An Investigation into the Relationship between Household Welfare and Social Capital in Eastern Uganda

This paper studies the relationship between social capital and household welfare. Social capital is taken to mean, very simply, 'durable social networks'. The relationship is investigated using survey work conducted in two villages in eastern Uganda. The surveys gathered information on the quality and extent of people’s participation in local organizations, as well as household welfare. To organize the analysis of the data the paper utilizes econometric tools designed for investigating the relationship between dimensions of organizational social capital and household welfare. At the same time, the paper recognizes some of the limitations inherent in relying on econometric work to analyze this relationship. As such, the econometric analysis is limited in examining only social capital as expressed through household participation in village level organizations. Our results show that "organizational social capital", as we have termed it, has only a small effect on household welfare. That said, we also draw on anthropological work conducted in the two survey villages, and from ethnographic material we argue that social capital, as expressed in less institutionalized social networks, has a significant affect on household welfare. In others words, it is the social capital that resides in such networks as personalized relationships, peer groups, or brokerage positions between development projects and the village that has a strongly determinate effect on household. Organizational social capital, which is the type of social capital 'captured' in village level survey work, does not help us explain the most significant part of the relationship social capital and household welfare.