Public work programs and social capital: An exploration of MGNREGA in India

Abstract

The importance of social capital as a public good and its influence on socioeconomic development has gained momentum in recent decades. Evidence suggests that social capital is associated with economic growth, better governance, and higher academic achievement. Several studies underscore the role of community driven development in creation of social capital for the poor in developing countries. However, there is little research evaluating the effect of community based programs on social capital outcomes. This paper evaluates the causal effect of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a public works program in India, on social network and community based organization membership. Using both the waves of India Human Development Survey, we apply difference-in-difference regression models to estimate the treatment effect. We also explore if this impact is mediated by village-level caste heterogeneity. Preliminary analysis shows significant increase in social capital among participating households and stronger impact in homogenous villages.