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Many argue that social capital is central to the process of economic development. However the notion has been difficult to capture in a coherent framework. This paper posits trustworthiness as the economically relevant component of social capital. People are trustworthy when they perform actions they have promised even when these do not maximize their payoffs. The usual focus on incentive structures in motivating behavior plays no role here. Instead we emphasize more deep-seated modes of behavior and consider that trustworthy agents are socialized to act as they do. To model this process of socialization we borrow from the framework pioneered by Bisin and Verdier (2001). The model developed endogenously accounts for social capital and explores its role in the process of economic development. It captures in a simple way the interaction between social capital and the economy's productive processes. The results obtained caution against rapid reform, provide an explanation for why late developing countries cannot easily transplant the institutions that were useful in the West, and suggests an explanation for the pattern of reform experiences in ex-communist countries.