The research addresses the missing link between social capital
and analyses of household welfare and poverty. First the relationship
between social capital and household welfare is analysed using a social
capital index and a heterogeneity index. The social capital index is
calculated using different dimensions: density of membership, attendance
at meetings, cash and kind contributions and decision making in local
organisations/associations. Heterogeneity index is based on differences
in incomes, ethnicity, education and political affiliations in the
composition of organisations. Endogeneity of social capital with
household expenditure is tested through an Instrumental Variable
approach. The relationship between social capital and probability of
being poor is analysed through a logit model. The analysis uses data
collected form 1050 households in and around the cities of Karachi,
Lahore and Quetta. The main results indicate that social capital
(however measured) has a positive impact on the welfare of the
household. The study concludes that social capital and human capital
have the same returns. A powerful result of the research is that
households with social capital at their disposal are likely to be less
poor and that poverty is less when households share risks though
building associations and through collective action. The research has
some policy implications which can be useful in building up social
capital in the country.
Household Welfare and Poverty Dynamics in Burkina Faso: Empirical Evidence from Household Surveys
