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Catalyst of Constraint? On the Complex Role of Social Capital in Transitioning Rural Economies
This dissertation concerns itself with poverty amongst the rural poor, and specifically with contributing to the set of tools and policies that can effectively improve their economic wellbeing. Rural communities in developing countries play host to the majority of the world?s poor. Widespread and persistent poverty has led to a growing appreciation of the unique set of obstacles limiting economic growth and progress in rural communities. It is now widely accepted that economic behavior, especially in more traditional communities, is imbedded within a socio-cultural system that circumscribes the space of economic possibilities and outcomes. The dominant view has it that the highly personalized nature of social interaction common to rural communities can be harnessed as productive ?social capital? to support economic interaction in the absence of formal market institutions. The three papers of this dissertation aim to contribute to the existing literature on the social economics of development that goes beyond the myopic view of social capital as a productive input to economic endeavor. They each emphasize the importance of a nuanced, context-specific understanding of how the set of shared norms, behaviors and expectations characteristic of rural environments interact and co-evolve with an emerging market economy. In three different settings I demonstrate how the na?ve and generalized application of social capital as a productive resource limits welfare growth, supports ineffective institutions and promotes faulty policy instruments. The first paper shows how spatially-varied returns to human capital that fuel migration may diminish the capacity of social capital to support informal contract enforcement. The second paper demonstrates how microfinance institutions whose design relies on an inadequate characterization of social capital may actually erode the very social forces it hopes to exploit. Finally, the third paper highlights how increasing material incentives coupled with a dysfunctional mix of informal institutions and formal regulations can breed rent-seeking that adversely affects the welfare and productivity of the majority of members in a producer organization. The contribution of this dissertation is to cast a spotlight on how specific features of the socioeconomic landscape interact to jointly determine the space of economic outcomes and the trajectory of social change. In doing so, it informs the design of appropriate policies and institutions that provides the rural poor with a level-playing field and promotes the set of incentives crucial for effective economic transacting.
Rural Development; Socio-Economic Institutions
dissertation or thesis