The aim of this paper is to find out if those countries, 15 years after transition, still differ with this respect from the other European countries. The research is based on the 2006 round of the European Social Survey and takes into account declared personal altruistic and pro-cooperative attitudes, participation in associations, propensity to “strong” and “weak” social ties and finally level of trust in society. The method was that of grouping countries according to similarity of those features.

The research confirmed particularity of post-transition countries as to lower propensity to “weak” ties and higher to “strong” ones and, in particular, very low level of social trust. However, post-transition economies are similar to Southern European countries (Spain, Portugal and Cyprus) as to social capital profile. It was found also that the level of trustfulness does not explain by itself low level of social trust and that it is low trust in legal system and social importance attached to be rich that explain it better.

Deficiency of social capital in post-transition countries is thus explained by cultural and historical factors, but also by the manner transition was introduced (implying deficiency of legal system and promotion of individual success over cooperation). The revealed characteristics of social capital may lead to “bonding” rather than “bridging” forms of cooperation.

The literature suggests that social capital in poor households is partly explained by the need of seeking institutional solutions in a context of absent or imperfect markets (Morduch, 1995 and 1995, Townsend, 1995; Besley, 1995). One of the characteristics of being poor is the lack of connections with the formal economy. The share capital of the poor is derived primarily from family, friends and neighbors, and can serve as a safety net daily for the resources provided do not obtained through formal markets to cushion the shock to income from crisis (Viteri 2006).

Social capital is defined as “the sympathy that a person has towards another that causes that one offers social capital. People who offer social capital generate benefits, advantages and preferential treatment to others” (Robinson y Siles, 1997). The relationships that take place through social capital allow that information circulates, facilitate collective action based on trust and use informal mechanisms to protect themselves against contingent events, to cover themselves against risk or to take advantage of opportunities (Woolcock, 1999; Narayan y Pritchett, 1999).

In developing countries as Mexico social capital is used mainly like a protection system. People who do not have access to formal markets use their networks to acquire public and financing services, social insurance and subsidies, among others, reason why social capital supply is affected by variables that reflect alternatives to market failures.

Social capital is used in imperfect markets because of incomplete information problems, contract breach and high transport and transaction costs; social capital allows to interchange information and to work in a collective way, negotiations based on trust reduce monitoring costs and risks of breach and collective action generate scale economies in the productive inputs.

Indicators used as market failures are: Microfinances, it reflects asymmetric information problems. Social capital is explained through support links like loans from relatives and friends or savings in ROSCAs, people who participate in these schemes grant resources to people with those who maintain a link or affinity. Health services reflect problems of asymmetric information and monopolies in their distribution and supplies. When people do not have access to clinics or hospitals use alternative medicine like homemade medicine, tonic remedies, healer or midwife; the provision of them settles down links with the suppliers that generally are relatives or known people.

Social security is generated because employment is a binary phenomenon and retirement is a discreet event in underdevelopment countries. When people do not have social benefits at work like medical services, nursery school, mortgage and loans, among others, they ask relatives and friends for their supplying, people who use these kind of services they grant resources to others like reciprocal consequence of others aid. Markets provide goods and services to a price that covers costs but markets could not offer certain goods and services. Subsidies represent a market failure indicator because when markets are looking for efficiency they sacrifice fairness. People who receive subsidies perceive the benefits of having the aid of public institutions and extend the trust levels granting transferences towards others.

Indicators that represent market failures were built with information from the Income and Expenditure Household Mexican Surveys. They were built four indicators of bonding and bridging social capital to observe the exogenous variables effects (market failures) on the four dependent variables; variables control related to demographic and socioeconomic aspects were used. Synthetic panels for seven years with population cohorts were elaborated to follow population throughout the time. Estimations with Tobit models were made and to correct the problem of spurious regression was used the cointegration method from where finally the robust coefficients were obtained.

The obtained results were: if people use alternative services of health and participate in informal schemes of microfinances they help more to relatives and friends. If people receive subsidies, they grant more contributions to beneficial institutions like churches, Red Cross and ecclesiastical services. If people use alternative services of health, receive subsidies and do not count on social benefits, they grant more communal contributions for local celebrations (like religion celebration). If people receive subsidies and do not count on social benefits they grant more contributions for local public service works.

If informal mechanisms to get credits and savings, health, job and social benefits additionally to subsidies explain in some sense social capital indicators when credit, health and social security markets fail, it could be considered that an important part of these markets is also being explained by social phenomena linked to traditional mechanisms of adjustments in quantities and prices.

The aim of the present paper is to re-instate the ‘social’ in social capital by exploring alternative principles of rational behaviour based on the concept of social embeddedness. Socially-embedded individuals both shape and are shaped by society, which requires that they identify with multiple collective agencies characterised by different norms and networks, and that they freely engage in a reflexive process to assess different values and objectives through mechanisms of social mobilisation and political debate. In this way, the individual creates norms and participates in networks not for the sake of her personal interests, but for the sake of her personal identity, which allows her to make choices that not solely depend on exogenously-given individual preferences and social rules, but also on what kind of person she wants to be and what kind of society she wants.