Diaspora, social entrepreneurs and community development

Purpose - In view of significance of social entrepreneurial activity for community development, the purpose of this paper is to attempt to identify attributes of social entrepreneurs and philanthropists among returning successful diaspora in North Indian villages. Philanthropists are defined by the fact that they only invest money, whereas the social entrepreneurs invest their activities as well. An attempt is also made to ascertain key determinants and processes influencing outcomes of social entrepreneurial activity with a view to facilitate it. Design/methodology/approach - Emphasis is on qualitative analysis based on interviews of scientifically sampled respondents. However, the paper suggests that the rational choice approach is inappropriate to address the issue of community development. An approach based on a broader view of man in works of some classical economists like Adam Smith is more useful. Findings - The results of empirical analysis suggest that there exist substantial factors, such as early socialization, experience in community work, education and health, that differentiate social entrepreneurs and philanthropists. Salience of relationship between formal and informal institutions, personal traits and social skills of social entrepreneurs in influencing outcomes of social entrepreneurial activity is indicated. By investing moral and material resources in communities, social entrepreneurs augment social capital and facilitate social action. In contrast, philanthropists may add to distortions in community functioning, especially if they opt to operate through largely dysfunctional formal local institutions due to structural impasse in rural areas. Research limitations/implications - The paper pertains to Indian Punjab, an area with a long history of emigration. However, researchers need to take into account distinct socio‐economic conditions in Punjab when designing studies for other areas. Practical implications - Policy measures addressing hurdles in the way of social entrepreneurial activity can speed up the modernization of traditional communities. Originality/value - The paper adds to understanding of what motivates human behaviour in economic analysis of community development. Further, it makes an important distinction between the roles of the philanthropist and the social entrepreneur in community development. The paper would be useful to researchers desirous of doing similar exercises in other areas.