Social Capital and Rural Economic Development in Western Province of Kenya: An Empirical Analysis
This study sought to fill an information gap on the determinants of social capital and its impact on rural economic development. The overall objective of this study was to examine formation of social capital and its role in rural economic development in Western province of Kenya. A survey design was adopted in which both primary and secondary data were collected from household heads, officials of organized community groups, selected opinion leaders in the study area and official records, between August 2006 and February 2007. Questionnaires, personal interview and focus group discussions were used to collect primary data, while secondary data were obtained from relevant government departments and governmental and non-governmental organizations‟ records. The data were analyzed both qualitatively and quantitatively. Parametric and non-parametric methods were employed in quantitative analysis. First, indices for both social capital and rural economic development outcomes were non-parametrically computed using weighted responses to specific questions. Then their determination was analyzed using the ordinary least squares method. A linear regression model was used to examine the determinants of social capital, while log-linear regression models were used to analyze the relationships between social capital and the three disaggregated outcomes of economic development, as well as the aggregate economic development outcome. The results show that household social capital was determined by ethnocentrism (clannishness), witchcraft beliefs, sub-location social capital, social interaction and community group activity. The aggregate household economic development was determined by household labor, sub-location physical capital, household social capital, household physical capital, probability of accessing financial capital, sex of the household head and social taxation. All outputs, as well as the aggregate outcome of household economic development process yielded positive elasticities with respect to household social capital. This implies that social capital was an important input into the rural economic development process. However, the study faced two main limitations: first, was lack of cooperation from a few of the sampled household heads and secondly, some problem of multicollinearity in the data. Nonetheless, the study recommends mobilization of rural communities against cultural practices such as belief in witchcraft and ethnocentrism as well as provision of networking opportunities for organized community groups in rural areas to enhance formation of social capital and promote rural economic development.