Social capital, since Putnam’s 1993 work, has captured the imagination of policy-makers the world over, and Australia is no exception. In 2005 the Department of Victorian Communities launched its Actions for Community Strengthening policy statement, which draws heavily on social capital theory. This article explores the theoretical underpinnings of the government’s policy and critiques its failure to deal adequately with the causal relationship between social capital and its supposed community benefits. The article then seeks to isolate the missing factors through a look at recent research on volunteerism and argues that the institution of collaborative/interactive governance needs to be underpinned by sound socio-economic reform.
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