Local Institutions, Poverty, and Household Welfare in Bolivia

The authors empirically estimate the impact of social capital on household welfare in Bolivia--where they found 67 different types of local associations. They focus on household memberships in local associations as being especially relevant to dail...

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Bibliographic Details
Main Authors:	Grootaert, Christiaan, Narayan, Deepa
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTABILITY AGED AGRO-ECOLOGICAL ZONES AUTONOMOUS ORGANIZATIONS BASIC SERVICES CITIZEN CLIMATE COLLECTIVE ACTION COLLECTIVE DECISIONMAKING COMMUNITY ASSISTANCE COMMUNITY LEADERS COMMUNITY LEVEL COMMUNITY ORGANIZATION COMMUNITY SERVICES CULTURAL IDENTITY DATA COLLECTION DATA SET DATA SETS DEMOCRACY DEMOCRATIC STATE DEVELOPMENT NETWORK DISCRIMINATION ECONOMIC ACTIVITY ECONOMIC CHARACTERISTICS ECONOMIC CONTEXT ECONOMIC MANAGEMENT ECONOMIC REFORMS ECONOMIC STRUCTURE EDUCATION LEVEL EMPLOYMENT EMPLOYMENT STATUS ETHNIC GROUPS EXPENDITURE PER CAPITA EXTREME POVERTY FIELD WORK FINANCIAL SUPPORT FORMAL INSTITUTIONS GIRLS GROWTH RATES HEALTH CENTERS HOSPITALS HOUSEHOLD DURABLES HOUSEHOLD EXPENDITURE HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD LEVEL HOUSEHOLD MEMBERS HOUSEHOLD SAMPLE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSING HUMAN CAPITAL INCIDENCE OF POVERTY INCOME INCOME GROWTH INDIGENOUS GROUPS INDIGENOUS PEOPLES INEQUALITY INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL ENVIRONMENTS ISOLATION LAND REDISTRIBUTION LAND REFORM LAND TENURE LOCAL ASSOCIATIONS LOCAL DEVELOPMENT LOCAL ECONOMY LOCAL GOVERNMENT LOCAL GRASSROOTS ORGANIZATIONS LOCAL INSTITUTIONS LOCAL LEVEL LOCAL PEOPLE MANAGERS MIGRANTS MIGRATION MUNICIPAL GOVERNMENT MUNICIPAL GOVERNMENTS MUNICIPALITIES MUNICIPALITY NATIONAL LEVEL POLICY IMPLICATIONS POLICY RESEARCH POLITICAL PARTIES POOR COUNTRIES POOR PERSON POVERTY ISSUES POVERTY LINE POVERTY REDUCTION PRIMARY EDUCATION PRIMARY SCHOOL PRIVATE TRANSFERS PROVISION OF SERVICES PUBLIC ENTERPRISES PUBLIC SECTOR QUALITATIVE DATA QUALITY OF SERVICE QUANTITATIVE DATA RADIO RELATIVE POVERTY RELIGIOUS GROUPS RESEARCH TEAM RESOURCE ALLOCATION RURAL AREAS RURAL COMMUNITIES RURAL POPULATION RURAL POVERTY SAMPLE HOUSEHOLDS SAMPLING FRAMEWORK SCHOOLS SERVICE DELIVERY SERVICE PROVISION SOCIAL CAPITAL SOCIAL COHESION SOCIAL DEVELOPMENT STRUCTURAL ADJUSTMENT SUSTAINABLE DEVELOPMENT UNEQUAL DISTRIBUTION URBAN AREAS URBAN POVERTY VILLAGE SOCIAL CAPITAL WATER RESOURCES WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2001/07/1552002/local-institutions-poverty-household-welfare-bolivia http://hdl.handle.net/10986/19594

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Summary:	The authors empirically estimate the impact of social capital on household welfare in Bolivia--where they found 67 different types of local associations. They focus on household memberships in local associations as being especially relevant to daily decisions that affect household welfare and consumption. On average, households belong to 1.4 groups and associations: 62 percent belong to agrarian syndicates, 16 percent to production groups, 13 percent to social service groups, and 10 percent to education and health groups. Smaller numbers belong to religious and government groups. Agrarian syndicates, created by government decree in 1952, are now viewed mainly as community-initiated institutions to manage conmunal resources. They have been registered as legal entities to work closely with municipalities to represent the interests and priorities of local people in municipal decisionmaking. The effects of social capital operate through (at least) three mechanisms: sharing of information among association members; the reduction of opportunistic behavior; and better collective decisionmaking. The effect of social capital on household welfare was found to be 2.5 times that of human capital. Increasing the average educational endowment of each adult in the household by one year (about a 2.5-percent increase) would increase per capita household spending 4.2 percent; a similar increase in the social capital endowment would increase spending 9 to 10.5 percent. They measured social capital along six dimensions: density of memberships, internal heterogeneity of associations (by gender, age, education, religion, etc.), meeting attendance, active participation in decisionmaking, payment of dues (in cash and in kind), and community orientation. The strongest effect came from number of memberships. Active membership in an agrarian syndicate is associated with an average 11.5 percent increase in household spending. Membership in another local association is associated with a 5.3-percent higher spending level. Empirical results partly confirm the hypothesis that social capital provides long-term benefits such as better access to credit and a higher level of trust in the community as a source of assistance in case of need.

Local Institutions, Poverty, and Household Welfare in Bolivia

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