Social capital and poverty reduction: empirical evidence from Senegal

Social capital has been described as an empirically elusive concept, yet has also been heralded as the glue that holds communities together. The objective of this paper is to show that associational relationships, social norms and cohesion are important in partly explaining the poverty status of the household heads in Senegal. We make use of the 2005 Senegalese Household Survey to construct an index of social capital and show that it is correlated with the economic situation of the households. The instrumental variables estimations suggest that social capital has an impact on poverty. Besides, after disaggregating our sample based on the gender and location of the household head, our results still show the evidence that household heads with more social capital are less likely to be poor. The findings of this study support recent emphasis by international community and specialists of development economics on investing in social capital. Senegal being representative of other sub-Saharan African countries (capital social is traditionally and culturally important in Sub-Saharan Africa), governments in the continent need to take into account social capital in the formulation of public policies. Besides, encouraging the creation of and sustaining the existing social capital might be of great importance for poverty reduction purposes in sub-Saharan Africa.