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My dissertation makes three important contributions to the development of the concept of social capital. The first contribution provides a systematic theoretical framework within which to study social capital. This framework builds on the understanding that the most important dimension of social capital is the institutionalization of generalized attitudes such as trust and norms of reciprocity. I identify three important areas in social capital research that suffer from insufficient theorizing and a lack of empirical research. These areas are (1) the study of the causes of institutionalization of generalized trust or lack thereof, (2) the building and testing of a micro-theory of social capital that elucidates the relationship between associational membership and generalized trust; and (3) the study of the consequences of the institutionalization of generalized trust. The additional contributions of my dissertation to the concept of social capital include empirical investigations in two of the three proposed research areas, the findings of which greatly modify and challenge current assumptions in social capital research. The second contribution pertains to the critical assumption in social capital theory that memberships in voluntary associations foster generalized trust. The problem with this assumption is that no empirical proof of this relationship exists, as the research to date has suffered from endogeneity problems, the lack of relevant data on group memberships, and the lack of a coherent micro- theory of social capital. In this dissertation, I provide the first empirical test of this important hypothesis with a unique self-collected data set that overcame most of the aforementioned problems. My findings verify our common understanding as developed by social capital research about the connection between membership in voluntary associations and trust, but they do not verify strongly that these types of interactions are