The role of social capital in resilience against poverty

This thesis captures the effect of social capital measured as social and institutional trust on a reduction of absolute poverty. The indicators of social capital are captured through the construction of a database of subjective well-being measures. Poverty is indicated using the Watt’s index which measures the mean proportionate poverty gap for those living under the extreme poverty line of $1.90 a day This thesis analyses the relationship in 26 Sub-Saharan countries, broadly including the period of 1999 to 2014. The findings show that social trust has a positive and significant effect on a reduction of poverty. The effect of institutions appears to be mixed, whereas the quality of governmental policies, corruption among politicians, and unequal opportunities might offer an explanation for low trust in governmental institutions on a local and national level. The findings imply that social capital increases the resilience against poverty for society’s most vulnerable groups, which provides policymakers with an additional strategy to strive for pro-poor growth and increase society’s well-being