Social capital, houshold welfare, and poverty in Indonesia
The author 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, the author 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: A) Number of memberships. Each additional membership (an average of 20 percent increase) raises per capita household spending 1.5 percent. B) Internal heterogeneity. An increase of 20 percent in the heterogeneity index correlates with 3.3 percent more spending. C) Active participation in decision making. An increase of 20 percent in the participation index correlates with 3.2 percent more spending. The author 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.
|Date of creation:||31 Jul 1999|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thorbecke, Erik, 1991. "Adjustment, growth and income distribution in Indonesia," World Development, Elsevier, vol. 19(11), pages 1595-1614, November.
- Jonathan Isham, 2002.
"The Effect of Social Capital on Fertiliser Adoption: Evidence from Rural Tanzania,"
Journal of African Economies,
Centre for the Study of African Economies (CSAE), vol. 11(1), pages 39-60, March.
- Jonathan Isham, 2002. "The Effect of Social Capital on Fertilizer Adoption: Evidence from Rural Tanzania," Middlebury College Working Paper Series 0225, Middlebury College, Department of Economics.
- Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, World Bank Group, vol. 4(3), pages 351-66, September.
- Woolcock, Michael & Narayan, Deepa, 2000. "Social Capital: Implications for Development Theory, Research, and Policy," World Bank Research Observer, World Bank Group, vol. 15(2), pages 225-49, August.
- Isham, Jonathan & Narayan, Deepa & Pritchett, Lant, 1995. "Does Participation Improve Performance? Establishing Causality with Subjective Data," World Bank Economic Review, World Bank Group, vol. 9(2), pages 175-200, May.
- Narayan, Deepa & Pritchett, Lant, 1997.
"Cents and sociability : household income and social capital in rural Tanzania,"
Policy Research Working Paper Series
1796, The World Bank.
- Narayan, Deepa & Pritchett, Lant, 1999. "Cents and Sociability: Household Income and Social Capital in Rural Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 871-97, July.
- Sharma, Manohar & Zeller, Manfred, 1997. "Repayment performance in group-based credit programs in Bangladesh: An empirical analysis," World Development, Elsevier, vol. 25(10), pages 1731-1742, October.
- Uphoff, Norman, 1993. "Grassroots organizations and NGOs in rural development: Opportunities with diminishing states and expanding markets," World Development, Elsevier, vol. 21(4), pages 607-622, April.
- Besley, Timothy & Coate, Stephen, 1995.
"Group lending, repayment incentives and social collateral,"
Journal of Development Economics,
Elsevier, vol. 46(1), pages 1-18, February.
- Besley, T. & Coate, S., 1991. "Group Lending, Repayment Incentives And Social Collateral," Papers 152, Princeton, Woodrow Wilson School - Development Studies.
- Zeller, Manfred, 1996. "Determinants of repayment performance in credit groups," FCND discussion papers 13, International Food Policy Research Institute (IFPRI).
- Isham, Jonathan & Kaufmann, Daniel & Pritchett, Lant, 1995. "Governance and returns on investment : an empirical investigation," Policy Research Working Paper Series 1550, The World Bank.
- repec:fth:oxesaf:98-8 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2148. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.