Social Capital and Economic Inequality in Russian Towns: Social Network Analysis

Economic inequality in Russia is extensively researched and well-documented. However, most studies have focused on regional disparities, while inequality within individual towns in Russia remains understudied. This study examines the relationship between bonding social capital—measured through social network analysis—and inequality at the town level. Using data from the online social network “VK,” we constructed fragmentation indexes for various towns. The fragmentation index indicates the tendency of social nodes to cluster together and maintain links within these groups. We found that the fragmentation index, which reflects bonding social capital, correlates with inequality across a sample of 120 Russian towns. This relationship may not be strictly one-way. High bonding social capital, which signifies strong social ties within a group and trust among familiar individuals, contributes to increased inequality because it limits access to connections that could enhance economic well-being. Conversely, higher inequality tends to boost bonding social capital, as individuals may come to believe that success is determined more by luck than by merit. This perception can lead to anti-social behavior that undermines trust within society, further increasing bonding social capital and the fragmentation of networks. Additionally, our analysis of the factors underlying differences in inequality and social capital revealed a non-linear relationship with distance from Moscow. Areas closer to Moscow and those in the Far East exhibit higher levels of inequality and bonding social capital, while regions further away, particularly in Central Russia, show lower levels.