| Summary: | During the recent decade, scholars have started to pay more attention to how the local socio‐institutional environment affects the outcome of regional cross‐border co‐operation (CBC) programmes and projects. This paper studies the social capital processes of CBC, particular focus being on how power and trust relations are manifested in project networking and implementation governed by public authorities. The examination focuses on the border towns of Tornio (Finland) and Haparanda (Sweden) which share a common cultural history and a long tradition of co‐operation. The results, based on document analysis and 16 interviews, show that the CBC at Tornio‐Haparanda is not unproblematic but contested by different interest groups and actors. It involves practices of inclusion and exclusion that influence mobilisation, engagement and trust building between different actors. The social capital processes are intertwined with the local norms and values as well as with the strategic networking and pursuance of specific development objectives.
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