This week I spent time looking at social capital, which is a concept that overlaps as a social, economic, and political topic. In a 2007 study, Anirudh Krishna from Duke University examined the possibility of social capital growth in communities, specifically in 61 rural villages of India. Social capital has been shown to be important in strengthening democracy and promoting development, but relatively little is known about how social capital grows. Social capital is socially generated through the internal efforts of community groups. Indigenous self-initiated organizations and local leadership have helped to grow social capital, along with locally formulated rules and lower economic inequality in the initial period.
I encourage those interested in financial (economic) development in rural India to read, at least, the first 5 and last 3 pages of this study. International development agencies heavily rely on the concept of social capital - features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit - to enact transformation. Claire wrote about ReachGlobal and the self-empowerment work the org is doing with women in India through self-help groups. ReachGlobal is relying on social capital to create change! So are microfinance organizations (MFIs), like the Grameen Bank/Fund, Opportunity International, Accion, etc., who are doing work in India. They are banking (pun intended) on social capital growth with trust group forums - forums through which MFIs typically dispense funds in initial loans. For those going into the rural villages outside Pune, the building up of social capital is a topic that will likely come to the surface very quickly upon our arrival.
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