Social capital Inequality

I found an interesting article yesterday, it's about the social capital inequality. Social capital is a productive asset generated from social connection. The theory is that : First, repeated interaction will increase trust among people in the society, higher networking abilities, making them able to get higher information, faster and sometimes better information than others. Second, trust and networks made collective action in establishing public goods is easier. I wrote about it implicitly here other supporters among economist and sociologists are here, opponents are here, as he mentioned the paper of sobel. In the paper sobel, stated that "One can acquire social capital through purposeful actions and can transform social capital into conventional economic gains", I think this is something we overlooked for some times, similar to the opponent above, quoting "trust" could be misleading phenomenon for the rich (he quoted thakshin sinawathra), but in some cases would be useful in acquiring information for the poor (rich people too?). Normally I would agree, as I consider information sharing is the greatest gift to human kind, but as Amartya sen would say, what will matter in the end is the capability of the poor, the freedom to use those information available. Back to the paper, I found that the paper is brilliant as it highlights the impact of inequality to the effectiveness of social capital, then social capital is indeed a source of poverty trap empirically.

how does it work exactly?
the ad-hoc approach of social capital in empirical analysis is trust indicator, and kinship relationships, but rarely significant (as my supervisor constantly reminded me..siggh..), it turns out that these indicators might affect people in both ways positive and negative, this allegedly conditional to the income level.

Poor people tend to be excluded socially and a subject of derogatory discrimination, therefore routinized relations and daily encounters between people generate social norms which shape patterns of inclusion as well exclusion of social activities. In other word, close relationship between people could constrain or enable the social structure of the poor.

Kinship variables, showing close relationship in siblings, or families, often seen as a remedy for risk alleviation for the poor, the poor will always be able to count on their relatives aid in case of unexpected external shock. The problem is, their families them self are poor, relying on them is not sufficient nor sustainable. Neighbor and friends closeness are considered in Putnam's work as a means of maintaining friends, and networks. The problem is the network it self was originally based on unequal status. The relations among people might be maintained just as close as clientage arrangement, as people acquire their resources by borrowing (credit), cheap labor (food exchange) which implies negotiations in their agreed terms, very often that the negotiation is not favorable for the poor. The paper stated "poor people relationships to those nearest to them in blood, marriage, and residence were therefore characterized by continuous supplication and unequal exchange".

In terms of collective action, social capital turns out to be less favorable to the poor, as the poor categorized with severe poor health and lack of food, which eventually lead to lack of productivity, therefore less opportunity to participate in a collective action and
thus less money gained for such activity. This is interesting, as this imply to different caste of poor, there are poor people, able to move on, accumulating resources overtime, and less fortunate poor, continuously sank to the bottom of the income distribution.

People should see poor as a singular, not plural word, then we would be able to see clearer, one is transitory, and one is chronic poor. Something failed to consider in ad-hoc static poverty measurement


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