Social capital was the Achilles" heel of the economic competitiveness of Armenia. In the meantime, the country made significant progress in solidifying it since the Velvet Revolution. In this article, we tried to present and analyze those elements of social capital which demonstrated significant progress in post-revolutionary Armenia, as well as the changes thereof. For that purpose, we have formulated the following research questions: What factors led to this growth, and what factors still lag? What hidden challenges can be observed through factual indicators which probably resulted from the slight decrease in the updated scores? What changes can be expected from the turbulent world and in the post-war society? The applied methodology is quantitative. In particular, to answer the research questions we used index analysis, graphic analysis, and comparison, correlation analysis techniques, pared t-test of the mathematical-statistical significance of changes, and Principal Component Analysis. The results of the analysis showed that a significant increase in the level of social capital was recorded in post-revolutionary Armenia, which was mainly due to the progress in institutional trust. Nevertheless, some revealed anomalies and encountered challenges undermined the archived progress in the growth of trust. Therefore, we put forward several recommendations.
Given the nature of social capital, the foundations of its formation, and the
important role it plays in economic development, a hypothesis of a possible correlation
between social capital and income distribution can be put forward. This research is an
attempt to enrich the small number of analyzes related to the testing of this hypothesis by
discussing the issue in the context of the interaction between social capital and income
distribution in Armenia and in general. To address the research problem, the tools of
correlation and panel regression analysis are used and compared with the results of the
expert survey dedicated to the assessment of public social capital in the Republic of
Armenia. As a result of the analysis of both the Republic of Armenia and the panel data of
different countries, a statistically significant relationship is reported between the social
capital, its elements, and income distribution, which is also in line with the opinions of
participant experts on the same issue. Obtained results are summarized by causal
inference terminology and a causal graph of relationships is proposed.
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