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Empirical Economics

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22.05.2018

Social capital as a coping mechanism for seasonal deprivation: the case of the Monga in Bangladesh

verfasst von: Rejaul K. Bakshi, Debdulal Mallick, Mehmet A. Ulubaşoğlu

Erschienen in: Empirical Economics | Ausgabe 1/2019

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Abstract

The extreme hunger and deprivation that recurs every year in the lean season in northern Bangladesh, locally known as the Monga, is mainly due to the malfunctioning local labor and credit markets. Using data covering 5600 extreme poor households in the Monga-prone region, we investigate in detail the role of social capital in securing employment and obtaining informal loans. Correcting for the endogeneity of social capital by the heteroscedasticity-based method proposed by Klein and Vella (J Econom 154:154–164, 2010) and also by the standard IV method for a robustness check, we document that social capital plays an important role in obtaining both wage- and self-employment. We also document a weak negative effect of social capital on obtaining informal loans. We explain our results in terms of the role of horizontal and vertical components of our measures of social capital in influencing different outcomes.

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Monga is a Bengali dialect word referring to unemployment, food scarcity, hunger and starvation in northern Bangladesh. Khandker (2011) describes the Monga as a period of virtual economic inactivity and seasonal food deprivation, which sometimes rises to the level of famine.

In studying the 1974 famine in Bangladesh, Sen (1981) documented that, at the peak of the Monga, employment dropped to as low as 10% of the previous three-month average. Wage laborers and several service providers (such as boatmen and petty traders) whose livelihood depends on daily wages suffered the most. This resulted in a decline of “entitlement” of food, causing starvation and death. As much as 45% victims of the famine were day laborers, while small farmers (owning less than 0.5 acre of land) constituted a further 39%.

Rangpur is one of the seven administrative divisions in Bangladesh (also a district in the same division).

See Rahman (1995), Hossain (1988), Faridi and Khalily (2008), Rahman et al. (2008), Shahriar and Khalily (2008), Khandker et al. (2010), Berg and Emran (2011), Khandker (2011). Rahman (1995) is the pioneering work on the Monga.

This period is also termed as the Mora Kartik. Mora means “dead” in Bengali, and Kartik is a month in Bengali calendar (mid-October to mid-November). Mora Kartik implies the deadliness of the Kartik month.

There is no clear agreement on the measurement of social capital. The literature commonly uses some proxies that track the individuals’ participation in community events. The following are some examples of the proxies for social capital: Kawachi (1999)—membership in groups, civic trust, and helpfulness of others; Islam et al. (2008)—voter turnout and crime rates; Veenstra (2000)—voting, writing letters to editors, paying attention to the community, and socialization with colleagues at work; Hyyppä and Mäki (2001)—different participating activities; Campbell et al. (2002)—members of the local sporting clubs; Latkin et al. (2003)—church attendance; Gayen and Raeside (2007)—networking and social relationships; Waterkeyn and Cairncross (2005)—club membership; Guiso et al. (2004)—blood donation.

The households were revisited in 2005 and 2008, but these panel data cannot be used to investigate the effect of social capital. The extreme poor were provided, among other assistance, support for building social capital for approximately two years. Therefore, the contribution of social capital cannot be disentangled from the program impact. Baseline data are immune to this problem.

For a detailed discussion on the PWR method and the selection of households, see Matin and Halder (2007).

Since data were collected in one round, consumption and income across seasons cannot be compared.

We do not have disaggregated employment data, such as the number of hours a day and the number of days a month worked. It is important to note that respondents cannot recall such details of past employment. Therefore, we cannot distinguish full-time and part-time employment from the data. Information on location of employment is also not available, so we are unable to determine migration patterns during the Monga. However, the poor in our sample region hardly migrate, considering the associated uncertainty of finding a job in the new destination and the economic consequences of borrowing and spending money to travel to the destination (Bryan et al. 2014).

At the 2002 exchange rate, one US dollar was approximately equal to 60 Taka.

This method has also been employed by Berg et al. (2013).

For example, higher land ownership and education would increase both information flow through social interactions (labor market information from a school friend, for example) and bargaining power [as Sen (1999) notes in Development as Freedom, an educated person is “taken seriously” in social interactions].

We thank an anonymous referee for this suggestion.

Inequality in social capital among households might also arise in the event of an aggregate shock at the village level even households are identical in terms of other resources, such as land and human capital.

We thank an Associate Editor of this journal for this explanation.

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Titel: Social capital as a coping mechanism for seasonal deprivation: the case of the Monga in Bangladesh
verfasst von: Rejaul K. Bakshi
Debdulal Mallick
Mehmet A. Ulubaşoğlu
Publikationsdatum: 22.05.2018
Verlag: Springer Berlin Heidelberg
Erschienen in: Empirical Economics / Ausgabe 1/2019
Print ISSN: 0377-7332
Elektronische ISSN: 1435-8921
DOI: https://doi.org/10.1007/s00181-018-1438-3

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