Social Capital and Household Welfare: A Review of Contemporary Empirical Literature

Abstract

Most studies on social capital especially in Africa, have adopted econometric models in explaining its role in the different developmental paths of societies with similar endowments. From a historical perspective, relying on aggregative national survey data on social welfare, ‘wellbeing', ‘national happiness index' to an examination using increasingly structured proximate measures of formal community organisational activities, in particular, membership participation and benefits and their impact on the rural household welfare, almost to the exclusion of informal social capital. Although the influence of technology, especially with the increasing penetration, access and massive impact of the social media have stimulated further research interest in social capital, particularly in Europe and America, econometric modeling and analytical techniques still dominates, while most African researchers have been more interested in how formal social capital impact the welfare of the poor rural farming households as a way to develop rural communities. This paper argues, following an extensive review of the literature that the fixation with ‘econometric analysis' and ‘formal social capital', presents only a partial view - it does not explain the significant role of informal social capital - resources that inhere in informal, yet durable social networks and relations that characterise the community social structure and are encapsulated in its social history. The paper further opines that greater attention should be given to the role of informal social capital in rural household welfare enhancement towards creating a structured role for kinship based groups in the development process, stripping them of the ‘negative', ‘anti-development' toga and optimise their potential capacity for mobilisation of rural poor households for active participation in the design and implementation of pro-poor policies and schemes. It would also help redirect research efforts and provide the much-needed evidence for realistic policies especially on ‘bottom-up', community participatory implementation strategy for developing rural communities.