to which social networks in Aba constitute ‘social capital’ capable of promoting economic development in the context of ongoing liberalization, ‘social liabilities’ that undermine accumulation through a social logic of redistribution and parochialism, or ‘political capital’ through which popular forces are incorporated into the ‘shadow structures’ of predatory states. This article challenges the essentialism of much of the contemporary literature on African social networks, arguing for a sharper focus on the specific institutional capacities of indigenous economic institutions. It calls for greater attention to the role of rapid liberalization and state neglect in explaining the developmental failures of African informal enterprise networks.