The Effects of Social Capital on Rural Welfare and Poverty (Case study: villages under Doroudzan irrigation and drainage network)

Social capital in the form of local institutions is expected to reduce poverty and increase welfare. This study aims to investigate the role of social capital on poverty reduction and welfare in villages under Doroudzan irrigation and drainage network in Fars province. Poverty and social capital indices, function of probability of being poor in Tobit form, and function of welfare were used. The required data were collected through interviews and 107 questionnaires were filled up, using a two stage random sampling method. Results indicated that households are member in 2.355 local institutions. Social capital in local institutions form has not played an effective role on reducing poverty and increasing welfare. Therefore, in order to make rural participation as an instrument for a better socio-economic condition, revisions on social capital situation are necessary in rural societies.