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By Christiaan Grootaert, Thierry van Bastelaer, Robert Puttnam

Formerly the position of social capital - outlined because the associations and networks of relationships among humans, and the linked norms and values - in courses of poverty relief and improvement has risen to enormous prominence. even supposing improvement practitioners have lengthy suspected that social capital does have an effect on the potency and caliber of so much improvement approaches, this booklet presents the rigorous empirical effects had to determine that influence and translate it into powerful and knowledgeable policymaking. it truly is in accordance with a wide quantity of amassed information, depending both on quantitative and qualitative study methodologies to set up methods for measuring social capital and its influence. The e-book records the pervasive position of social capital in accelerating poverty relief and rural improvement, facilitating the availability of products and prone, and easing political transition and restoration from civil conflicts.

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Better-connected traders enjoy significantly higher sales and gross margins than less well-connected traders, after controlling for physical and human inputs as well as entrepreneurial characteristics. This social capital enables traders to conduct business with one another in a more trusting manner, thereby reducing the costs of securing and providing credit, finding reliable price information, and carrying out quality inspections. Traders who do not develop the appropriate social capital do not expand their businesses.

In chapter 6, Pargal, Gilligan, and Huq explore the characteristics of those neighborhoods of Dhaka, Bangladesh, in which the community successfully organized voluntary waste management services. The authors develop measures of trust and norms of reciprocity and sharing among neighborhood residents as proxies for cognitive social capital; they use indicators of associational activity to estimate structural social capital. Their analysis shows that these variables have a large and significant impact on the probability that a neighborhood will organize for refuse collection.

Similarly, the sort of reciprocal social interaction suitable for reputation is very different from that suitable for learning about the world. Whereas the latter requires diversity, the former requires that agents in the network are sufficiently similar to know the same people (essentially, one another) and to have similar trading relationships. 28 Paul Collier Formally, Va = Va (trust, reputation). 6) trust = t(SI o , SI n , SI c , SI h ). 7) reputation = r (SI n , SI c ). 8) How important agent knowledge is depends partly on the substitutes available and partly on the alibis for opportunism.

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