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27/07/2021
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Do, N. K., & Minamoto, Y. (2021). The impacts of social capital on rural household’s income: empirical evidence from rural Vietnam. Journal of International Economics and Management, 21(2), 24-46. https://doi.org/10.38203/jiem.021.2.0027
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The impacts of social capital on rural household’s income: empirical evidence from rural Vietnam
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Abstract
This study empirically examines how social capital affects household income in rural Vietnam using the VARHS 2012-2014 surveys. We operationalized four forms of social capital, which are formal social networks, informal social networks, government connection, and general trust. We illustrate that social capital is abundant and has positive impacts on household income in rural Vietnam. Among many dimensions of social capital, political and governmental connectivity is fundamentally essential for improving household income. Approaching governmental organizations through the friend network is much more effective than the relative network or family member network. This study provides evidence that informal network is also important. Connecting to the community through the participation of wedding ceremonies increases spiritual well-being and works as a type of social capital to increase household income. Surprisingly, we find no positive impact of general trust and other massive organizations, which are often claimed to be necessary, such as the Farmer Association or the Women Association.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Keywords
Social capital, Household income, Social organization
References
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Narayan, D. and Pritchett, L. (1999), “Cents and sociability: household income and social capital in rural Tanzania”, Economic Development and Cultural Change, Vol. 47 No. 4, pp. 871 - 897.
Newman, C., Tarp, F. and Broeck, K. (2014), “Social capital, network effects, and saving in rural Vietnam”, Review of Income and Wealth, Vol. 60 No. 1, pp. 79 - 99.
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Portes, A. (1998), “Social capital: its origins and applications in modern sociology”, Annual Review of Sociology, Vol. 24 No. 1, pp. 1 - 24.
Portes, A. (2000), “The two meanings of social capital”, Sociological Forum, Vol. 15 No. 1, pp. 1 - 12.
Putnam, R.D., Leonardi, R. and Nanetti, R.Y. (1993), Making democracy work: civic traditions in modern Italy, Princeton University Press, New Jersey.
Quan, D.V. (2014), “Promoting the role of social capital in building new rural areas”, Available at https://tapchitaichinh.vn/nghien-cuu--trao-doi/trao-doi-binh-luan/phat-huy-vai-tro-cua-vonxa-hoi-trong-xay-dung-nong-thon-moi-88283.html (Accessed 03 March, 2021).
Sabatini, F. (2008), “Social capital and the quality of economic development”, Kyklos, Vol. 61 No. 3, pp. 466 - 499.
Tuyet, N.T.A. (2012), “Social capital in the management and development of rural areas in our country today”, Sociology, Vol. 2 No. 118, pp. 33 - 40.
Tuong-Anh, N.T. and Quynh-Anh, T. (2015), “Social capital in rural areas of Vietnam and its impact on households’ life satisfaction”, Journal of Economics and Development, Vol. 17 No. 3, pp. 60 - 88.
Wiessinger, G. (2007), “The importance of social capital in rural development, networking and decision-making in rural areas”, Journal of Alpine Research - Revue de Géographie Alpine, Vol. 95 No. 4, pp. 43 - 56.
Woolcock, M. (1998), “Social capital and economic development: toward a theoretical synthesis and policy framework”, Theory and Society, Vol. 27 No. 2, pp. 151 - 208.
Woolcock, M. and Narayan, D. (2000), “Social capital: implications for development theory, research, and policy”, The World Bank Research Observer, Vol. 15 No. 2, pp. 225 - 249.
Bowles, S. and Gintis, H. (2002), “Social capital and community governance”, The Economic Journal, Vol. 112 No. 483, pp. F419 - F436.
Burt, R.S. (1997), “The contingent value of social capital”, Administrative Science Quarterly, Vol. 42 No. 2, pp. 339 - 365.
Coleman, J.S. (1988), “Social capital in the creation of human capital”, The American Journal of Sociology, Vol. 94, pp. S95 - S120.
Coleman, J.S. (1990), Foundations of social theory, Harvard University Press, Cambridge.
Collier, P. (2002), “Social capital and poverty: a microeconomic perspective”, in Puttnam, R., Grootaert, C. and Van Bastelaer, T. (Eds.), The Role of Social Capital in Development: an Empirical Assessment, Cambridge University Press, Cambridge, pp. 19 - 41.
Cuong, L.V., Ngoc-Anh, N., Ngoc-Minh, N. and Simioni, M. (2018), “Growth strategy with social capital, human capital and physical capital - Theory and evidence: the case of Vietnam”, Journal of Public Economic Theory, Vol. 20 No. 5, pp. 768 - 787.
Duranton, G. and Kerr, W. (2018), “The logic of agglomeration”, in Clark, G.L., Feldman, M.P., Gertler, M.S. and Wójcik, D. (Eds.), The New Oxford Handbook of Economic Geography, Oxford University Press, Oxford, pp. 347 - 365.
FAO. (2014), “Promoting economic diversification and decent rural employment towards greater resilience to food price volatility”, Available at http://www.fao.org/fileadmin/user_upload/fao_ilo/pdf/Papers/DRE_Food_ Price_Volatility.pdf (Accessed 03 March, 2021).
Fujita, M. and Thisse, J.F. (1996), “Economics of agglomeration”, Journal of the Japanese and International Economies, Vol. 10 No. 4, pp. 339 - 378.
Granovetter, M.S. (1973), “The strength of weak ties”, American Journal of Sociology, Vol. 78 No. 6, pp. 1360 - 1380.
Grootaert, C. (1998), “Social capital: the missing link?”, Social Capital Initiative Working Paper Series No. 3, World Bank Group, Available at http://documents.worldbank.org/curated/en/902971468764409654/Social-capital-the-missing-link (Accessed 03 March, 2021).
Grootaert, C., Oh, G.T. and Swamy, A. (2002), “Social capital, household welfare and poverty in Burkina Faso”, Journal of African Economies, Vol. 11 No. 1, pp. 4 - 38.
Ha, N.V., Kant, S. and MacLaren, V. (2004), “The contribution of social capital to household welfare in a paper-recycling craft village in Vietnam”, The Journal of Environment & Development,
Vol. 13 No. 4, pp. 371 - 399.
Hoyman, M., McCall, J., Paarlberg, L. and Brennan, J. (2016), “Considering the role of social capital for economic development outcomes in U.S. counties”, Economic Development Quarterly, Vol. 30 No. 4, pp. 342 - 357.
Jumirah, J. and Wahyuni, H. (2018), “The effect of social capital on welfare in Indonesia”, Journal of Indonesian Economy and Business, Vol. 33 No. 1, pp. 65 - 76.
Krugman, P. (1991), “Increasing returns and economic geography”, Journal of Political Economy, Vol. 99 No. 3, pp. 483 - 499.
Lam, H. and Khanh, T.X. (2019), “Communist party member in the new rural area”, Nhan Dan’s Newspaper, Available at https://nhandan.com.vn/chinhtri/dang-va-cuoc-song/item/39682102-nguoi-dang-vien-o-vung-nong-thon-moi.html (Accessed 03 March, 2021).
Levien, M. (2015), “Social capital as obstacle to development: brokering land, norms, and trust in rural India”, World Development, Vol. 74, pp. 77 - 92.
Lewis, W.A. (1954), “Economic development with unlimited supplies of labour”, The Manchester School, Vol. 22 No. 2, pp. 139 - 191.
Lucas, R.E. (1988), “On the mechanics of economic development”, Journal of Monetary Economics, Vol. 22 No. 1, pp. 3 - 42.
Markussen, T. (2017), “Social and political capital in rural Vietnam”, in Tarp, F. (Ed.), Growth, Structural Transformation, and Rural Change in Viet Nam: A Rising Dragon on the Move, Oxford University Press, Oxford, pp. 181 - 201.
Moyes, D., Whittam, G. and Ferri, P. (2012), “A conceptualization of the relationship capital of rural small service firms”, Local Economy, Vol. 27 No. 2, pp. 136 - 151.
Nam, V.H., Sonobe, T. and Otsuka, K. (2009), “An inquiry into the transformation process of villagebased industrial clusters: the case of an iron and steel cluster in northern Vietnam”, Journal of Comparative Economics, Vol. 37 No. 4, pp. 568 - 581.
Nam, V.H. (2014), “The roles of human and social capital in the development of manufacturing SMEs in Vietnam”, Journal of Economics and Development, Vol. 16 No. 1, pp. 5 - 22.
Narayan, D. and Pritchett, L. (1999), “Cents and sociability: household income and social capital in rural Tanzania”, Economic Development and Cultural Change, Vol. 47 No. 4, pp. 871 - 897.
Newman, C., Tarp, F. and Broeck, K. (2014), “Social capital, network effects, and saving in rural Vietnam”, Review of Income and Wealth, Vol. 60 No. 1, pp. 79 - 99.
Ngan, D.T. (2014), The role of social capital in building new rural areas (a case study of Thuong Mo commune, Dan Phuong district, Hanoi city), Master’s Thesis, VNU University of Social Sciences and Humanities, Hanoi.
Portes, A. (1998), “Social capital: its origins and applications in modern sociology”, Annual Review of Sociology, Vol. 24 No. 1, pp. 1 - 24.
Portes, A. (2000), “The two meanings of social capital”, Sociological Forum, Vol. 15 No. 1, pp. 1 - 12.
Putnam, R.D., Leonardi, R. and Nanetti, R.Y. (1993), Making democracy work: civic traditions in modern Italy, Princeton University Press, New Jersey.
Quan, D.V. (2014), “Promoting the role of social capital in building new rural areas”, Available at https://tapchitaichinh.vn/nghien-cuu--trao-doi/trao-doi-binh-luan/phat-huy-vai-tro-cua-vonxa-hoi-trong-xay-dung-nong-thon-moi-88283.html (Accessed 03 March, 2021).
Sabatini, F. (2008), “Social capital and the quality of economic development”, Kyklos, Vol. 61 No. 3, pp. 466 - 499.
Tuyet, N.T.A. (2012), “Social capital in the management and development of rural areas in our country today”, Sociology, Vol. 2 No. 118, pp. 33 - 40.
Tuong-Anh, N.T. and Quynh-Anh, T. (2015), “Social capital in rural areas of Vietnam and its impact on households’ life satisfaction”, Journal of Economics and Development, Vol. 17 No. 3, pp. 60 - 88.
Wiessinger, G. (2007), “The importance of social capital in rural development, networking and decision-making in rural areas”, Journal of Alpine Research - Revue de Géographie Alpine, Vol. 95 No. 4, pp. 43 - 56.
Woolcock, M. (1998), “Social capital and economic development: toward a theoretical synthesis and policy framework”, Theory and Society, Vol. 27 No. 2, pp. 151 - 208.
Woolcock, M. and Narayan, D. (2000), “Social capital: implications for development theory, research, and policy”, The World Bank Research Observer, Vol. 15 No. 2, pp. 225 - 249.