It pays for poor households to participate actively in local associations. At low incomes, the returns to social capital are higher than returns to human capital. At higher incomes, the reverse is true.

It pays for poor households to participate actively in local associations. At low incomes, the returns to social capital are higher than returns to human capital. At higher incomes, the reverse is true.Grootaert empirically estimates how social capital affects household welfare and poverty in Indonesia. His focus: household memberships in local associations, an aspect of social capital especially relevant to daily household decisions that affect welfare and consumption.The data suggest that households with higher social capital spend more per capita. They also have more assets, more savings, and better access to credit.To estimate how social capital contributes to household welfare, Grootaert uses a reduced-form model of household welfare, which controls for relevant household and location characteristics. He measures social capital along six dimensions: density of memberships, internal heterogeneity of associations (by age, gender, education, religion, and so on), meeting attendance, active participation in decision-making, payment of dues, and community orientation.The strongest effects come from:- Number of memberships. Each additional membership (an average 20 percent increase) raises per capita household spending 1.5 percent.- Internal heterogeneity. An increase of 20 percent in the heterogeneity index correlates with 3.3 percent more spending.- Active participation in decision-making. An increase of 20 percent in the participation index correlates with 3.2 percent more spending.Grootaert also estimates structural equations and uses instrumental variable estimation and historical data to address the possible endogeneity of the social capital variable and to demonstrate that the causality runs from social capital to household welfare.This paper - a product of the Social Development Department - is part of a larger effort in the department to assess empirically the role of local institutions in the delivery of services and poverty alleviation.

The authors empirically estimate the impact of social capital on household welfare in Bolivia--where they found 67 different types of local associations. They focus on household memberships in local associations as being especially relevant to daily decisions that affect household welfare and consumption. On average, households belong to 1.4 groups and associations: 62 percent belong to agrarian syndicates, 16 percent to production groups, 13 percent to social service groups, and 10 percent to education and health groups. Smaller numbers belong to religious and government groups. Agrarian syndicates, created by government decree in 1952, are now viewed mainly as community-initiated institutions to manage conmunal resources. They have been registered as legal entities to work closely with municipalities to represent the interests and priorities of local people in municipal decisionmaking. The effects of social capital operate through (at least) three mechanisms: sharing of information among association members; the reduction of opportunistic behavior; and better collective decisionmaking. The effect of social capital on household welfare was found to be 2.5 times that of human capital. Increasing the average educational endowment of each adult in the household by one year (about a 2.5-percent increase) would increase per capita household spending 4.2 percent; a similar increase in the social capital endowment would increase spending 9 to 10.5 percent. They measured social capital along six dimensions: density of memberships, internal heterogeneity of associations (by gender, age, education, religion, etc.), meeting attendance, active participation in decisionmaking, payment of dues (in cash and in kind), and community orientation. The strongest effect came from number of memberships. Active membership in an agrarian syndicate is associated with an average 11.5 percent increase in household spending. Membership in another local association is associated with a 5.3-percent higher spending level. Empirical results partly confirm the hypothesis that social capital provides long-term benefits such as better access to credit and a higher level of trust in the community as a source of assistance in case of need.

This new edited collection illustrates the paradoxical power of social capital in creating and resolving conflict. This is the first book to bring the two faces of social capital together in a single volume, and includes previously unpublished case studies, statistical analyses, and theoretical essays. The book is divided into three sections. The first investigates the role of social capital in inciting and/or furthering violence; the second examines the contributions of social capital to peace building; the third explores the complexities and ambiguities of roles social capital may play in peace and conflict. Policy implications and recommendations are included in many of the discussions in the chapters. The volume tackles some key issues, such as: to what extent is social capital related to peace and conflict? What forms does social capital take in these associations, and how can the relationships be explained? What impact does this have on the state and/or state relations, and what policy prescriptions might be made in light of the link drawn between social capital and peace/conflict? .

This work details various methods of gauging social capital and provides illustrative case studies from Mali and India. It also offers a measuring instrument, the Social Capital Assessment Tool, that combines quantitative and qualitative approaches.

The concept of social capital has become increasingly prominent in both the theoretical and applied social science literature over the last decade. This publication seeks to provide a set of empirical tools to measure social capital, focusing on its application in developing countries. The methodology aims to generate quantitative data on various dimensions of social capital as part of a larger household survey (such as the Living Standards Measurement Survey or a household income/expenditure survey). The paper also provides detailed guidance for the use and analysis of the data.