International Social Work 45(4): 481±495

Sage Publications: London, Thousand Oaks, CA and New Delhi

*
i s w
0020-8728[200210]45:4;481±495; 027598

Social capital, economic development and

food security in Peru's mountain region

* HeÂctor Luis DõÂaz, Rene D. Drumm, Johnny

RamõÂrez-Johnson and Helo Oidjarv

The Adventist Development and Relief Agency (ADRA) is a non-

governmental organization that provides community development
and disaster relief services in 120 countries around the world.
ADRA is an agency of the Seventh-day Adventist Church, a
Christian North American-based religious denomination that oper-
ates an international system of hospitals, clinics, schools, universities
and human service programs (<http: //www.adventist.org>).
Consistent with its non-pro®t status, ADRA employs and offers
services to people without regard to age, ethnicity or political or reli-
gious af®liation. ADRA's services, which are provided to approxi-
mately 19 million people per year, include food security, economic
development, primary health, disaster response and basic education
programs (ADRA International, 2000: 3). The agency has a huma-
nitarian and developmental philosophy of service rooted in the belief
system of the Seventh-day Adventist Church. However, the mission
statement of the agency and its annual report seem to support the
claim that its purpose is not to engage in proselytism. The agency's
high degree of administrative and ®nancial independence from the
church also seems to support this claim. In 1999, only 7 percent of

HeÂctor Luis DõÂaz is Assistant Professor of Social Work at the University of Texas
at Arlington, PO Box 195059, Arlington, Texas 76019, USA. [hdiaz@uta.edu].
Rene D. Drumm is Associate Professor of Social Work at Andrews University,
Michigan. Johnny RamõÂrez-Johnson is Professor of Psychology, Religion and
Culture at Loma Linda University, California and Helo Oidjarv is a research
assistant at Andrews University, Michigan.

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482 International Social Work volume 45(4)

the agency's total support and revenue came from the church
(ADRA International, 2000).
Researchers chose to study poor, indigenous residents of Peru's
Sierra region who had received services from ADRA/Peru because
it was realized that this population would provide us with an excel-
lent opportunity to test the propositions of social capital theory with
a different cultural group. This theory had previously been tested
only in the European, Australian and North American continents.
There are other excellent development organizations operating in
Peru with which we could have collaborated. The decision to partner
with ADRA for this study was the result of a long history of
academic collaboration between Andrews University and ADRA
International. Andrews University offers a masters degree in inter-
national development in collaboration with ADRA International.
ADRA/Peru was also considered to be a good collaborator for
this study because the agency has concentrated its socio-economic
development efforts on the country's poorest economic corridors,
as identi®ed by the Peruvian government (Ministry of the Presi-
dency, 1996).
ADRA/Peru operates the Andean Food Security Development
Project with funds from the United States Agency for International
Development. The project, which started in 1996, comprises the
Infant Nutrition and the Agricultural Income Generation programs.
These have targeted areas of extreme poverty in 13 of the country's
political departments. The program's midterm qualitative evalua-
tion reported that these two programs have `performed out-
standingly in the area of community con®dence-building and
mobilization' (ADRA, 1998: Section 2). This research study was
motivated, in part, by the desire of the ADRA/Peru leadership to
quantitatively test this ®nding. This study also responds to their
belief that repairing social relations and mobilizing communities in
a country torn by years of violence and natural disasters are critical
preliminary steps for further socio-economic development.
An added incentive for conducting this study came from the
realization that social work administrators and policy-makers
often need more speci®c information in order to make strategic
decisions. Knowing whether social capital is a predictor, an outcome
or simply a correlate of economic development could facilitate the
decision-making process.

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 DõÂaz et al: Social capital 483

Literature review
The `social capital' concept was used by Glenn Loury during the
1970s to help explain why many inner city African-Americans
seemed unable to rise above their poverty (Lappe and DuBois,
1997: 119). This concept was expanded in the 1980s. As de®ned, it
comprised the social relationships, ties and networks characterizing
human social systems. Social capital was viewed as a requisite for
effective human functioning, high-quality social institutions and
economic development (Midgley and Livermore, 1998: 29).
Putnam et al. (1993) identi®ed a series of indicators of civic
community or social capital, believed to contribute to higher levels
of economic and institutional performance. These included the
extent to which citizens participate in the decision-making affecting
the collective good, equality of political rights and obligations, soli-
darity, trust, tolerance, and the propensity to form civil and political
organizations. A signi®cant ®nding of their research project was that
the power of social capital to predict a high level of institutional
performance is far greater than the power of economic development
to elicit the same outcome. Putnam's historical research strongly
suggested that successful communities became rich because of
their high level of social capital and not the other way round
(Putnam et al., 1993).
Bullen and Onyx's research (1998) demonstrated that the con-
cept of social capital is measurable and that it possesses eight distinct
elements. These elements are: participation in local community, pro-
activity in a social context, feelings of trust and safety, neighborhood
connections, family and friends connections, tolerance of diversity,
value of life and work connections (Onyx and Bullen, 1997; Bullen
and Onyx, 1998).
Adjibolosoo (1993) developed a philosophy that attempted to
explain the relationship between the human factor and economic
development.

The human factor is the spectrum of personality characteristics and other dimen-
sions of human performance that enable social, economic and political institutions
to function and remain functional over time. Such dimensions sustain the work-
ings and application of the rule of law, political harmony, a disciplined labor
force, just legal systems, respect for human dignity and the sanctity of life,
social welfare and so on. As is often the case, no social, economic or political insti-
tutions can function effectively without being upheld by a network of committed
persons who stand ®rmly by them. Such persons must strongly believe in and con-
tinually af®rm the ideals of society. (Adjibolosoo, 1993: 142)

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484 International Social Work volume 45(4)

The economic, political and social development of a nation begins with the human
factor, which serves as the solid foundation on which all other programs are built.
(Adjibolosoo, 1995: 6)

Social capital theory

According to Midgley and Livermore (1998), social capital theory is
concerned with the individual, social dynamics, social relationships
and human networks, and for this reason enables us to better under-
stand people in their environments. The theory proposes that high
social capital will improve the effectiveness of human functioning,
the quality of social institutions and the economic development of
communities (Midgley and Livermore, 1998: 31). Other studies
also suggest that high social capital will promote more effective
cooperation and social problem-solving at the inter-personal and
inter-organizational levels (Waddock, 1993; Uphoff, 1992; Tendler
and Freedheim, 1994).
The World Bank (http://www.worldbank.org) has de®ned social
capital as `the norms and social relations embedded in the social
structures of societies that enable people to coordinate action to
achieve desired goals'.
According to Baker (http://www.humax.net), social capital refers
to the size, quality and diversity of networks in a community or
society. According to him, social capital is as important as human
or ®nancial capital for achieving success.

The Peruvian context

A history of oppression, racial discrimination and inequality, legal
barriers, adverse weather and insuf®cient means of communication
and transportation are factors that have contributed to the high
incidence of poverty in Peru's mountain region.
Socio-economic inequality in Peru dates back to the Inca empire
before the arrival of the Europeans. Forced labor and extremely
high taxes in the Inca empire led to poverty and social strati®cation
(Gispert, 1999). This situation worsened with the arrival of the
Spaniards who imposed a system of institutionalized discrimination
against mestizos, whom they perceived as morally impure (Cadena,
1997). The arrival of African slaves, who were mostly settled in the
mountain region, and the subsequent arrival of Asians contributed
to the complexity and inequality of the Peruvian social strati®cation
system (Gispert, 1999; Tardieu, 1998).
Figueroa (1999: 243) identi®ed other factors contributing to the
region's great poverty. First, before 1923 residents of the mountain

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 DõÂaz et al: Social capital 485

region were not considered legally Peruvian, could not own property
and lacked legal and social protections. Second, peasants who are at
the bottom of the socio-economic ladder mostly populate this area.
Adverse weather such as drastic temperature changes, little rain
and severe erosion makes farming extremely dif®cult, and in this
way contributes to poverty (Gispert, 1999). Besides, from 1979 to
1992 the Peruvian government did not provide needed protection for
the country's agriculture (Ferrary, 1992). According to Espinoza-
Uriarte (1997: 36) and Figueroa (1999), life in the mountain region is
made more dif®cult by inadequate housing, lack of clean drinking
water and insuf®cient means of transportation and communication.

Methodology
This study was conducted utilizing the quantitative and deductive
research method. During July and August 1999 this cross-sectional
survey was administered to 789 persons who reside in 10 experi-
mental and 10 comparison communities in Peru's mountain region.
ADRA operates most of its programs in the Sierra because of the
high incidence of poverty in this area.

Hypotheses
The following hypotheses were formulated, based on the review of
the literature contained in this study and on the propositions of
social capital theory.

1. Communities which received food security and/or other develop-

ment services from ADRA/Peru will show higher levels of social
capital than communities which did not receive these services.
2. High scores on the social capital scale will be associated with indi-
cators of high economic development.
3. High levels of economic development will be observed only in
communities with high levels of social capital.

Operational de®nitions
1. Level of social capital ± degree of participation in local commu-
nity, proactivity in a social context, feelings of trust and safety,
neighborhood connections, family and friends connections, toler-
ance of diversity, value of life and work connections as expressed
by a mean score on the social capital scale ranging from 1 to 4.
A mean score of 1 indicates a very low level of social capital
and a mean score of 4 indicates a very high level of social capital.

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486 International Social Work volume 45(4)

2. Low social capital ± degree of participation in local community,

proactivity in a social context, feelings of trust and safety, neigh-
borhood connections, family and friends connections, tolerance
of diversity, value of life and work connections as expressed by
a mean score of 2.50 or less in the social capital scale.
3. High social capital ± degree of participation in local community,
proactivity in a social context, feelings of trust and safety, neigh-
borhood connections, family and friends connections, tolerance
of diversity, value of life and work connections as expressed by
a mean score of 2.51 or higher in the social capital scale.
4. Economic development ± economic condition of interviewed
families as re¯ected by: their annual gross income in soles; and
their perceptions of changes in property and income over the
last three years.
5. Food security ± ability of families to obtain food when they need
it. Such ability was indicated by the number of times they
reported having needed additional food within the last 12 months
while being unable to get it.

Instrumentation
The social capital scale was developed by Bullen and Onyx (1998) at
the University of Technology at Sydney, Australia. The instrument
was developed and tested over a three-year period and possesses
adequate levels of validity. It was translated into Spanish by this
study's principal investigator and was subsequently validated for
Indian and mestizo Peruvians.
A brief questionnaire developed by the principal investigator was
utilized to collect demographic information and data related to the
subjects' levels of economic development and food security..

Sampling procedures and data collection

Experimental communities were selected at random from a list of
communities where ADRA has provided food security and other
development services for a year or more. Comparison communities
were selected following three criteria. First, they had not received
services from ADRA or had received services for less than a year.
Second, they were located in the same political districts as the experi-
mental communities or in adjacent districts. Third, they were similar
to the experimental communities in terms of the ethnicity and socio-
economic levels of their residents. The size of the surveyed commu-
nities ranged from approximately 25 to 125 families.

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 DõÂaz et al: Social capital 487

One adult per selected family was interviewed. Research subjects

in the experimental and comparison communities were randomly
selected from ADRA's lists of current or former clients and from
the census lists of local communities. In many instances, the small
size of the communities enabled the researchers to interview repre-
sentatives of all available families.
Data were collected by 32 professionals, 23 of whom were pursu-
ing a master's degree in international development. Most interviews
were conducted in Spanish, although some of them were conducted
in Quechua directly by the interviewers or through interpreters.
Each interview lasted approximately 25 minutes. Subjects were
informed about the potential risks and bene®ts associated with
this study and they were asked to sign an informed consent form
which promised them complete con®dentiality.

Findings
In this sample (n ˆ 789), 54 percent of the sample was female and
46 percent was male. The mean age of respondents was 38, the
median was 36 and the mode was 28. The mean annual family
gross income was 1980 soles (US$582) and the mode was 600 soles
(US$176). The sample's mean, median and modal level of education
was ®fth-grade, nevertheless, 108 people reported having only
received one year of education or less. Two percent of the sample
(n ˆ 17) reported having one or more years of university education.
Eighty-two percent of the sample (n ˆ 647) reported having needed
additional food during the last 12 months without being able to
obtain it. The main reasons for not being able to obtain additional
food were: not having enough money (n ˆ 442), problems with the
harvest (n ˆ 99), and not enough food in the stores (n ˆ 42).
Social capital scores ranged from 1.39 to 3.94 on a 4.00 scale. The
mean score was 2.86 and the mode was 3.25.

Hypothesis no. 1
Communities which received food security and/or other development
services from ADRA/Peru will show higher levels of social capital
than communities which did not receive these services.

A t-test was conducted in order to test this hypothesis.

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488 International Social Work volume 45(4)

Table 1 Social capital scores by type of community

Type of No. of subjects Mean social capital score

communities within communities

Experimental 357 2.95

Comparison 430 2.78

t 787† ˆ 4:83, p ˆ 0:00

The t-test showed that communities which received food security

and/or other development services from ADRA possess signi®-
cantly higher levels of social capital than communities which did
not (Table 1). For this reason we must accept our ®rst research
hypothesis.

Hypothesis no. 2
High scores on the social capital scale will be associated with indica-
tors of high economic development.

A t-test comparing the annual gross income of subjects with low

and high levels of social capital showed that subjects with high
social capital earned higher incomes (Table 2).

Table 2 Level of social capital and annual gross family income

Level of social capital n Annual gross family

income (soles)

Low 187 1704

High 571 2070

t 347† ˆ 2:015, p ˆ 0:04

Another t-test was conducted to explore the relationship between

social capital and food security.

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 DõÂaz et al: Social capital 489

Table 3 Social capital and access to food

Subjects by level of n Number of times the family needed

social capital food during the last 12 months but
was unable to get it

Low 188 4.05

High 599 3.27

t 785† ˆ 3:25, p ˆ 0:001

This test showed that families with higher social capital needed
food without being able to obtain it less often than families with
lower levels of social capital (Table 3).
Chi squares and ANOVAS were conducted to further explore the
association between social capital and economic development.
This Chi square showed a higher than expected frequency of sub-
jects with high social capital who reported owning more property
than three years before (Table 4).

Table 4 Level of social capital and increases or decreases in property

Level of social capital Does your family own more, the same Total
or less property than 3 years ago?

Less The More Don't

same know

Low Frequency 73 85 17 4 179

Expected 54.1 83.6 31.3 10 179
frequency
Percentage 40.8 47.5 9.5 2.2 100
High Frequency 160 275 118 39 592
Expected 178.9 276.4 103.7 33 592
frequency
Percentage 27 46.5 19.9 6.6 100
Totals Frequency 233 360 135 43 771
Expected 233 360 135 43 771
frequency
Percentage 30.2 46.7 17.5 5.6 100

2 3† ˆ 21:85, p ˆ 0:00

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490 International Social Work volume 45(4)

Table 5 Level of social capital and increases or decreases in income

Level of social capital Does your family earn more, the same Total
or less income than 3 years ago?

Less The More Don't

same know

Low Frequency 85 77 14 4 180

Expected 79.9 69.9 20.9 9.3 180
frequency
Percentage 47.2 42.8 7.8 2.2 100
High Frequency 259 224 76 36 595
Expected 264.1 231.1 69.1 30.7 595
frequency
Percentage 43.5 37.6 12.8 6.1 100
Totals Frequency 344 301 90 40 775
Expected 344 301 90 40 775
frequency
Percentage 44.4 38.8 11.6 5.2 100

2 3† ˆ 8:25, p ˆ 0:04

This Chi square showed a higher than expected frequency of sub-

jects with high social capital reporting higher incomes than three
years earlier (Table 5).

Table 6 Changes in the amount of property and social capital

Type of change in property n Group social capital

mean score

Less 233 2.77

The same 360 2.87
More 135 2.95
Don't know 43 3.09
Total 771

F(3,767) 7.29; p ˆ 0:00

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 DõÂaz et al: Social capital 491

The ANOVA showed that people who reported owning more

property than three years ago have higher levels of social capital
than those who have lost or have maintained the same amount of
property (Table 6).
These ®ndings show that subjects with high social capital earned
higher incomes, needed additional food less often, and were more
likely to experience gains in property and income during the three
years preceding this survey. For this reason we must accept our
second research hypothesis.

Hypothesis no. 3
High levels of economic development will be observed only in com-
munities with high levels of social capital.

High and low social capital communities were compared in terms

of mean incomes and the number of times subjects needed additional
food during the previous 12 months.
Findings showed that the mean annual family gross income of
communities with high social capital is signi®cantly higher
(M ˆ 2112 soles) than that of communities with low social capital
(M ˆ 1275 soles), t 736† ˆ 3:8, p ˆ 0:00.
Another t-test found that residents of communities with high
social capital needed food less often (M ˆ 3:17) than communities
with low social capital (M ˆ 4:65) during the 12 months preceding
this survey, t 765† ˆ 5:57, p ˆ 0:00.
A Chi square showed a higher than expected frequency of resi-
dents in low social capital communities who increased their
income levels as compared with three years before (Table 7). At
the same time, it was observed that a lower than expected frequency
of residents from high social capital communities were able to
increase their income as compared with three years before.

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492 International Social Work volume 45(4)

Table 7 Changes in income by community level of social capital

Type of change in yearly gross family Communities' levels of social

income compared with three years before capital

Low High

Less Count 195 138

Expected count 181.7 151.3
Percentage 25.8 18.3
The same Count 154 140
Expected count 160.4 133.6
Percentage 20.4 18.5
More Count 55 33
Expected count 48 40
Percentage 7.3 4.4
Don't know Count 8 32
Expected count 21.8 18.2
Percentage 1.1 4.2
Total Count 412 343
Expected count 412 343
Percentage 100 100

2 3† ˆ 24:22, p ˆ 0:00

Finally, a Chi square showed a higher than expected frequency of

residents in high social capital communities who reported owning
more property today than three years ago. It also showed that high
social capital communities have a lower than expected frequency
of residents reporting owning less property than three years ago
(Table 8).
The ®ndings show that the likelihood of higher economic develop-
ment is greater in communities where high social capital is present.
Nevertheless, it also shows that it is possible for low social capital
communities to exhibit higher levels than expected of economic
development. For this reason we must reject our third research
hypothesis.

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 DõÂaz et al: Social capital 493

Table 8 Changes in property by community level of social capital

Type of change in amount of property as Communities' levels of social

compared with three years ago capital

Low High

Less Count 68 158

Expected count 41.8 184.2
Percentage 48.9 25.8
The same Count 52 299
Expected count 65 286
Percentage 37.4 48.9
More Count 18 114
Expected count 24.4 107.6
Percentage 12.9 18.6
Don't know Count 1 41
Expected count 7.8 34.2
Percentage 0.7 6.7
Total Count 139 612
Expected count 139 612
Percentage 100 100

2 3† ˆ 32:59, p ˆ 0:00

Discussion
The present study is signi®cant because it has enabled researchers to
test some of the propositions of social capital theory on a sample of
poor, indigenous residents of Peru's mountain region. People in our
sample were mostly Quechua Indians, living in a rural context of
extreme poverty and socio-economic and political discrimination.
A literature review conducted before this study showed that social
capital theory had only been tested on white Caucasian, western
and urban populations from the European, Australian and North
American continents. The ®ndings of this study contribute towards
establishing the validity of social capital theory in Peruvian, poor,
rural, non-western communities.
A statistically signi®cant tendency was found for economic devel-
opment and food security to be high when social capital is also
high. However, there were a few communities in this study with
higher levels of economic development and food security in spite

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494 International Social Work volume 45(4)

of their low levels of social capital. It seems that unknown variables

intervened between social capital, economic development and food
security.
Finally, in this study fewer high social capital people than low
social capital people reported losing income or property over the
three-year period preceding our survey. In our view, this ®nding
suggests that even though high social capital alone cannot predict
economic success, it can help people cope and survive economically
in the midst of socio-economic and political adversity.

Implications and recommendations

The ®ndings of this study may have important implications for
social welfare and social work practice. The positive association
found between social capital and economic development among
native Americans in Peru suggests that social workers working on
behalf of similar populations should assess, monitor and try to
improve the social capital of targeted populations, as this may pro-
mote their economic development. The fact that we do not know
which factor is the predictor and which is the outcome suggests
the advisability of providing holistic social interventions aimed at
increasing social capital and promoting economic development. In
our view, ADRA's micro-enterprise and income-generating food
programs are examples of such holistic interventions since they
encourage people to work together and help each other out while
improving their ®nancial situation and level of self-suf®ciency.
These are strategies that social workers could replicate in poor
urban and rural settings in various countries, including the United
States.
Social work educators may be encouraged by the ®ndings of this
study to include social capital content in their program curricula,
given that social capital could be an important element of effective
macro-social work interventions.
We recommend conducting studies similar to this in developing
countries and in other poor, non-western communities in order to
further establish the cross-cultural validity of social capital theory.
The three main variables in this study were positively associated.
However, more rigorous research studies are needed in order to
establish cause-and-effect relationships among them.

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 DõÂaz et al: Social capital 495

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