Can weak ties create social capital? Evidence from Self-Help Groups in rural India

Abstract

• Can membership of self-help groups (SHGs), designed for enhancing livelihoods, create social capital for women? • We find that it can, even when the livelihoods are negligible. • Membership of SHGs increases personal efficacy and propensity for collective action. • Social capital generated by SHG membership is a significant positive impact as it strengthens the process of women’s empowerment. The “strength of weak ties” has been established in the context of labour market outcomes, with theoretical and empirical investigation showing how weak ties lead to an increase in mobility and job opportunities. The impact of weak ties on community organisation is less well understood. We contribute to this literature by investigating if weak ties, generated via membership of livelihood programmes, can lead to the creation or enhancement of social capital. Based on data from one of the largest independent primary surveys for India, we find that participation in self-help groups had little impact on livelihoods, but led to the creation of significant social capital, as measured by indicators related to personal efficacy and collective action. We use Entropy Balancing to estimate mean effects to tackle the problem of non-random selection into the programme. In contrast to the bulk of existing evidence on livelihood programmes that is based on small samples, our large sample size and innovative survey design allow us to detect a larger number of effects with greater certainty. We argue that the social capital generated by the programme is a significant positive impact (even though the main target of the programme is to strengthen livelihoods), as it strengthens the process of women’s empowerment.