Social Capital in Australia

Social capital is the political, economic and social benefits derived from relationships, norms and co-operation between individuals and groups. This shapes the quality of social cohesion that is crucial for economic and social development (Woodhouse, 2006). The interaction between people of different social network increases community productivity by reducing the cost of carrying out business through co-operation between different groups. Australia rural and urban societies have experienced different impacts from social capital (Woodhouse, 2006).
In Australia, social capital is key factor for rural development. For example social interaction between the government, communities and businesses contribute to social cohesion and trust between members of a community. But for many years, Australia government has devolved responsibilities of social welfare to local governments and non-governmental organization through the process of privatization and devolution (Baum, et al 2000). This position has led to the growth of civil society which fosters competition that breaks down social capital and trust in rural areas. This favours Australia urban areas where individuals have reasonability for their own welfare; there is also reduced government responsibility for welfare and devolved welfare provision for non-governmental sector (Hogg & Carrington, 2006).
Globalization trends have greatly influenced Australia rural population resulting in higher rates of aging and ill people who are unproductive (Australian Bureau of statistics, 2013). These factors have led to high levels of poverty and unemployment in rural areas thus the need to increase social capital. For example in a study on the distribution of social disadvantage in NSW, Onyx and Bullen, (2000) found out that only two Sydney (capital city) locations in the disadvantaged areas. This is unlike in urban areas where globalization as led to high rates of young population in cities due numerous employment opportunities...