Does social capital reduce poverty? A cross-sectional study of rural household in Bangladesh

Abstract

Purpose Social capital accrues to numerous positive socioeconomic outcomes, especially poverty reduction in developing countries. The purpose of this paper is to examine the relationship between social capital and poverty reduction with special reference to Bangladesh. Design/methodology/approach A cross-sectional study was conducted in a rural setting of north-eastern Bangladesh, where primary data were collected from 310 households. Exploratory factor analysis was pursued to extract multiple dimensions of social capital. Afterward, multivariate binary logistic regression model was applied to measure the association between social capital dimensions and poverty. In this model, odds ratios were used to present the regression coefficients. Findings The study confirms that social network, norms of reciprocity, social trust and civic participation were associated with poverty. The logistic regression reveals that social trust, social networks, norms of reciprocity and civic participation are negatively associated with poverty by OR=0.488, 95% CI=0.377–0.633; OR=0.709, 95% CI=0.542–0.927; OR=0.619, 95% CI=0.473–0.812; and OR=0.783, 95% CI=0.598–1.025 units. Originality/value This study has a significant policy implication related to reducing entrenched poverty in Bangladesh as social capital has a potential to bring about a concomitant improvement in the condition of the poor.