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Reducing rural poverty and hunger are two fundamental challenges. More
than a billion people still exist in conditions of abject poverty. Most of
them more than 800 million live in rural areas. Thus increasing the
wellbeing of rural people and sustaining the improvements are key goals
of most countries and all development agencies.
Rural communities be endowed with land and water (natural capital), but
they often do not have the skills (human capital) and organizations (social
capital) which are needed to turn the natural resources into physical assets.
Social capital is significant because it affects rural people’s capacity to
organize for development. Social capital helps groups to perform the
following key development tasks effectively and efficiently:
• Plan and evaluate – make decisions;
• Mobilize resources and manage them;
• Communicate with each other and coordinate their activities;
• Resolve conflicts.
These four tasks must be done in order to sustain individual and community wellbeing (Uphoff
1986).
Rural Communities Depend on Social Capital to Manage Risk
In rural communities, social ties are often strong and longstanding. Informal ties and social norms
provide essential safety nets. These safety nets are especially important because:
1. income and the availability of food vary with seasons and depending on weather;
2. in many countries there are no formal social programs or existing safety nets do not reach
people in villages.
• In India, the presence of local associations and networks enhanced the ability of poor
villagers to allocate resources efficiently and increased their resilience to hazards
(Townsend, 1994).
Social Capital Helps to Build Infrastructure and to Access Resources
Social capital is a mediator for collective action and can help people build common property
resources, such as fresh water wells (Ostrom, 1990). Not only can social capital improve access to
natural resources, it can also improve access to physical capital.
• The Grameen (Rural) Bank of Bangladesh provides access to credit to poor people in 35,000
villages. Members have developed rules to maximize repayment of loans, but trust plays a
critical role in the 98% success rate, particularly in the absence of collateral (Uphoff, Esman
and Krishna, 1997).
Participation Makes Rural Development Effective
Perhaps one of the most telling contributions of social capital is conceptual because "…it adds a
social dimension to the development equation of capital that has been mostly ignored in economic
explorations of determinants of poverty and household welfare" (Narayan, 1997:50). The positive
impact of social capital is now well recognized by governments and development agencies that
increasingly use decentralization and participatory strategies in their rural development activities.
• Experience with rural water users associations in countries as diverse as Pakistan, Cote
d’Ivoire and the USA, indicate that maintenance is more efficient and programs more likely
to be sustained if users are empowered to play a substantial role in running the systems
(Boerma 1995).
Downside of Social Capital in Rural Development
Enforceable group norms are not necessarily good for community members. Traditions can stifle
individual growth and creativity. Members who do not comply with norms and their families can be
ridiculed or ousted from the community.
• In SubSaharan Africa, some rural communities pressure elites who have moved to urban
areas to donate money and services to the community. Elites depend on the ethnic
community in the village where they grew up to take care of them in illness and old age,
especially in countries which have no formal safety nets. Elites therefore maintain a social
presence in the rural community by service (Bates 1989).