The term "Social Capital" was recognized and coined by political scientist Robert Putnam after a 20-year observation of communities throughout Italy. Putnam and his colleagues discovered that communities identical in form could result in dismal, inefficient failures, as well as bright, successful, innovative successes. The difference between the successes and failures was not explained by affluence, politics, or population movements, but rather by the existence social capital.

Social capital, according to Putnam, refers to the features of social organization including networks, norms, and trust that facilitate coordination and cooperation for mutual benefit. Putnam recognized that in regions with high social capital, residents are engaged in public issues, they trust one another, and obey laws. Social and political institutions tend to be organized horizontally, rather than hierarchically. Solidarity, civic participation, and integrity all tend to be highly valued.

Putnam has observed that while social capital seems to be a precondition for economic development and effective government, it tends to be under-provided by private agents. He also noted that while US government programs such as the agricultural extension service and tax exempt status for non-profit community organizations has helped promote the growth of social capital, much could be done to further nurture the growth.

The World Bank has developed a list of indicators that can be used to measure social capital including:

• Democracy
• Corruption
• Independence of the court system
• Strikes, riots, and protests
• Prisoners per 100,000 people
• Extent of trust in the government and in trade unions
• Small credit availability
• Civil liberties
• Voter turnout

The teen pregnancy rate in the Klamath-Siskiyou bioregion is an example of a negative indicator of social capital. Both California and Oregon rank poorly in meeting the needs of teenage girls for contraceptives and have fairly high teen pregnancy rates. Teen pregnancy is linked to limited educational attainment, limited job skills, and a high probability of living in poverty. Teen mothers may be less likely to participate in their community through civic activity and volunteerism and their children are more likely to also become teen mothers.