This article seeks to highlight the importance of social capital in good governance and its fragility and vulnerability to the state conduct and actions. Social capital is the cornerstone of the affluent society and efficient government. It is in the shadow of the maintenance, enforcement and accumulation of this valuable resource that society can benefit from the achievements of development and good governance. Hence, not only the state has to assess the consequences of its actions on social capital, but also it needs to provide a trustful social environment which makes confidence, willingness to keep promises, will to cooperation and assistance and entering the social networks meaningful and useful for the members of society. The author believes that by adjusting or removing such deficiencies as dysfunction in allocation, organizational recession, agency problem, corruption in public sector, and possible tensions and conflicts between politicians and bureaucrats, as well as reinforcing internal oversight, social capital provides the possibility for better supply of public management goods. On the one hand, the government can pave the way for the production of social capital through individual, social and institutional betterment, and preparing a trustful social environment, and on the other hand it may contribute to its destruction through weakening the constructive sources of social capital.
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