Trust, Membership in Groups, and Household Welfare: Evidence from KwaZulu‐Natal, South Africa*

By L. Haddad, J. Maluccio. Economic development and cultural change, 2003

121 citations recorded by the source corpus.

Unfortunately these two literatures have remained largely unconnected. The group and network literature concludes that participation has important economic benefits even when the stated function of the group is noneconomic. In most cases however the mechanisms by which groups and networks achieve this are unclear. The determinants-of-trust and participation-in-groups literature highlights the importance of income and social homogeneity. What remains less understood is whether—and how—trust can be generated for example via participation in groups. This article links the empirical literatures referenced above by exploring the relationship between membership in groups and trust. Specifically using longitudinal data from KwaZulu-Natal Province South Africa we examine (1) the importance of trust in the decision to join groups; (2) the subsequent ability of groups to generate trust; and (3) the effect of group membership and trust on a measure of well-being per capita household income. In addition we disaggregate groups into financial and nonfinancial and we categorize “trust in people” by agent or actor. Therefore we can explore whether trust in different kinds of actors is important for participation in different kinds of groups and whether participation in different kinds of groups is important for generating trust in different kinds of actors. (excerpt)

Subfields: Economics and Econometrics, Safety Research, Urban Studies

View Paper: https://www.semanticscholar.org/paper/91e4926a9e7d77fab04ecdd97d212895c9551e24

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Marcel Fafchamps

Citations in the corpus

Cross-Racial Envy and Underinvestment in South Africa (2006, background): “In a closely connected study, Haddad and Maluccio (2003) conduct householdlevel research in KwaZulu-Natal.”
Formal and Informal Institutions and Development (2010, unknown): “…the poorest from group-based microfinance (Morduch, 1999; Rogaly & Roche, 1998; Gomez & Santor, 2001; Paxton, Douglas, & Thraen 2000) and the costs and benefits associated with familyor ethic group based business networks (Ben-Porath, 1980; Haddad & Maluccio, 2005; Sivramkrishna & Panigrahi, 2001).”
Development and social capital (2006, background): “Illustrations of this approach can now be found in numerous papers, notably in many of the papers on social capital produced by the World Bank as well as in Carter and Maluccio (2003), Maluccio et al., (2000), Haddad and Maluccio (2003), Fafchamps (2003) and Fafchamps and Minten (2002).”