Research On Social Capital And Rural Poverty Alleviation

The role of social capital playing to the poor is not only important but also subtleand complicate. It’s full of controversy as to the proposition saying that "social capitalis the capital of the poor ". Some authors thought that in the less developed areaswhere the market institution is not complete, social capital can make up of thefunctions of market to some extent, and they found that the return of social capital ishigher for the poor than the non-poor and is higher than other forms of capital for thepoor, so they claimed that "social capital is the capital of the poor"; while some otherauthors said that social capital and physical capital were complements, as the return ofsocial capital is higher in the households with more physical capital and lower inhouseholds with less physical capital, so they thought that social capital can not beconsidered as "the capital of the poor". This paper focuses on the theme of socialcapital and rural poverty alleviation, analyzing the differences of the definitions andresearch methods of social capital in different literatures, using China’s data to doempirical analysis and constructing a new framework to reconcile the differentviewpoints of the social capital. On this basis, we analyze how to construct reasonablesocial capital in the poverty alleviation policy to get better performance. This paperconcludes that different aspects of social capital have different functions in the poorareas, and the role it plays vary with areas and personal characteristics.The research of this paper focuses on the following three respects: first of all,taking households in poor areas in China as research object, using hierarchical linearregression method, distinguishing the household level and village level social capitalvariables, by constructing the households social capital variables and the interactionof the level of village development to test whether there are significant differencesbetween the different village in the role of social capital. We get two forms of "thecapital of poor"—participating in the village affairs, the relationship with the villagecadres, considering that in the empirical results the coefficients of the cross-sections issignificantly negative. According to the results, in the less developed villages, the effects of social capital are more significant. Other forms of social capital such as theharmony with the neighborhood, the trust level to policies, do not have significantcross-section coefficients. Non-monetary social capital significantly lower theprobability of being poor, but its effects declines with the village development levelsand weakens as the poverty relief fund increases. This shows that social capital isimportant to the poor, but the existing poverty alleviation policies have "crowd-out"effect with the social capital. Secondly, using the data of CHIPS, we study thedifferences for the role of social capital play in households with different assets. Wefind that, as there exists asset threshold in adopting new technologies, the householdswith less assets can not develop with new technologies. Meanwhile, we find out that,there also exists wealth threshold in the effects of social capital to the householdwelfare, as in the households with less assets the role of social capital is notsignificant. Hence social capital and physical capital are complements under somecircumstances. Lastly, taking the empirical results as the basic assumptions, we usethe method of agent based model to research in a social network with high returntechnology, if a larger social network can lower the technology adoption threshold,how social capital affect the welfare of households and how the effects of policytargeting changes. The simulation results find that, in a steady network, targeting thehouseholds with wealth higher than the absolute poverty line and lower than thetechnology adoption threshold has the maximum effects in increasing total output,while the targeting to the absolute poor has the minimum effects in increasing totaloutput but it has maximum effect in improving the equality; in the dynamic network,targeting to the absolutely poor can has maximum effect both in increasing totaloutput and improving equality.The policy implications of this paper are as follows: as the productive povertyrelief policy can not benefit all the poor people equally, the poor household with leastassets can not get benefit from the programs, but social capital construction canimprove this situation especially in lowering the technology adoption threshold.Therefore we should put more importance on the building the social capital for therural poor, improving their ability in participating social activities particularly in participating the village management and taking part in professional associations,which can significantly benefit the households’ welfare. Because there exists assetthreshold in the adoption of new technologies, in the implementation of povertyreduction policies we should take full account of the ability of households involved inthe project, and implement different poverty alleviation projects depending on thedifferent assets thresholds. For the absolutely poor households we should mainlyimplement a direct transfer payment; on the other hand, we should strengthen theconstruction of rural social capital, especially enlarging the rural fundamentalassociations and social network, which have great importance to to promote theimplementation of the Poverty Alleviation Project. In a more active and opencommunity, pro-poor policies on the poorest population can get the best results inincreasing output and improving fairness, and thus in the design of the system weshould provide more social opportunities for the poor in order to improve theeffectiveness of pro-poor policies.In the end, this paper summarizes some of the defects and deficiencies that stillexist in the paper concerning data and methods, including: in the empirical study ofsocial capital the selection of the indicators is still relatively limited, in which we lackdynamic inspection of the real social capital networks. The use of the experimentaleconomics methods as well as research on practical policy in the social capitalresearch is the direction of social capital and rural poverty reduction issues that needfurther efforts.