The ‘new rural paradigm’ in Europe, applied through the Rural Development Programmes (RDPs), places at the centre of academic analysis and policy formation the concept of ‘territorial dynamics’ as an important vehicle for growth in rural regions. The term denotes “specific regional and local factors, structures and tendencies” which would facilitate the creation of ‘smart places’ among EU regions – according to the 2020 EU strategy terminology – competitive on a regional and global scale. As ‘social capital’ lies at the centre of the above intangible elements this paper critically examines the contribution of the LEADER axis in promoting it, through its bottom-up and place-based approach. After a brief presentation of the programme’s philosophy and methods of application, its relationship with social capital elements is established. A discussion follows on the lack of sufficient attention to social capital in conventional evaluation methods of LEADER. LEADER’s efficiency in stimulating aspects of social capital in rural regions is assessed with reference to case studies on Greece, which appears to be a good case for highlighting the difficulties in applying the bottom-up approach in rural regions but also the challenges that this process involves in inducing territorial/regional development. This is due to the country’s low overall level of social capital resulting from a number of structural/social characteristics. The paper concludes with pointing out the need for more in-depth research on this topic so that lessons for local strategies can be drawn.