Social capital, poverty, and regional development: a case study of rural households in bio-villages of Puducherry
Student name: Ms Nayan Dave
Guide: Dr Priya Bhagowalia
Year of completion: 2011
Host Organisation: MS Swaminathan Research Foundation
Supervisor (Host Organisation): Prof Kanchan Chopra
Abstract: Economists have traditionally focused on financial capital, physical capital and human capital as key
determinants of economic growth and a vast body of theoretical and empirical literature in growth
economics has examined these relationships. But the focus on these three types of capital often overlooks
a critical aspect in the process of economic growth in that they do not explain how economic actors
interact. One reason to value social capital is- because it can produce economic benefits and if neglected,
economic disadvantages. In this study, the relationship between social capital and poverty is examined.
The data employed are primary data, collected from a sample of 102 rural households of Bio-Village,
Puducherry, India. Bio-Village program conceptually is pro-poor, pro-women and pro-nature in
orientation. The Project seeks to bring about sustainable development through an integrated approach of
technological empowerment in which social mobilization is the key component. The area of this study
covers five Bio-Villages namely; Pilliyarkuppam, Sorapattu, Kizhur, Vambupet, Uttraivanipet.
Information on household demographic characteristics, income, human capital, physical assets (capital)
and social capital is collected. Social capital covers six dimensions: i) groups and networks, ii) trust and
solidarity, iii) collective action and cooperation, iv) information and communication, v) social cohesion
and inclusion, and vi) empowerment and political action. Social capital index for each household, in the
scale of 1 to 10, is calculated by applying a linear transformation technique. The three cases of social
capital are considered for analysis. The analysis in this study is based on logit model estimation.
Interestingly, the results show that social capital plays an important role in poverty alleviation, consistent
with the evidence in the recent literature. Other factors that are found to be important include human
capital, the age and sex of the head of the household. Thus, it is believed that social capital should be
given more attention in addressing the issue of poverty.
Keywords: Social capital; Poverty; Bio-Village; Logit model; Puducherry
