Economics Analysis

This part of the assignment will cover the economic standpoint of social cohesion, and how it impacts safety and security in a specific neighborhood. Economic growth clearly brings forth monetary prosperity to various landowners and rent-seekers, thus it must be explored whether this can provide a positive impact on societal cohesion also. First, the factors determining social cohesion will be effectively analyzed. The economic point of view of these factors will follow suite; on how a prosperous or withering economy can bring forth security and trust, or create a medium for crime and precariousness. Evidence from various economists, such as Frederick Hayek, will provide the necessary backing to understand the role of an economy on external stakeholders such as the security of the inhabitance in a neighborhood.

Social Cohesion

Considered to be vague in nature, social cohesion is understood in various different contexts and even countries due to various national cultural beliefs. An accepted, rational definition is the equal opportunity to feel a sense of belonging to achieve through own effort; or up to ones capability if unable to, in a society. Hence, three underlying goals are described to help shed light on what defines social cohesion.


The 3 underlying goals of social cohesion:

  1. Widespread opportunity for a population to share the benefits of economic activity.

       Example: Being able to obtain an income and acquire certain skills

2. Strong sense of personal security; having a low incidence of crime and other social issues (such as failure of parents to care adequately for their children) and citizen protection

3. Commitment to constitutions and institutions; a sufficiently strong sense of shared goals and commitments to induce positive attitudes towards a common goal and trust in judicial systems. Also, to prevent violence and other conflicts from arising.

Through these following goals, it is necessary to investigate how and to what extent an economic state can effect opportunities, security, and societal commitment towards reaching a socially cohesive echelon.

Economic Growth on availability of widespread opportunities

Countries with the highest economic growth in the past three decades, the East-Asian countries, have all shared one common aspect of significance: low and steadily declining income inequality amongst the population. This seems in tune with the availability of opportunities to reach a socially cohesive state. However, they are only deemed unique in the ability to combine economic growth with equality of income, as income inequality is in fact a poor indicator of the widespread of opportunities. Having these widespread of opportunities available will allow individuals to improve their incomes through their own efforts without the grievances of taking from rich and giving to the poor.

It is thus imperative to consider that economic growth generally results in higher incomes for both the rich and the poor. As per Figure I, the rates of GDP (economic) growth are measured against the rate of incomes of the bottom 60 percentile. (Hollis Chenery, 1984).



Economic growth is thus beneficial to workers, reducing poverty through increased employment, productivity, and wages. Thus, it is safe to conclude the positive benefits of economic growth on the availability of widespread opportunities.


Economic growth on sense of personal security

There is sufficient evidence to accept the case that individuals in a society move in and outside societal norms and values; to commit crimes like theft and tax evasion; depending on factors including the available opportunities to earn income from alternative uses of time and effort, and the probability of receiving penalty fines or being caught. However, it is still not fully accepted to deem that unemployment and poor incomes are directly causally related to crimes, theft, and poor educational records. It could be that in a poor economic state, individuals with criminal records find it far more difficult to find jobs rather than law-abiding citizens acting out of societal interest. It is thus important to recognize a more important factor in terms of personal security; the upbringing of a children and overall “strength” of family as per (Buchanan and Hartley, 1996). The reasons stating:

  1. Parents more likely to encourage children to attend schools and receive education to strengthen future employment opportunities
  2. Parent are more likely to provide repercussions and exact punishment on ill behavior
  3. Stronger sense of belonging in a family results in pride-seeking nature, avoiding ill will to safeguard piousness and reputation


It is therefore important to understand the role of families in a society to understand the extent of personal security, and not only taking into account unemployment and low incomes as this is still not a direct causal link. It is still useful to support evidence in case of analyzing particular data on social cohesion within a society.


Economic growth on the strength of support on constitutions

An effective commitment to constitutional arrangements is a national acceptance of laws, rules, and support of activity implementation. This commitment is regarded when there is restraint on government intervention and a focus on collective decision making. High income countries with high growth rates experience little political uprisings or violence, and freedom of political choice. When an economy is on the up rise, widespread opportunities increase and there is a far greater incentive for commitment to constitutional arrangements. Individuals will thus have a stake in ensuring political involvement in allowing peace and prosperity, effectively leading to decreased violence, conflicts, and civil unrest.


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The evidence provided in the previous sections can support that economic growth is generally associated with higher incomes for the rich and the poor, lower unemployment rates, increased life expectancy, political stability, and overall social cohesion. To understand the social cohesion in Bouwlust, the factors concerning it should be considered and data should be collected accordingly to match requirements of goals with realization.

It is thus important to realize the effect the economy could have on Bouwlust, and whether specific economic states led to a loss of security, opportunities, and trust of institutions and society as a whole. Income equality and the income of the “poorest of the poor” should be analyzed to effectively measure up to the notion of increased growth leading to more opportunities. This can help to understand whether there are actual advantageous scenarios to take advantage of, or the lack of it could be the reason for poor social cohesion in Bouwlust.

It is also necessary to understand the role of families and family beliefs of the inhabitants of Bouwlust; either through cultural, ethnic, or overall beliefs; to understand the full extent of feeling of personal security. Unemployment and income figures wills serve to deepen any information received from Bouwlust.

Finally, where there are equal widespread opportunities and sense of personal security, a greater inclination to support constitutions and institutions will arise. It is only rational and acceptable as human nature in society, and possibly the role of government and the satisfaction shown towards it could shed light on potential commitment issues in Bouwlust.


Hayek, F (1984a), 'The Pretence of Knowledge', in C Nishiyama and K Leube, The Essence of Hayek, Hoover Institution Press.


Chenery, H (1984), 'Growth Distribution Tradeoffs', in Meier, G, Leading Issues in Economic Development, Fourth Edition, Oxford University Press.


Buchanan, C and Hartley, P (1996), Controlling Crime in New Zealand, New Zealand Business Roundtable.