Can Social Capital Reduce Poverty? A Study of Rural Households in Eastern Bhutan

Galey Tenzin, Kozo Otsuka and Kaoru Natsuda

Asian Economic Journal, 2015, vol. 29, issue 3, 243-264

Abstract: type="main">

This study examines the impact of social capital on the poverty of rural households in eastern Bhutan, with a particular focus on households' participation in community groups, which can be a proxy for the structural aspect of social capital. Using a two-stage probit least squares simultaneous equation model, the present study reveals that social capital positively contributes to poverty reduction in Bhutan. This study also finds that non-farm income is important for poverty reduction in rural areas. Our results, however, indicate that poor households in remote areas are discouraged from participating in community groups.

Date: 2015
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