Performance of local governance: Social capital or Institutional structures?

Abstract

This paper critically evaluates the debate on what makes local governments more effective, higher social capital or stronger institutional structures. This study aims at understanding the relationships and processes through which social capital and institutional structures are affecting the local government performance. Andhra Pradesh Rural Employment Guarantee Scheme (APREGS) has been taken as case example. Results acknowledge the indirect influence of formal institutional structures on local governance. Information provision is observed to be one such effective initiative to channelize social capital for effective local governance. However, formal democratic channels are observed to be ineffective. Rather, it is mediated by complex institutional and social capital issues. Higher social capital does not lead to empowerment or trust in the local government and highlights the significant impact of the economically and politically powerful cultivators and household industries on local governance dynamics. The paper calls for a fresh and wider debate on the decision making dynamics in rural India, especially the interaction between government institutions, social capital, and the historical societal dynamics.