Putnam defines social capital as “features of social organization, such as networks, norms and social trust that facilitate coordination and cooperation ” (Putnam 1995: 67). Social networks are typically associated with social trust and with norms that promote coordination and cooperation for mutual benefit. Strong ties between individuals, infused with norms of reciprocity and trust, are often thought to help cooperation among them. They would enable these groups and society as a whole to deal smoothly and effectively with multiple social and economic issue. Other authors have noted that, in different contexts, strongly bonded groups may have adverse consequences for others (such as Portes and Landolt (1996)) or for themselves (see for instance Akerlof (1976) or Basu (1986)). Based on our earlier work on risk sharing in groups and networks (Genicot and