Abstract:
This paper investigates the links between social capital and household poverty in Uganda.
We assume a two-way causal relationship between poverty and access to social capital. This
suggests an endogeneity problem, so the paper uses econometric techniques that control for
endogeneity. Using two nationally representative data sets, our analyses revealed that access
to social capital defined in terms of membership of social organisations positively affects
household income and reduces poverty. Education was the key determinant of income and
increases the probability of joining social networks. Our results further show that household
income and welfare are positively associated with access to social capital or group
participation. This suggests that government strategies to increase household income that
take into consideration existing social institutions will go a long way to encourage
associational growth and performance and consequently reduce poverty.
