An Analysis of 2 Villages in Semi-rural Siem Reap Province, Cambodia

By Hart Feuer
December 2004

The Ch’rieu commune chief, and Krosang and Veal village heads

Advisor: David C. Stifel, Economics & Business
Readers: Dan F. Bauer, Gladstone A. Hutchinson, and Jerome F. Heavey
Acknowledgements: This study was funded by the Luce Foundation and Center for Khmer
Studies (CKS) through the Summer Junior Fellowship Program. The following report would nothave been possible without the help of my undergraduate honors thesis advisor, David Stifel,
my faithful interpreter, Sary Seng, and the supportive staff at the Center for Khmer Studies. My
gratitude goes out to Fabienne Luco, Michael Vickery, Leakthina Ollier, Philippe Peycamp,
Phong Tan, and the librarians of Wat Damnak. Special thanks to Sodany Tan for helping withthe translation and Larong at the Big Lyna Villa for helping me to understand some of the social
relationships in Cambodia.

ABSTRACTThe amount of research concerning the role of social capital in economic development has
grown immensely in the previous decade, but measurement and usefulness of the concept still
remain very pervasive and inaccessible to policy makers. This work departs from others on the
topic of social capital because it differentiates between the collective capacity of shared social
networks spurred on by norms and values and those social relations propagated by interactionsin the market. Using household data collected in two villages in semi-rural Cambodia, this paper
shows that market interactions are an embedded aspect of everyday social relations in thevillage and enhance the ability of social capital to meaningfully contribute to income. Social
market interactions directly contribute to livelihood through improvements and dedication topersonal business and contribute indirectly through an enhancement of social capital that
capitalizes on group efficiency. Specifically, group efficiency is maintained in the short-termby the survival of the limited-group morality currently existing in the villages. Policies andparticipatory programs intending to improve the basic social behavior contributing to rural
productivity should develop a local environment that draws upon established social structuresand encourages mechanisms for enhancing communications with marketplaces and othercommunities.

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Table of Contents
Part I – Introduction..............................................................................................
Part II – Literature Review....................................................................................
Social Capital.................................................................................................
Market Interaction..........................................................................................
Cambodia.......................................................................................................
Part III – The Study..............................................................................................
Village Demographics – Veal and Krosang..................................................
Interviewing Method.....................................................................................
Part IV – A General Model of Social Capital and Market Interaction.................
Part V – An Economic Model of Social Capital and Market Interaction.............
The Partitioning of Social Capital and Social Market Capital......................
Part VI – Empirical Valuation of the Model Mechanism.....................................
Wealth Determination....................................................................................
Defining the Exogenous Components...........................................................
Family Endowment...................................................................................
Communication.........................................................................................
Defining Social Capital Components............................................................
Social Interaction.......................................................................................
Groups and Networks................................................................................
Violence and Crime...................................................................................
Identity.......................................................................................................
Trust...........................................................................................................
Collective Action........................................................................................
Defining Market Interaction...........................................................................
Market Associations and Networks............................................................
Market Depth..............................................................................................
Social Capital, Market Interaction, and Wealth.....................................................
Social Capital Meets Market Interaction................................................................
Part VII – Conclusion..............................................................................................

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References................................................................................................................
Appendices................................................................................................................

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PART I – INTRODUCTION
With the increasing liberalization of Cambodian markets since the end of theVietnamese occupation in 1989 and the increasing monetarization of previously informal
dealings, new employment opportunities and new methods of making business have renderedsome reciprocal village practices obsolete and encouraged villagers to develop new ones.1 As
foreign aid continues to flow into villages, the local economic demographic and behavioral
patterns are often altered even further. Within the social sciences, the concept of social capitalhas been increasingly espoused as a way to empirically capture some of the social
characteristics of a community that influence mutual behavior and collective action. In an
attempt to capitalize on a more tangible aspect of an otherwise still abstract and inadequately
understood concept, researchers have recently begun discussing the relationship between social
capital and peoples’ business practices and entrepreneurial success. Although many donors are
now willing to supply aid to social activities with the expectation of indirectly enhancing
economic development, practitioners have struggled to assemble coherent policy suggestions.
Avenues for enacting policy relating to business relationships are clearer and more numerous.
The primary aim of this study is to determine how business contributes to social capital, and in
turn, how social capital contributes to the success of business and the capacity for income
generation among households in semi-rural Siem Reap.2 I expect higher levels of market
interaction to directly contribute to income generation through more dedication to business andto contribute indirectly through an enhancement of social capital that capitalizes on group
efficiency.
Currently, very little literature has surfaced that empirically explores this relationship on
the household level, although some have conceptually framed a model to do so (see Platteau
1994a, 1994b). Research has focused on aggregate levels and trading relationships, and othermodels indirectly cover the topic. In the context of rural Cambodia, literature that contributes orcomplements this discussion is scant. Based on a review of the available economics,
anthropological, and sociological literature that exists on social capital, market interaction,
income measurement, village life, reciprocity, and conflict resolution in Cambodia, I tailored aquestionnaire and data gathering technique suitable to the conditions in the region. In thisreport, I present the results from interviews and fieldwork conducted in Krosang village andVeal village during the summer of 2004.

PART II – LITERATURE REVIEWSocial CapitalSocial capital is implicitly understood to describe the tendency of community-widesocial characteristics, such as trust, norms, and values, to influence individuals. By name, it
1During the Khmer Rouge period (1975-1979), money was banned. After 1979, rice was theprimary currency in Cambodia. During the first five years of the Heng Samrin period (19801989), gold (measured in Chi) became the common currency. The Cambodian Riel, American
dollar, and Thai Baht have only in the past two decades become universally used.
2
An area is semi-rural if it generally exhibits rural characteristics but is located within theimmediate vicinity of or is heavily influenced by a neighboring urban center.
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seems to tie together economics and more qualitative-oriented fields. The term itself debuted in
the 1980’s with the seminal works of Coleman (1988), Granovetter (1985), and Putnam,
Leonardi, and Nanetti (1993).3 Although much of the early literature came from social sciences
other than economics, such as sociology and anthropology, the debate over social capital within
economics began soon thereafter. The founding authors were primarily building upon existing
literature on the topics of social networks, informal contract enforcement, trust, norms, ethnic
heterogeneity, reciprocal exchange, and institutions. Social capital emerged as an attempt tosynthesize these theories into a coherent framework that could help to explain issues ofgovernance, income-generation ability, and community capacity. For a period stretching fromthe end of the 80’s to the mid 90’s, most of the literature (beginning with Putnam 1993) foundsocial capital to be a predictor of economic success. Economics research followed not longafter, covering issues relating to associational behavior and household income (Narayan andPritchett 1997), information transfer (Barr 1998), and business connections (Fafchamps 1998).
More contemporary work is often more critical of the supposed positive effects of social capital.
Based on a study of 49 communities in the Peruvian highlands, Wiig (2003) finds thattraditional cooperation techniques, which are major contributors to social capital as weunderstand it, have no significant effect on the average income level of the community. The
debate over the effects of social capital is clearly still underway.
Since the original characterizations provided by Coleman (1988) and Putnam (1993), thedefinition of social capital has undergone many changes. Putnam and Coleman generally definesocial capital as a positive group externality dependent upon associational behavior. Fukuyama(1995; 1997) highlights the role of trust in development and asserts that only certain behaviors
and shared norms, such as compassion, altruism, and tolerance should be regarded as social
capital. Knack and Keefer (1997) put it in terms of trust and civic cooperation. Putnam (2000)
later shifted his definition to assert that interdependence arises from behaviors of reciprocity andtrust. Discussion of the definition then began focusing on the relationship between the actors
and not the actors themselves. Ostrom (2000) stresses the importance of shared knowledge andrecurrent activity. Lin (2001) defines it as the resources embedded in the social networks thatare accessed by the actors. As yet, no definition has been agreed upon and the term continues tobe shaped by the discipline and by the situation to which it is applied. In general, controversy
focuses around the role of trust, the negative effects of social capital, policy implications, andon the superfluous discussion about whether social capital is truly capital (e.g. Adler 1999;
Grootaert 2001).4
Although there are advantages in terms of inter-disciplinary adaptability of having a
fluid definition to social capital, this has complicated the establishment of a concrete or semiconcrete theoretical framework. The discussion still persists about whether to view social
capital from the bottom-up (starting with individuals) or the top-down perspective (institutions
and government as enablers of social capital) (Ostrom 1994; Woolcock 1998). Whether one
defines it in terms of networks (vertical and/or horizontal), norms, trust, associability, or any
combination thereof, has significant implications for the assembly of an appropriate model.
More general models have placed social capital within a “motivation-opportunity-ability”
3

Woolcock (1998) asserts, however, that Lyda Judson Hanifan (1920) and Jane Jacobs (1961)
were the first proponents of the modern concept of social capital.
4
Comparing the definition of social capital, which is still being debated, with the highly diverse
definition of “capital” has spawned a great deal of (relatively) unhelpful debate.
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scheme (specifically, see Adler 1999). In this model, the three conditions that make up the namemust be met in order to make social capital effective. Adler (1999) analogously placed social
capital (motivation) in reference to human capital (ability) and working capital (opportunity).
In general, this is the view shared by most practitioners. Social capital is also commonly seen
as a passive influence that lies dormant and must be leveraged (by leaders, for example) in orderto have its effect. This clouding of the assumed incentive structure of social capital further
complicates the drawing of a relationship between social capital and other development
indicators.
Without a concrete definition or solid framework in place for social capital, it is naturalthat choosing a method of measurement has been equally elusive. In general, a quantitative
method has been used by economists while a qualitative method has been preferred among othersocial capital stakeholders (there are exceptions, such as Narayan and Cassidy 2001). At first,
the clear choices for quantitative data sets were long-standing surveys such as the World Values
Survey (WVS) and the United States General Social Survey (GSS). Although these surveys
were built to gather the relevant data, they were clearly not designed for the rigor of
econometrics, and their strength lies primarily in the large sample size. Knack and Keefer(1997) acknowledge the major disadvantages of the WVS, such as translation difficulties,
sampling error, and response bias, but nevertheless continue to use it. Putnam (1995) similarly
makes use of the WVS and the GSS in his controversial claim that social capital is waning in
the United States. Other researchers have simulated trust and social capital using gamesituations (Glaeser et al. 2000).
More contemporary work tends to employ independent surveys. The most prominent
have been formulated under the auspices of the World Bank, including those from the Social
Capital Initiative (SCI) (Grootaert and van Bastelaer 2002), the Social Development
Department (Social Capital Assessment Tool (SOCAT), Grootaert, Chase, and van Bastelaer
2003), and the International Bank for Reconstruction and Development (IBRD) (Grootaert,
Narayan, Jones, and Woolcock 2004). The measurement techniques produced by the SCI(which include qualitative and quantitative methods) have been field tested in many countries,
and have provoked valuable discussion about the appropriate methods for data gathering. In themeantime, some practitioners have been experimenting with unorthodox data gathering
techniques and have been testing the limits of the concept.5 Some measurements continue tomake use of pre-existing survey data, but rearrange and combine the results to extract the social
capital components (e.g. the Social Capital Matrix of Surveys of National Statistics Britain,
Ruston 2002). In general, the trends emerging from the rash of measurement tools indicate thatthe following aspects or dimensions should be considered:
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−
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Groups and networks
Social interaction
Violence and crime
Identity
Communications capability
Trust

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I refer specifically to the work of Bullen and Onyx (1998), in which more symbolic questions
such as “If you were to die tomorrow, would you be satisfied with what your life has meant?” tocapture social capital.
4Other studies on social capital have divided social capital more broadly and recognize itthrough a cognitive and a structural perspective (Krishnamurthy 1999). The cognitive aspects
include self-help, cooperation, reciprocity, interdependence, coordination, charity, tolerance,
and trust. The structural perspective looks at the concrete elements of social capital, such as
events, networks, and associations (Sedara 2001, p. 26).
The particular mode of data gathering is purposefully not specified in the most current
literature (see especially Grootaert et al. 2004), reflecting a strong inclination toward regionand situation-specific adaptation. Early measurement schemes were standardized and assumed ahigh level of universal behavior. The unexpectedly strong contribution of individual culture tosocial capital is only now beginning to be considered in any appreciable manner. The
Barometer of Social Capital (BARCAS), for example, was designed exclusively for, andimplemented in, Columbia (Sudarsky 1999).
Along with the shift towards more adaptable measurement, the social capital movementin economics has increasingly become critical of itself, citing the theoretical and empirical flaws
that have plagued many studies and begun to propose solutions to them. Specifically, authors
are systematically discrediting the assumed positive effects of social networks. Durlauf andFafchamps (2004) uncover the undesirable elements, such as exclusionary behavior andinequality, produced by some networks and highlight the other negative responses that increasedsocial capital can elicit. Annen (2000) finds that the relationship between the size of the
network and the benefits accrued continually declines and often becomes negative. Uzzi (1997)
finds intra-network feuding and unsustainable hierarchies to be major vulnerabilities to
networks. Some fundamental flaws that threaten to undermine most statistical analyses thus far
have also been exposed. Specifically, Durlauf and Fafchamps (2004) note the absence of any
controls for leadership and institutions. They also question the choices made by many
economists in their choices of instrumental variables. Collier (1998) remarks that the effects ofsocial capital must be persistent for it to be considered truly capital and truly beneficial. The
discipline seems to be caught between a desire to backpedal and mend the conceptual
foundations of social capital and the desire to forge ahead with measurement and research andput social capital to operational use.
Despite the burgeoning literature and enthusiastic support by national governments andinternational development organizations, the continuing ambiguity surrounding the definition,measurement technique, and role of social capital has highlighted the rough transition indevelopment economics to a more anthropological approach. The initial excitement that led
many to make large claims about social capital has more or less subsided. More contemporary
literature (Dasgupta 2002; Glaeser et al. 2000; Grootaert 2001; Fafchamps 2002; Manski 2002)
focuses on far more specific topics and recognizes the limitations of the concept. The infancy
and malleability of the concept have, however, been fruitful, in that many disciplines have beenable to adapt it to their particular style of research, while maintaining an overall sense of interdisciplinary accord. In the future, this may enable sometimes disparate fields to integrate theirwork more successfully and learn from each others’ experiences.
Market Interaction“The most honest relationship you can have in [Cambodia] is a business relationship.”5

– Leakthina Ollier, PhD, Senior Fellow at the Center for Khmer Studies6
Market interaction, in this study, is defined as the degree to which one’s business has
permeated into one’s life. It is part and parcel with social capital because the aspects of one’s
life that are influenced by business often (if not always) exist within the domain of social
capital. For example, friends who one met on the job, neighbors with whom one made aninvestment, regular traders with whom enduring and profitable business relationships arise, etc.
At the same time, market interaction is also independently a predictor for success in business.
The discussion about the relationship between trust and social capital parallels the discussion
between market interaction and social capital. Some authors equate trust with social capital(Fukuyama, 1995, 1997); some see trust as a source of social capital (Putnam, 1993); some see
it as a form of social capital (Coleman, 1988). Market interaction relates similarly with social
capital—it remains at the same time a part of social capital, a contributor to it, and/or a proxyfor it. Research looking at the German and Japanese experience points out the large benefits ofstrong and trusting inter- and intra-firm relationships (Moore and Miller 1994). In the context ofdeveloping countries, where transactions that were once rooted in tradition and social
reciprocity are now becoming monetarized and calculated, it is likely that the market interaction
element of social capital is gaining more influence.
Most of the discussion about market interaction in the context of social capital surrounds
the topics of reciprocity, cultural norms and work ethic, labor-sharing, informal contracts, andtrader relationships. Krishna (2001) finds that association leaders and patron-client relations are
the most important attributes of market success. Fafchamps and Minten (2002) and Fafchamps(2003) look at traders in Benin, Madagascar, and Malawi, concluding that the number ofbusiness associates is positively correlated with sales, value added, and the level of trust in theirrelationships. Certain informal methods of contract enforcement have been shown to be apossible, viable, and Pareto-improving option for poor peoples, although enforcement is lesseffective with increasing size of the network of stakeholders (Annen 2000; Fafchamps 1992;
Fafchamps and Minten 2001). A promising theory describing why some contracts arise andothers do not was developed by Dubois (2001). He contends that, in some situations, such as
rice cultivation, the potential outcomes of the investment (harvests, in this case) are foreseeable(the “states of nature” can be verified), while in others, such as in the provision of healthinsurance, the potential outcomes (future health problems) are discouragingly infinite.
Similar lines of research propose to use social capital to mitigate externalities and model
the investment behavior of poor people (Hogset 2002). Discussion has also centered aroundhow much trust is needed to have successful markets and how much trust is necessary tomaintain sustainable inter-firm relationships (Humphrey and Schmitz 1998). While thesestudies are well-researched and persuasively argued, they paint only a small picture of theoverall relationship between market interaction and social capital.
The most comprehensive work on social behavior and markets, pioneered by Platteau(1994a, 1994b), argues that markets are culturally framed and internal to a community (orsociety). In his view, market interactions permeate deeply into personal life and sometimes open
up avenues for entrepreneurial and social success. In the scope of development in small-scale,usually rural, societies, Platteau (1994a, b; 2002) acknowledges that due to the small network
size and the near-perfect information transfer system, a bilateral reputation mechanism (among6

See Ollier 2004a6kin) and a multilateral reputation mechanism (among good friends) is sufficient to regulate anddrive markets (also see Ostrom 1990 and Granovetter 1985). However, Platteau (1994a) argues
that small-scale systems of information and market transfer must eventually make way for a“generalized morality” that guides transactions of a more anonymous nature once the size of thecommunity or market becomes too complex or large. Granovetter (1985) argues along similarlines, however contending that markets are embedded so deeply in the social fabric of acommunity that limited-group morality, or tight-knit networks that are limited in size, is all thatis necessary to regulate and enhance the market sphere.
A critique of Platteau (1994a, b) which very closely parallels the topic of this study,
argues that social relations underlying market interaction contribute to economic success andplay a role in the assembly of a an informal morality that helps to guide economic activities in
the community (Moore 1994). Wiig (2003) substantiated a portion of this claim in his work
entitled “The Productivity of Social Capital,” which persuasively shows that deeper integrationof the market into the rural Peruvian society and social networks gave rise to more innovative
cooperation techniques and resulted in positive income effects.
The literature on this topic thus far has three major gaps: (1) it has yet to move into thehousehold level, (2) it has yet to integrate itself with social capital, which is arguably where it
fits in the best, and (3) there has been very little discussion about how to measure this effect andmake it applicable to the majority of needy candidates: farmers.
Cambodia
Literature covering rural economic issues and social development in Cambodia islacking, reflecting the funding biases toward post-conflict studies and urban development
projects. Because much of the available research demonstrates these biases in some way, it isnecessary to remark on the topic. I will then proceed to discuss the existing material on rural
Cambodian life, reciprocity, Cambodian Buddhism, and conflict resolution.
Writings on Cambodian development invariably begin with an anecdote about thelingering influences of the Khmer Rouge era, either by highlighting the direct effects of the war,by relating it to the United Nations Transitional Authority in Cambodia (UNTAC) period, or byrelating it to the 1997 coup and the continual state of insecurity in Cambodia. Instead ofcontextualizing contemporary writing in Cambodian history in a beneficial manner, conflict has
instead become a framework or lens by which everything else is interpreted. The international
community has remained focused on the war while the Cambodians themselves have, in many
ways, moved on. This has manifested itself in three primary ways: (1) the strong call for nowbelated Khmer Rouge tribunals, (2) personifications of Cambodia as continually suffering from“postholocaust syndrome,” and (3) countless development projects that have struck out tocapture the imagined effects of Cambodia’s conflicted history (Doyle 1998).
Many prominent writers on Cambodia lament that the injustices of the Khmer Rouge
have not yet been formally addressed. The Nuremberg Trials in Germany and the Peace andReconciliation process in South Africa are often put forth as both a solution and a model for
Cambodia. According to this view, the specter of the genocide will continue to bedevil thepolitical and electoral process unless it is dealt with in a “formal” way (Ashley 1998; Doyle
1998). After UNTAC organized the democratic elections in 1993, a strong belief permeated theinternational donor community that democratization was squarely underway and that economic
prosperity would now lead to political harmony (Brown and Timberman 1998). I argue that7

these two views have shifted the focus away from the present development hurdles in
Cambodia, preferring instead to look in the past and towards the future. In my view, theprimary hurdles are: the widespread tolerance for government injustice and corruption, illegal
logging and other looming environmental hazards, the lack of free press and information
dissemination (one exception is the Somne Thmei newspaper, which debuted in May 2004), andCambodia’s dependence on and misappropriation of foreign aid (e.g. Tith 1998; Talbott 1998;
Hay 1998).
With few exceptions, all authors and development institutions who make mention offoreign aid acknowledge that most funding is directed to urban areas, while the gross majority
of Cambodians live in rural areas (e.g. World Bank 1994). The need and demand for researchin the rural area is very high and growing. Fortunately, performing economics research onsocial capital in the village setting is relatively manageable, due in part to the relative
homogeneity of social structures and behavioral patterns (Ebihara 1968). Rural life in
Cambodia is also at a critical juncture, where market forces are beginning to change the face of
personal and community interactions (Krishnamurthy 1999; Colletta and Cullen 2000, p. 29;
Ledgerwood 1998; Sedara 2001; Oveson 1996). This study is primarily concerned with thecurrent position and evolution of the community social structure, reciprocity and mutual
behavior patterns, and market forces in Cambodia.
Measurement of social capital in Cambodia has been limited to the findings of the Social
Capital Initiative and the Social Services of Cambodia. The survey developed by
Krishnamurthy (1999) to measure social capital in Cambodian villages is highly qualitative innature, although it is easily adaptable to a quantitative research. Similar to the focus of manysocial capital measurement tools, the survey focuses on community events, associations, andinformal networks. It is, however, expanded to capture to the unique Cambodian experienceand includes analysis of village leadership and links with external agencies (NGOs, businesses,
or otherwise).7 Sedara (2001) warns, however, of the deceptive invisibility of Cambodianreciprocal patterns, noting that there is an absence of institutions that form the Western notionof “civil society” (Sedara, p. 9, 12).
In her research, Krishnamurthy repeatedly came across the influences of new market
forces and the monetarization of previously informal dealings. She remarks that suchinfluences, among other things, were causing a decline in mutual help and makes a strong callfor further research on this topic. Such references to declining social capital have permeateddeeply, and often mistakenly, into the literature about the Cambodian peasant experience.
Viviane Frings (1994), for example, comments how deeply and negatively opportunistic
Cambodians have become.8 In his study When Every Household Is an Island, Jan Oveson(1996) also clearly states that the liberalization of the economy is to blame for deterioratingsocial solidarity.9

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Krishnamurthy (1999) also includes a guide to determining the relative incomes of villagers
using an asset-based approach. A variant on this method will be used in this study. Credit isalso due to Ebihara (1968), pp. 195-196, who first established this rubric. The method for
empirically establishing the income rankings has recently been refined by Sahn and Stifel(2003) and Rao (2003).
8
John Vijghen cited in Viviane Frings (2004), pp. 50-66.
9
See Oveson (1996), pp. 66-67. Also see Curtis (1998), p. 125.
8Villagers themselves respond neutrally to the topic, explaining that monetarization has
made transactions stricter, although has not particularly hindered them (Krishnamurthy 1999).
In any case, many of the informal networks have remained unaffected. Family, friends, andoftentimes neighbors do not charge interest; frequent trading partners often reduce transaction
costs by operating without any written documentation; and communities sustain informal
policing mechanisms in the face of inadequate authorities (Krishnamurthy 1999; Colletta andCullen 2000, p. 75). Displeasure over the claims about the declining solidarity in the villages
has fueled “survival” theories that interpret this perceived decline as owing to limited resources
and not to a lack of concern for neighbors (e.g. Ebihara and Ledgerwood in Ledgerwood 1998).
Although mutual help may be declining in some cases in the village community, thevalue of the new business networks forged in the process may be replacing the traditional roleof informal reciprocal behavior (Colletta and Cullen 2000, pp. 29, 31). There is some indicationthat loans between non-kinsmen are more common now than before the Khmer Rouge era(Ebihara 1968, p. 175). Although there has been some informal discussion about the effects ofmarket liberalization, it is yet unknown whether it will have a positive effect on economic
development or merely diminish the solidarity of pre-existing village networks. Confusion overthis finding has given rise to the concepts of generalized versus personal trust and generalized
versus balanced reciprocity. Generalized trust describes the amount of trust “floating around”
that requires no familiarity with a person to access; generalized reciprocity exists whencompensation for work is only loosely defined. Personalized trust is trust that exists between
people who know one another and balanced reciprocity describes strictly quid pro quotransactions (Portes 1998; Putnam 1995; Uzzi 1997; Sedara 2001, p. 52; Sahlins 1972, p. 220).
Acknowledging the operational effects of these concepts has important implications formeasuring and interpreting the effect of social capital.
The effect of Buddhism, which can be felt in strongly in almost all Cambodian villages,
plays a role in enhancing generalized trust and generalized reciprocity. Many of the effects of
the Wat (Pagoda) are tangible, such as community-wide funeral assistance, investment ineducation, large cultural ceremonies, and Wat-sponsored cooperative work projects (Zadek
1993). But many influences are hidden and depend on the strength of the individual’s beliefs,
his or her free time, and level of education. Buddhism accepts modern market conditions andacknowledges that this involves processes of negotiation, trading, acquisition of capital, and soforth. At the same time, Buddhism challenges the individual (and society as a whole) tomaintain Buddhist values when performing these actions. All manner of reciprocal exchange
activities in the village or in the family can be viewed as “making merit” for one’s present andfuture life and are therefore directly encouraged by the Wat (Sedara 2001, p. 84). It seems
imperative to view Buddhism as both a formal institution that the community is shaped by andan informal institution that indirectly causes community members to regulate their mutual
behaviors (North 1990, p. 4).

PART III – THE STUDY
Village Demographics – Veal and Krosang
Krosang village is located 4 kilometers southeast of the town of Siem Reap and shares aborder with Veal village, which is located 2 kilometers further. Krosang is home to 162
households, while Veal is contains around 260 households. The primary ethnicity is Khmer and9there are only a handful of (reported) Chinese residents. In both villages, approximately 50% of
the houses are accessible by 4-wheelers on average quality dirt roads, while the remainder of thehouseholds are accessible by motorbike or bicycle. The villages are primarily agricultural,
although some residents are afforded jobs in the town of Siem Reap. These jobs include
construction work, jobs in the market of Psar Leu, taxi service, restaurant work, and othertourism-related industries. There are no or very few trades, such as wicker, palm, or souvenirs,in either village.
Based on schooling data, literacy among household heads is estimated to be 20%. Of
the population of 7,459 in Ch’rieu commune, where Krosang and Veal are located, 3% arereported disabled (primarily land mine injuries), 5% are over the age of 80, and an additional
5% are divorced or widowed women. Since 1998, the population has been increasing as a resultof migration from Phnom Penh city, Kompong Cham, and Kompong Thom provinces. The saleof land to these newcomers has been at the center ofmuch debate in the commune, although the generalconsensus is that the effects thereof have been
neutral or positive (Bo 2004).
Basic services in the villages are notparticularly extensive, but nor are they poor. Most
households in both of these villages use candles andbattery-powered bulbs for light and use firewood
for cooking. Almost all families have access to asealed well (most of them built by NGOs) andrarely contract water-borne illnesses. Most families
own at least half a hectare of land and therefore
Ch’rieu Commune Health Center
sanitation is not currently a problem. An extensive
and well-maintained irrigation system left over from the Pol Pot era exists on the main roads inboth villages. For families who own a cellular phone (19%), radio (56%), or television (75%),
reception and service is very good.
The primary organizations that haveoperated or are currently operating in both of thesevillages are Agrisuit, Save the Children Norway(Redd Barna), the Association of Cambodian Local
Economic Development Agencies (ACLEDA), andthe UN Food and Agricultural Association (FAO).
Primary associations existing in the villages
include the Wat association, krom samaki(cooperative farming), neighborhood committees,
provas dei (work sharing), health groups, and kromchan chnang (pots and plates association). The
rice bank set up by an NGO in 1993 collapsed in Veal Market Area
2002 as a result of the death of the manager andgrowing incidence of default. Five traditional music groups exist in the commune, all of which
are now working for the Cambodian Cultural Village theme park or large hotels in Siem Reap
town. In both villages, almost all residents are Buddhist and those who actively involve
themselves with the pagoda all go to Wat Prin, which is located in Krosang village. The main
primary school (Ecole Primaire) and health center (Shreav Health Centre) are located in Veal
10

village. A community-wide effort to build a kindergarten in Veal village is scheduled forcompletion by the end of 2004.
Perhaps do to its larger size compared to Krosang, Veal has a central market area, wherea few restaurants and produce sellers assemble daily. Both Veal and Krosang have designatedmeeting halls and have a performance area for special events, apart from the Wat.
Interviewing Method
An extensive household questionnaire and demographic-oriented village headquestionnaire were assembled especially for gathering data in this location. The content of thequestionnaires is based on similar documents produced by the World Bank, National Statistics
Britain, the Cambodian Social Services, and other independent practitioners. Based oninterviews with local experts (especially Luco 2004), the surveys were then tailored to fit withthe unique social and demographic situation in the semi-rural Siem Reap region, and thentranslated to facilitate the interview process.10
Respondents are the primary breadwinners and often their spouses in a random sampleof households from Veal and Krosang. Interviews were conducted in Khmer by an interpreter at
the interviewees’ dwellings in order to keep the process comfortable and consistent. Typically,at least a few of the family members would observe the interview and often add their own
comments (or corrections!). Generally, this was interpreted as a positive effect, since it would
diminish the likelihood of the respondent to deliberately give false answers. Sometimes this wasa negative effect, because respondents may not have felt comfortable publicly revealing theiropinions on certain issues. The commune chief cautioned sternly against taking as truth thevillagers’ assessments of the community. Based on experience, he claims that villagers tend toproject small or personal issues onto the village as a whole (Bo 2004).

PART IV – A GENERAL MODEL OF SOCIAL CAPITAL AND MARKET
INTERACTION
The suggestions made by Frings (1994) and Ovesen (1996) that rural Cambodian
families are “atomized” and do not interact frequently or meaningfully with the village as awhole is not entirely true. Most respondents (67%) have at least one good friend outside thefamily, although they report spending a median of only two hours each week socializing.
However, with the exception of mealtimes, when members of the nuclear family eat bythemselves, the villagers are frequently and casually socializing throughout the day. It is very
common for close neighbors and their children to visit frequently and without appointment. It isevident that villagers underreport their social behavior. A resident of Veal village with many
visitors, explained the phenomenon in this way:
“I think Khmer people like to talk a lot. Unless someone has stolen from you, he is usually
allowed to visit your house [...] There are some people who make good jokes, or maybe their

10

I would like to credit Mr. SENG Sary, Ms. TAN Sodany, and Professor Michael Vickery for
their generous help in translating this document. I give special thanks to SENG Sary for serving
as my tireless interpreter.
11houses have good Feng Shui.11 People like this often get many visitors. I am proud to say I
have such a house.” – Mit Suy, age 41
Children freely roam the village and are often watched and, with the exception of feeding, aretaken care of collectively. In this province, it is customary for children to return home fromschool during lunchtime to eat. Throughout the day, children assemble at various locations in
the villages to play and socialize. Sometimes these groups can become as large as thirty to forty
children. A villager whose house is located at a crossroads where children often meet, neutrally
described his opinion about this:“The children always meet here. I can’t change that. And because my children are often withthem, they come rest under the shade at my house. But they never ask for food. Everyone in
the village has time, but no one has money to feed other peoples’ children.” – Son Wuon, age 45
Despite the regular social interactions of the adults in the villages, there is reason tobelieve these relations are only superficial. Few household heads report having good friends
within the village and only consider childhood or wartime friends to be good friends. The
majority of respondents (78%) agreed with the statement “people here look out mainly for thewelfare of their own families and are not much concerned for the community” and almost no
one believed a neighbor who found lost money would return it to the owner. However, theweak perceptions of the villagers about the depth of their relationships belie the cohesive
associational behavior surrounding the Wat and other formal associations. While villagers
generally lack formal associations, such as clubs, social groups, health groups, and culturalgroups, they are all, with little exception, active members of the Wat, an institution which
integrates many of the individual purposes of these associations into one encompassing andauthoritative association. One of the local policemen in Krosang village with many friends,
described villagers’ social behaviors very clearly.
“I think some people don’t want to have good friends because they will ask for money or food.
If they understand that one can also ask one’s friends for food, they would take more friends.
For people with not so many friends, they can always find help at the Wat.” – Hal Huon, age 36
Oftentimes, villagers would have difficulty discriminating between a specificassociation, such as the Association of Pots and Plates, and the Wat. The specific roles of someassociations are so integrated into the workings of the Wat that the two are indiscernible.
Within the Theravada Buddhism practiced in Cambodia, the Wats are encouraged to formally or
informally provide social services, such as education, counseling, and medical help. Although
Wat Prin, the local temple, now provides only spiritual guidance, villagers generally agree thatit can serve as a safety net if truly necessary. The Wat is also underappreciated as a place forsocialization and community organizing. The secondary purpose of the ceremonies at the Wat
is to provide a backdrop for solidarity building.
“In this commune, only a few people go to the Wat for small holidays [about 50 each year], buteveryone goes to the big holidays [about 10 each year]. I always use this time to make big
11

A method for arranging one’s house that maximizes the occupants’ spiritual health.
12announcements, ask peoples’ opinions, and get help fixing problems. Years ago, I organized an
education group at the Wat and now we are close to finishing the Veal kindergarten. But
mostly, people come to the Wat without any goals or any planning. People will talk a lot andsometimes enough people will complain about something, that they will come together and fix
the problem. I am very proud of my people when they do this but I wish they would do it
more.” - Vuon Sim, Ch’rieu commune chief, age 52
Beyond the Wat, there are other formal associations. A few families have organized
themselves into health groups that share the costs of emergency treatment. Some are membersof local festival or burial societies. Other sporadic neighborhood committees were establishedto deal with land disputes, road maintenance, and local politics. And a mere handful
participates in local NGO-sponsored information campaigns. Due to the market for traditionalmusicians in Siem Reap, five separate music groups have evolved. Members of these formalorganizations claim to be very positively effected by these groups.
“Last year, [my] daughter was bitten by a snake while working in the rice fields. We took her tothe hospital, but they did not have the treatment. So we had to hurry into Siem Reap to theprovincial hospital. I spent 120,000 riel ($30) on the treatment and my daughter barely
survived. My husband was very mad at her for being bitten and even scolded her while she wasvery sick [...] The next morning, three of the families in our health group came and each gave us
30,000 riel and some strengthening herbs for my daughter. We were happily surprised. Since
that day, we have brought two more families into the group.” – Choun Noun, age 39
As with formal social associations, membership in market organizations (cooperatives,trader associations, rice banks, credit groups, etc.) is not a virtue of Khmer village lifestyle.
Many villagers were members of a rice bank organized by Redd Barna until it failed in 2002.
Some villagers still practice krom samaki, a form of cooperative farming introduced by Khmer
Rouge. And others are involved in trade-specific associations, such as fishermen groups.
However, it became clear that the roles of many of the market associations have an equivalent
within the “culture” of the village and require no formal organization. Even with a formal
name, provas dei (work-sharing) is not usually reported as an association and must be directlyprobed for. In a relatively uncomplicated agricultural society, market organizations such asthese are not as meaningful as personal business contacts. More anonymous (non-family)business contacts are correlated with a smaller incidence of produce inspection, which could becounted as a reduction in transaction costs as well as an increase in generalized trust.
“My husband was very clever. He used to borrow rice from the bank for very cheaply during
the harvest, when the price was low. We would eat this rice until the price for rice went back up
and then sell our harvest. We would always make enough money to pay back the loan and buy
vegetables for the whole year. Now we have to eat our harvest and we don’t make as muchmoney.” – Da Tmei, age 63, wife of Keo Rouern
A study by Rao (2003), which focuses on community driven development (CDD) in thecreation of social funds, finds that although people can be satisfied with the results of theinstituted program, independence from the “mother” of the program (usually the NGO) often
means an end to community participation. The study also acknowledges that it is much easier to13

empower leaders and powerful community members than to enact change collectively.
Although this may be effective, it comes at the risk of indirectly encouraging abuse of powerand, possibly as a result, furthering inequality. This is especially worrisome in the context of
Cambodia where an amount of corruption among leaders is tolerated and expected. Although
the current village heads have good reputations, one villager (Seng Duke, quoted below) related
that this was not true of their predecessors. There is an informal consensus among Khmers andsome experts (see interviews with Luco 2004, Ollier 2004b, Vickery 2004) that democratic
ideals of participation and ownership are not yet rooted in Cambodia and that successfulprojects, as Rao fears, lose momentum upon departure of the NGO. The closure of the ricebank both supports and refutes this theory. Although Redd Barna was able to leave the ricebank in local hands, the bank failed when the individual trained by the organization to manage it
died.
Most villagers are not members of a formal group and rely on the heightenedliberalization of the community to provide for their diverse needs. This means that individuals(or families) act with a strict self-interest that collectively manages to regulate community
behavior and services. If informal regulation fails, the Wat, chas tum (elders), or me puhm
(village head) can, and often do, intervene. Furthermore, there seems to exist a strong limitedgroup morality that is far advanced of what social capital theory would predict for a community
with such a low density of networks and limited means. Most villagers (90% or more) report
trusting their neighbors, teachers, doctors, and local leaders a bit or a lot and 75% of villagers
report their village to be safe or very safe and would have no fear of walking around after dark.
And furthermore, more than 90% of villagers believe that someone in the village would help
another, if they had the capacity to do so.
“People don’t want to say that they will help anyone or else everyone would ask them forsomething. But the reason I say there is always someone to help in this village is that no one
ever gets abandoned.” – Bun Ri, age 48“I have a mysterious illness and the doctor says there is nothing he can do. But he did not
charge me. I am only 47 years old but everyone thinks I am 60 and so they are nice to me andtreat me like an elder. This family has been very nice to give me a small place to put a houseand helped me build it. My brother helps me some, but not as much as these children. They
make the suffering less.” – Kong Oern, the only destitute in Veal village
Although other avenues for emergency support exist, such as the Wat, villagers
primarily rely on family for support. Most loans taken and given involved family members,
and, in most cases involving family, no interest was paid. 97% of respondents replied thatfamily would help them in times of need. A large and strong network of relatives enables acouple to net a large sum of money at the wedding. Based on data about the last marriage in thefamily and discussions with the villagers, the trend appears to be that wedding money helps the
new couple establish a homestead and feel insured but does not predict long-term support orfinancial success.
“After a wedding, the couple has to make a decision between a big house with a small piece ofland or a big piece of land with a smaller house. I always encourage newcomers and married14

couples to buy more land because they can improve their house later. But many people do nottake my advice and then cannot grow as much rice.” – Toye Chun, age 40, Veal village head
Given the relatively small social role of Wat Prin (at least in the context of Cambodia), it
is expected that strong leaders have evolved in these villages to compensate. The village heads(me puhm) are generally considered to be effective and are looked up to by the people,
especially considering their contribution is largely a public service (Luco 2002, p. 132). The
two villages chiefs have involved themselves in at least twenty communal events over the past
year. Villagers report that they trust their local government (90%) and almost all of theinterviewed villagers believe the village head would be helpful in solving disputes. Overall,
80% of villagers are confident in the leadership and integrity of the village heads and commune
chief. The village heads as well as the commune chief are very humble, and live as any othervillager in the commune. Their modest income from the government is generally acknowledged
to be inadequate compensation for the labor involved.
“Our village head is the best we have had since I moved here 25 years ago. He is the firstvillage head I can remember who has not stolen money. And when people are confident that
their money is not wasted, they give more.” – Seng Duke, age 52
With the gaining popularity of the participatory or decentralized approach to development
among international aid organizations, local leaders are often approached to coordinate
development efforts due to the efficiency of interacting with a single spokesperson. Many
programs have shown and many practitioners have pointed out that this risks development
efforts being “hijacked” by the community elite. Platteau (2002) points out that this generally
occurs where leadership has “parochial tendencies”—feelings of self-righteousness and elitismthat stymie their abilities to empathize with commoners. Given that these tendencies are notfound in the local leadership in Krosang and Veal (and likely many other Cambodian villages),
it would be worthy to explore the potential of channeling resources through leaders in thisregion.
Although the villagers manage to regulate themselves, they do not necessarily encourage
further development in the process. Based on a number of factors, such as lack of insurance,
fear of the new procedures (especially in agriculture), and satisfaction with current income, thebreadwinners in these two Khmer villages are neither particularly entrepreneurial nor interested
in artificially large increases in their livelihood. Only one-third of the interviewed villagers
would be willing to work harder for double the pay (akin to overtime pay) and only two-thirds
would invest in something with a very good chance of making profit. All villagers, even thoseat the subsistence level or under, claimed to be satisfied or very satisfied with their income.
“I grow as much rice as my land gives me. Some years we live better and some years we live
worse. But we never live poorly, even when we run out of rice and have to borrow. The
commune chief says that this land can be used for dry-season rice. I will let my children decide
if they want to grow that rice here. I am too old to learn.” – Chuon Noun, age 39
Besides potentially limiting income-generation capacity, this characteristic risk-averse behavior
seems to be associated with a lack of sustainability in development programs, as alluded toabove in our discussion of Rao (2003).
15

Insurance for most villagers is limited to small sums of emergency aid for planting,food, and other idiosyncratic shocks. Experimenting with a new business strategy or planting
technique is not behavior that a given family’s informal insurance network (generally the
relatives) is willing to support or be indirectly responsible for. The unfamiliarity with basic
business principles and institutions, which discourages villagers from taking appropriate loans
and making some guaranteed investments in their business and human capital, represents one of
the largest constraints to economic development. Most loans are taken out for house building,
medical reasons, weddings, basic agriculture inputs, and for food. With the exception of theoccasional investment in fertilizer, a motorbike, motor-powered plow, or commonly cultivated
non-rice crops, which are hardly inventive or risky, villagers in Krosang and Veal do not invest
in efficiency or future markets. The majority of respondents who declared they had not given or
received business credit (deferred payment or pre-payment for delivery of goods) in the lastyear expressed that they were not familiar with the procedure at all and were suspicious of“business” (ro’see) in general.
“When I was young, the villagers used to change crops very often. Some families tried coconut,
watermelon, mapre, vegetables, and sometimes people changed the type of rice when a newvariety came from Battambang. We tried watermelon, but it wasn’t so easy when we had to buy
rice. But many others were very successful. And when the crop wasn’t so good, they borrowed
money or sold a cow and switched back to rice. Since Pol Pot time, only a few people haveswitched. Some people have not even switched back to the [profitable] crops they had before
the war. Maybe they think Brother Number One is still watching them.” – Vung Nee, age 65
Those who do make investments in business are often very successful. One villager
partitioned a large portion of his land to grow watermelon and was very confident that he had
adequately diversified his risk and made a solid investment. He estimates his crop will net him
at least three times the value of producing rice on the same land. Unfortunately for many
villagers who live at the subsistence or near-subsistence level, such risk-abetting opportunities
are not available. The commune chief offered another explanation for the lack ofentrepreneurial behavior in the villages:“In the last six or seven years, the weather has been very strange. We have had good growing
seasons back to back with very poor growing seasons. Four years ago, the villagers were very
contented with their rice yields and spent their extra money repairing houses and celebrating
weddings. But in the last three years, there has been a lot of flooding and many plots were
washed away. Vegetables grew very well that same year and so I encouraged many families tomake their plots into gardens. Only a few took my advice. The next year, when the floods werebad, I gave everyone the same advice, but no one listened. Everyone told me that rice was thesafest thing to have in poor seasons and they tried to build up their plots. Now everyone is indebt and they won’t even consider planting vegetables. There is a large market in Siem Reap.
It is very frustrating. And now we have more animals becoming ill each year. People won’t
take a big risk if they are not sure they can sell their animals if they run out of money.”
The commune chief is also critical of the recent incidence of land sales, lamenting that his mostproductive villagers have left.

16

“I understand why people sell their land. Because of Siem Reap, the price of land is high andone can buy a plot twice the size for the same amount in another village. I don’t blame people
for leaving. But the best farmers are also the smartest and they were the first to sell their land.
This farmer over here started growing vegetables two years ago and began making a lot ofmoney. But he sold his land and moved to the north. Many people are doing this and now only
the rice farmers are left! The villagers have no one to show them how to make good crops now.
And the newcomers are no good. They are all businessmen from Phnom Penh and Kompong
Thom. They work in the markets and don’t even have time to cultivate their land. Someone
should work the land!”The lack of improvements in agriculture in Veal and Krosang is a three-fold problem. Alreadyin debt and concerned about the death of their livestock, villagers lack even the most basic
insurance. Because of poor outlook for the growing season and ill-considered confidence intheir rice crops, villagers are not willing to take a well-calculated risk. And since they lackmodels of successful investment in vegetables, there is a local deficit of information about thetechnology and investment procedures. Part of the dilemma is structural, while the other can be
remedied with an adequate provision of information and change in perception. It is to thisintersection between reigning social and market forces to which we now turn our attention.

PART V – AN ECONOMIC MODEL OF SOCIAL CAPITAL AND
MARKET INTERACTION
The Partitioning of Social Capital and Social Market Capital
Looking back over the literature, it is difficult to reconcile the basic models of social
capital that focus only on trust and collective action with the lessons from Wiig (2003), Platteau(1994a, b; 2002), and Granovetter (1985) about the underlying influence of the market sphere.
Indeed, Platteau (1994a) remarks, “market logic deeply affects the way people relate to eachother.” Given that people spend the majority of their waking life working or in pursuit ofwealth, how could a comprehensive model of social capital not acknowledge the role ofbusiness? The assumption that variation in wealth and social capacity could be explained neatly
by a few dimensions of social behavior, as exemplified in the literature, is too narrow. In
modern societies, where the spheres of private and social life are often very separate, there still
exist overlaps, such as job connections, family in business, and individuals who simply excel at
networking. In the context of rural Cambodia, best friends, trusting coworkers, and personal
sources for news are very often forged while conducting business. Furthermore, overall
knowledge about local markets, personal capacity for income-generation, and strong support
networks can all be advanced through social forays into the market.
In the patriarchal homogenous setting of rural and semi-rural Cambodia, social capitalbuilding, as previously defined, could be viewed as “women’s work.” Allowing the distinction
between social market behavior and common social behavior gives the breadwinner, in addition
to the overseer of the family (usually the wife in this area), a role to play in social capitalbuilding. While production on a farm is dependent on the contributions of all members of thefamily, women are typically charged with maintaining cordial relationships with the neighbors
and the monastic community, attending to local problems and disputes, and keeping up thehousehold. The men are responsible for maintaining business connections, heading up local
17

government initiatives, and devising secondary and tertiary incomes. Based on the operational
definitions of social capital previously considered in the literature, the male household headplays a relatively small role in social capital creation.
The model developed to describe the combined effect of social capital and market
interaction relies on two parts: (a) a separation of social market behaviors from the core ofsocial capital indicators and (b) exploring the intersection of these two separated attributes.
Expanding upon Durlauf and Fafchamp’s (2004) individual-level model, I examine the effect ofexogenous factors, market interaction, and social capital—structural and cognitive—on
household wealth. Wealth of household i, defined as i, is firstly explained by characteristics ofthe household, such as vocational skills and makeup of the family, which are scored collectively
as family endowment, Xi. Wealth is also explained by household’s communications capacity,
Yi, which includes phone, television, and radio usage, as well as resources for local
transportation. In the short (6 months) and medium terms (1-3 years), family endowment andcommunications capacity remain exogenous. Only in the longer term are families able tochange their structure (choice of how many children, ratio of schoolchildren to family labor),
adapt vocational abilities, and affect their communications supplies and infrastructure.
Within the context these exogenous elements, the structural and cognitive levels ofsocial capital, SCD(Fi) and C(SCiD|Fi), respectively, play a distinct role. Fi is the set of vectorsthat each function within the model draws upon and the subscript D signifies that the component
directly effects wealth (we will examine indirect effects below). Although Durlauf andFafchamps (2004) believe that solely expectations (or cognitive social capital) explain behavior,
I disagree on the grounds that the effectiveness of some institutions of social capital, such as
religious associations and certain ethnically distinctive organizations, is propagated by values
and norms that are so ingrained, they are part of a different and longer-term subset of overallsocial capital. Structural social capital, similar to family endowment and communications, isthe networks and values which were formed by past social capital, and are very unlikely to bechanged in the short or, in some cases, medium term. Institutions, such as health and culturalgroups, as well as long-standing village traditions and family credit/insurance networks areincluded in this definition. On the other hand, the characteristics filling out the cognitive social
capital component, such as levels of trust, solidarity, and collective action, are able to change
dramatically in the short-term. Being cheated once by a trader may radically alter one’s overall
trust in businessmen, just as a single poorly attended road maintenance meeting could
discourage participants from future endeavors.
The final component of this model is market interaction, MID(Fi), which describes themarket-based associations, both formal and informal, that one has, and the depth of one’s
participation in the market. Expectations about future market interaction are captured bycognitive social capital, C(SCiD|Fi), since these future actions are merely adjustments of
expected behavior in the social environment of one’s business. These components are notendogenous, as one might expect, for the same reason that cognitive and structural social capitalare not endogenous—they operate on different time horizons. One could also see the potential
for endogeneity between SCD(Fi), C(SCiD|Fi), and i. Higher wealth, for instance, could cause
a household to be favored socially or could give a household the opportunity to spend moreleisure time socializing, and thus causality would flow in both directions. However, market
interaction is included and focused on in this model precisely to control for this possibility.
Social relations arising out of (and also causing) the success of one’s business will be reflected
in one’s market interaction. The outcome is then described by the equation:18ωi =α + χXi +γYi + β1SCD (Fi ) + β2C(SCDi | Fi ) + β3MID (Fi ) + εi
In order to observe the effect of market interaction on income-generation, it is useful tounderstand in terms of efficiency gains in business, i. These efficiency gains can take the formof lower transaction costs, entrepreneurial behavior, and increased access to credit andinsurance markets. The gains are derived specifically from communication capacity (X i) andcognitive social capital, C(SCIi|Fi), which enable individuals to reduce market transaction costs,
and also from repeated and meaningful social interactions in the market, MII(Fi), whichfamiliarize the individual with market mechanisms and introduce her to future partners andcreditors. These components carry the superscript I because they are said to indirectly bringabout changes in wealth. Certain dimensions, such as socialization, only contribute to wealthwhen they are channeled through interactions in the market. One who socializes with others
often will only be able to raise her income if she uses this opportunity to cultivate profitable
relationships or learn valuable information. Platteau (1994a) comments that, as a socializer,
money is particularly powerful and “can invest its possessors with qualities missing in them”,
such as entrepreneurship. In a marketplace guided by a limited-group morality, bilateralrelations (among kin) dominate and generally form the foundation upon which manytransactions in the village eventually lie. This foundation includes perfect or nearly perfect
information sharing, kinship and friend-driven support networks, and mutual trust. However,
Platteau (1994b) and Ostrom (1990) have noted that bilateral relations often lead to multilateral(among friends) types of relations, which can, in turn, lead to secondary socialization, a mode ofrelating with others that is based more on roles (e.g. client-firm) than on the establishment of astrong personal relationship. Nevertheless, the spheres of private and social life in limitedgroup morality communities are not as neatly separated as they are in modern societies, which
are based on wider and more anonymous interactions. In communities exhibiting a limitedgroup morality, time is often wasted settling disputes and entrepreneurial talent is wasted due toinefficient norm sharing and a communal inability to capitalize on market surpluses (Platteau
2002). However, in secondary socialization, which could be described as the intermediary
between limited and generalized group morality, the increased contact with businessmen canevoke entrepreneurial talent, and, with increased socialization, interpersonal problems can becontinually ironed out. Efficiency gains i are described by

υi = b + γ υYi + β2υC(SCi I | Fi ) + β3υ MIi I (Fi ) + εi
In order to understand the mechanism through which these indirect effects contribute to
wealth, it is helpful to visualize a composite equation relating i and wealth:ωi =α + χXi +γYi + β1SCD (Fi ) + β2C(SCDi | Fi ) + β3MID (Fi ) +ηυi +εi
Wealth is the explained by (a) the income effect arising from efficiency gains, (b) the direct
influences of structural and cognitive social capital, (c) communications capability, and (c) the19

productive endowment of the household. Social capital, then, is directly associated withchanges in livelihood and indirectly responsible (channeled through efficiency gains in themarket) for increases in wealth. We now turn to the task of constructing each component of themodel and empirically validating the model.

PART VI – EMPIRICAL VALUATION OF THE MODEL MECHANISM

ωi =α + χXi +γYi + β1SCD (Fi ) + β2C(SCDi | Fi ) + β3MID (Fi ) + εi
The primary purpose of this section is to investigate each of the determinants of the above
equation, which relates wealth to social capital and market interaction dimensions. It should beemphasized that the following data manipulation is carried out using a data set containing 48
observations and it is therefore necessary to reduce the data. Factor analysis is not only suitedfor this task and but is encouraged by scholars working on social capital measurement systems(particularly Grootaert et al. 2004).
Given the linear quality of questionnaires necessary for accommodating quantitative
data, economists will find the task of analyzing social capital econometrically to be particularly
difficult. Social capital is a characteristic of a society or individual that is almost entirely
determined by the local culture in areas lacking strong institutions (rural areas in poor
countries), and is particularly vulnerable to both observer and responder bias. At this point in
the development of the concept, it is not feasible to hope for reliable cross-sectional data or evenregional data. However, on a village or commune level, for certain regionalized ethnic groups,
or for occupation groups exhibiting high homogeneity (e.g. traders in Fafchamps 1998, 2002), it
is possible to separate social capital into its component parts and analyze each independently.
Until the conceptual understanding of social capital shifts and more advanced (or perhaps morebasic) measurement tools are developed, it will be problematic to place social capital in an
empirical model with working and human capital, as proposed by many scholars.
In this study, the components of social capital and market interaction are broken apartinto their constituent parts and analyzed using demographic and anthropological data. These
constituents are then aggregated by means of factor analysis and related to wealth. This is themethod for consolidating data preferred by the World Bank (Grootaert et al. 2004) and Sahn andStifel (2003). The results of the factor analyses can be found in Appendix 4. The components
and their constituents (with variable names in parentheses) are as follows:
Wealth (wealth)
Value of livestock (livestock)
Ownership of a radio, television (radio, tv)
Floor area of the house (floorarea)
Whether the house was painted (housepaint)
Quality of flooring and roof (floorlow, floorhigh, rooflow, roofhigh)Quality of outer and inner walls (owalllow, owallhigh, iwalllow, iwallhigh)Type of toilet (latrine)
Amount of agricultural land (land_ag)
Share of land used for dry or wet rice (ag_land_dry, ag_land_wet)
Whether the well was shared (wellshare)20

Ownership of a motorbike (moto)
Family Endowment (familyendowment)
Number of family members (fammembers)
Intra-household maxima for education (maxedu)
Foreign language capability in the family (maxlang)
Intra-household maxima for occupation type (maxocculow, maxoccuhigh)Communication (communication)
Dummy if the road quality is bad (badroads)
Ownership of motorbike (moto)
Ownership of cellular phone (dcellular)
Dummy if family watched TV very often (dtvtime)
Dummy if family listened to the radio often (dradiotime)
Social Interaction (socialization)
Number of friends (friends)
Hours spent socializing each week (socialize)
Participation in election campaign (election)
Participation in information campaign (info)
Yearly trips to the monastery (wattrips)
Dummy for news coming for a social source (socialnews)
Dummy for individuals who discussed the news often (newschatmuch)
Groups and Networks (groupsnetworks)
Membership in the monastery (watsoc)
Membership in another social association (othersoc)
Dummy if founded by local initiative (dfounded)
Amount of cash contributed to associations in a year (cashcontribution)
Number of combined family work days provided for the organization (worksupply)
Dummy if “selfless” reason given for membership in organization (whyassoc)
Dummy if perceived effect of the organization on the community is negative(communityeffect)
Violence and Crime (violencecrime)
Dummy if village is reported as “safe” (dsafety)
Dummy if village is reported to be “safe” at night (dnightsafety)
Number of non-violent crimes occurring in the past year (nonviolcrime)
Dummy if the crime was reported (dcrimereport)
Dummy if the crime was not reported (dcrimenoreport)
Identity (identity)
Number of times the family was helped by another family in the last year (familyhelp)
Amount of money received at wedding divided by number of guests (wedding)
Dummy if respondent treats someone with higher education differently (ddifedu)
Dummy if the family has non-family support, e.g. insurance, emergency help (hardtime)
Trust (non-factor analysis)
If the respondent generally trusts others (gtrust)If the respondent agrees that others are concerned with their own welfare (downwelfare)Collective Action (non-factor analysis)
Dummy if the family has joined in often to address communal problems(dcommonproblem)
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Market Associations and Networks (marketassocs)
Membership in a non-provas dei association (othermsoc)
Association founded by local initiative (mfound)
Dummy if interacts with traders/partners daily or weekly (grpinteract)
Dummy if respondent bargains each time to obtain price (grpbargainb)
Market Depth (marketdepth)
If individual would work twice as hard for four times the pay (worktwice)
Number of business associates (not including family) (businessassocsnofam)
If the respondent has loaned money in the past three years (loandum)
If the respondent has used business credit in the past three years (buscredit)
Dummy if respondent would invest with a “good” chance of profit (goodchance)
Highest amount loaned in the past three years (loanamounta)
Dummy if respondent receives market information from social source (socialmarket)
Respondent believes people trust each other for borrowing/lending (credittrust)
Efficiency Gains (marketdepth)
The aggregated level of social interaction of the respondent (socialization)
The number of friends divided by the number of business associates (friendsshare)
Dummy if respondent trusts shopkeepers and traders (dtshop)
The aggregated level of communication capability (communications)
Wealth Determination
The definition of wealth or income depends on the situation to which one wishes toapply it. Poverty and poverty lines are desirably based on income in developed countries, where
the household acquires income in a fairly standardized manner and is lawfully required to report
it. In developing countries, receiving an income may not be the conventional manner ofobtaining wealth. Generally, in this situation, it is more practical and accurate to measureconsumption expenditures. However, in rural areas even consumption expenditures can bedifficult to measure. In this study, an asset-based measurement of wealth is used for two
primary reasons. First, recent research indicates that this method creates a more accurate
ranking of wealth while avoiding the many problems inherent to consumption-based income
measurement (Sahn and Stifel 2003). Second, a precise value for income is unnecessary forevaluating community-based techniques for poverty alleviation.
Considering that the objective of most anti-poverty programs is to encourage peoples’
accumulation of productive assets, and that some inequality alleviation is also based on the
distribution of income-generation assets, it makes sense to use an asset-based wealth ranking
system. Conversely, measuring consumption is fraught with many problems. There is
generally a lack of recent data, especially in the poorest countries. It requires data on the pricesof goods, nominal interest rates, and depreciation rates. It also requires valuation of land inareas where markets for land exist. And ultimately, it is still problematic to compare thesevalues within the country (Sahn and Stifel 2003). On the other hand, assets in poor countries
are typically fewer and easier to measure and not prone to reporting bias. Usually, durable assets
such as radios, TVs, bicycles, motorbikes, and housing materials are used to construct thewealth index. Using the method developed by Sahn and Stifel (2003), and the assets determinedby Krishnamurthy (1999) and Ebihara (1968) in their studies of the Cambodian countryside, aranking of the relative wealth of each household in Krosang and Veal villages was created.
22

As noted by Judy Ledgerwood (1998), Cambodian villages are very homogeneouscommunities, in which social forces exist that restrain individual families from distinguishingthemselves. In Krosang and Veal there were only a few basic building materials andarchitectural styles used throughout the area. Residents commonly owned the same television,cooking equipment, and dishware. In total, there were only three different types of wells in bothvillages. The assets were carefully screened for sufficient variance before being included in thefactor analysis. For most components of wealth, it is straightforward to predict the effect on
wealth. For instance, the larger the amount of agricultural and floor area of the house, the richer
the family is expected to be. However, households that own proportionately more wet-season
land (considered inferior and less profitable than dry-season land) were adjusted to have lower
wealth. Other factors, such as ownership of a motorbike, radio, and television clearly add to thevalue of the household’s assets. It is more problematic, however, to value the quality of the
housing materials. In order to do this, each type of material (bamboo, wood, aluminum,
concrete, etc.) was separated into a group representing poor, medium, or high quality material,
as outlined by Krishnamurthy (1999) and Ebihara (1968). Dummy variables were created forthe poor and high quality materials, while an absence of a value for both of these dummies
indicates a medium quality material. A more thorough breakdown of this valuation system canbe found in Appendix 1.
Upon verification of the factor analysis, it was confirmed that the poorest and mostdestitute villagers ranked the lowest in wealth while those ranking near the top held
considerable sums of land, a motorbike, and owned a large and well-built home. The respective
weights given to each asset can be located in Appendix 4.
Defining the Exogenous Components
Family Endowment - Xi
Many families, either because of strong family support, hard work, or smarts, are better
equipped than others to increase their livelihoods. Of the 335 individuals in the 48 households
interviewed, 37.9% are farmers, 27.2% are students, 19.4% are unemployed, and the remaining
14% occupy other professions in the construction, tourism, or government sectors. The mean
years of education for breadwinners is 3.2 (median of 2), the median age is 43, and 10
individuals can speak a foreign language. In order to assess the endowment of a family as awhole, and to deal with the variation within families, intra-family maxima for education, foreign
language, and occupations were used. As in the determination of wealth, the different
occupations were divided into three categories: poor, medium, and rich. A detailed descriptionof how each occupation was coded can be found in Appendix 1. I factored the maxima foreducation, foreign language, and occupation, as well as the size of the family to determine aranking for family endowment.12

12

Based on discussions with local Cambodians and on a subjective analysis of the familyrosters, I expected older children to generally be kept on as farm laborers and younger children
to be given the opportunity to go to school. Based on the correlation between education and“rank” in the family, I find no evidence of this favoritism.
23

Communication - Yi
Although I originally expected infrastructure and services in the villages to play a largerrole in the determination of social capital, I find that, primarily due to the homogeneity of thecountryside, these factors are not a large influence. With very little variation, respondents
receive water from the same (NGO-built) pumps, use the same type and brand of battery, andgenerally acknowledged that they are satisfied with the quality of phone, education, and healthservices in the villages. Only in the perception of road quality in the villages, did the villagers’
responses have any variation. Measured components in this factor were the household’s radio
and television use, ownership of a cellular phone and/or motorbike, and the respondent’s
perception of road quality. These components measure the quality of communications
infrastructure (roads, signal quality) and the ability of the household to utilize this infrastructure(motorbike transport).
Defining Social Capital Components
Social Interaction - C(SCiI|Fi)
Social interaction is a necessary, although not a sufficient condition for the formation ofsocial capital. Villagers cannot hope to establish neighborhood committees, health groups,
music groups, and more without a strong base of relationships grounded on positive experiencesinteracting with one another. Although villagers in Krosang and Veal are very open and interact
casually with neighbors every day, they do not often form deep and lasting relationships withthese people. Therefore, a qualified definition of social interaction must focus on exchanges
that are deeper than informal contact.
This dimension considered exchanges
that exhibited both breadth and depth. This
includes not just the number of friends, but also
the amount of time spent socializing eachweek. It not only includes the source of news,
but also how often the respondent discussed thenews with others.
Because elections are
particularly social occasions, I noted
individuals who participated in an election
campaign. Households that participated in
information campaigns, which are by naturesocial, were interpreted to have higher Wat Prin, Veal Village Entrancesocialization. Villagers who only socialized when visiting the monastery for holidays were
found to have less social interaction, because attending holidays and socializing is required in
the community (by means of strong social and religious pressure). Primarily due to monetary
constraints, there were very few villagers who went out for drinks or to a restaurant with friends
and this variable was removed.
Groups and Networks - SCiD(Fi)24This dimension is sometimes labeled “formal association” because it describes the
respondent’s involvement in officially acknowledged organizations, groups, and clubs. The
local Buddhist monastery is such an organization and almost all villagers actively participate init. Given the lack of variation in monastery membership across households, I focused on otherassociations. As in the determination of social interaction, it is important to examine both thedepth and breadth of the involvement. Specifically, I considered: (a) if the association was
founded by community members as opposed to religious and government leaders, (b) how muchmoney the household donated to the organization, (c) how many days of work the householdgave to the organization. In order to gauge the satisfaction derived by those who participate in
the organization and those that benefit from them, respondents were asked to evaluate their own
participation and to rate the influence of the organization on the community as a whole.
Due to the rarity of membership in non-monastery associations as well as the great
benefit derived from membership in these associations, they are expected to contributesignificantly to the groups and networks dimension. If the organization was founded bycommunity members, it is expected to have a more positive influence. Involvement in theseorganizations is also important; the more cash contributed by members and the more work
supplied, the greater the importance and more meaning the association provides the participant.
Particularly if the respondent provides a “selfless” reason for membership (to benefit to thecommunity, to grow economically), the organization is valued higher. If respondents believed
an association had little impact overall on the community, the association was valued lower.
Violence and Crime - SCiD(Fi)
Grootaert (2004) states that conflict and violence in the community can be measured
through three avenues: the extent and trend of violence, the contribution made by internal
divisiveness in the community, and feelings of insecurity. We would expect that the violence
and crime reported by the respondents’ would match the statistics kept by the village head.
Unfortunately, enough individual respondents directly stated that they intentionally did notreport certain incidents to invalidate any data taken by the village head.
“I am not ashamed to tell you that our family had a problem with violence this year. But I was
ashamed for the whole village to know. At first, I told no one, because I thought they might
think less of my family. But somehow the word got out. I was surprised because no one said
anything to me. Finally, one day, a woman of the village said that it is no problem, because
there are bigger problems in Siem Reap town. I was glad I did not report the crime because I
would have to pay for the form. Do you know the form costs 20,000 Riel? [$5.00]” – Chhum
Ty, age 40“We had two chickens stolen a few months back. One year ago, we had more chickens stolen.
I never report these things to the police, because they are so small and maybe people will think
our family is bad luck.” – Wife of Bat Pich, age 46
Given the inaccuracy of the village-level data, I based this dimension on the villagers’
perceptions (using a verified question scheme), and the villagers’ own willingness toacknowledge and report crimes. Specifically, the respondents were asked if they felt safe
overall in the village and if they felt safe walking around at night. The second question, which25

created an image that was easily accessible, was an attempt to overcome the perception bias
concerning this question acknowledged in the literature. I then asked villagers to report to me
any crimes they experienced in the preceding year and whether or not they reported them to theauthorities. Respondents seeking justice and valuing fairness (and willing to report crimes) are
interpreted as positive actors, while those who feared reporting are viewed as negative actors.
Identity - SCiD(Fi)Commonly referred to as “empowerment” in the literature, the identity dimension
describes the self-esteem and capability of people to negotiate the local geopolitical terrain to
improve their own livelihood or that of the community as a whole. A World Bank report (2002)
states that this dimension in fact “transcends social capital,” because it is oftentimes heavily
influenced by the state or local institutions. In this study, identity is referred to in threeparticular ways: the feeling of belonging one has in her community, one’s ability to tolerantlyinteract with others in the community, and one’s “army” or her network of family, friends, andacquaintances who would be likely to support her. Although there are many ways of measuring
this dimension of social capital, I focus on four of the most important factors: (1) non-family
support structure, (2) the amount of money received per guest at the last family wedding, (3)tolerance for educated individuals, (4) and the number of times the household was helped byanother family in the preceding year.
Although the aforementioned elements may not outwardly appear to make up a holistic
measurement of “identity,” each is a strong proxy for other characteristics not explicitly
included in the model. Non-family support structure includes friends, religious leaders, elders,local government, and organizations. Since it is usual to have family serve as insurance or backup during emergencies, the existence of non-family help is emblematic of strong personalconnections. The wedding funds similarly express the strength of the household’s network offriends and family (except for couples married during the Khmer Rouge years, when weddings
were communal affairs).
“At a wedding, everyone puts money into an envelope for the bride and groom to help them
begin their new life and pay back the cost of the wedding. The amount of money that people
give is special for each family; maybe it depends on the status of the two families but usuallypeople give more money to their very good friends and close family.” – Wife of Oak An, age
43.
Expressing tolerance for highly educated individuals, be they fellow villagers orbusinesspersons, is a sign of high self-esteem and willingness to accept and engage in modern
relations. There is a strong hesitation in semi-rural Siem Reap to trust educated persons or
adopt new methods or ideals that threaten or contradict prevailing views.
“When you ask me this, I think about the foreigners who sometimes come from the angka[organization, usually NGO] and ask the village people questions and tell us to grow vegetables
or use condoms. I do not know if I trust these people. I wait until someone else follows theangka first.” – Ex Sompeat, age 47

26

The final element measured under identity is help received from outside the family in the past
year. When discussing this question with respondents, it was made very clear that only
“extraordinary” acts of kindness or help were appropriate responses. Based on field tests, a listof such acts was created to help guide the questioning. These included special gifts, loans
without interest, free help with work, borrowing of a motorbike or bicycle, lending of a pump,etc. Although this question would be helpful in determining the extent of the family’s support
network, it is not controlled for necessity, and is therefore only a measurement of how manytimes the family chose to solicit help.
Trust – C(SCiD|Fi) and C(SCiI|Fi)
Many authors question whether trust is essentially social capital, because it can beviewed as the most basic ingredient of judgment and serves as an enabler for all other avenuesof social interaction. The issue of trust, which is debated across all social science disciplines,
was formalized in economics by Putnam et al. (1993), who focused on the role of trust-buildingin the enhancement of beneficial cooperation. In the discipline, there existed a period in whichscholars hesitated to move away from using trust as a guiding principle, in fear that social
capital would become to complicated and thereby become less accessible. After it became clearthat trust was difficult to operationalize, scholars began, among other things, separating social
capital into various dimensions. This is the form presented in this work. Instead of existing as
an overriding concept, trust now serves a very particular role in smoothing social interactions
and reducing transaction costs.
In Krosang and Veal, the villagers are reportedly very trusting of particular groups ofpeople in the village, such as neighbors, doctors, teachers, and the local government, but do nottrust groups outside of the village, such as taxi drivers and strangers. While this general
information is very valuable, it does not help describe the variation in trust among individual
households in the village. Without the ability to observe the variation in the absolute level oftrust between villagers, we defer to a more subjective measure of trust. The authors of theWorld Values Survey use the following question: “Generally speaking, would you say that mostpeople can be trusted or that you can’t be too careful in dealing with people?” Although therelevance of this question has been persuasively disputed and meaning of the response isunclear, it is nevertheless useful in a very homogeneous village setting for extracting a
subjective view from the villagers vis-à-vis trust. The results can also be used in conjunction
with related questions to arrive at a few conclusions. At least 46% of respondents believe
people can generally be trusted, but only 23% agree that most people in the village are honest.
Furthermore, only 10% of villagers believed they could leave hired workers (usually othervillagers) without supervision. This indicates, perhaps, that generalized trust, or being trustingof strangers, is a virtue of the society that, for some reason, is presently not in practice.
Comparatively, 67% of the villagers believe that people are generally honest in business(specifically concerning trading and credit). Perhaps due to increasing monetarization, villagers
are being compelled to allow business to supersede their personal feelings.
“When you ask me about trust, this is what I think. During Sangkum times, everyone wasprosperous and happy but people did not trust each other. If I sold fertilizer to someone, they
always ask questions, like ‘where did you buy this’ and ‘did you mix in ash?’ [commonly used
to dilute fertilizer]. Some people did not trust me at all and said they would pay me for the27fertilizer after it worked good. Because I trusted others, I made this deal often. But nowadays,
there is a lot of trust. Everyone buys my fertilizer and some people ask me as a friend to help
them put it on their field. It is much easier to do business this way!” – Chuit Chua, age 65
Chuit Chua’s open trust for clients and the transparency by which he conducts his business, notto mention his enthusiasm for his work, describes the behavior documented by Platteau (1994a)of an individual cooperating in the market “game” in a rural village setting.
“To the extent that individuals in these societies know one another well, can observe one
another’s behaviors, and are in continuous interaction, their patterns of relationships
approximate a repeated prisoner dilemma game with infinite or indefinite horizon. Under these
conditions of perfect information and repeated interactions which characterize small-groupsettings, any pattern of collective behavior, including co-operation, can be sustained.” – Platteau(1994a)Collective Action - C(SCiD|Fi)
Although collective action is the expected end-result of strong social capital, it is also a
predictor of future collective behavior. Insofar as collective action leads to increases in wealthfor those households involved, it is an appropriate component of this model. However, given
the cause and effect relationship between social capital and collective action, it runs the risk of
introducing a very endogenous element into the overall model.
In any case, the questionnaire used for this study was not able to adequately capture thiselement holistically. Respondents reported how
many times in the past year they came together
with the community to solve a problem andhow many days they worked communally.
Unfortunately, I did not control completely fornecessity. If there was particularly bad flooding
one year, the data would be biased upward,
because the villagers would be forced to cometogether to address the problems. The responseto the question about how many communal
workdays they took part in, respondents could
answer: (1) none, (2) once, (3) a few times, (4)many times. Although the response set is not
perfectly consistent, the option “a few times,”
Communal house building, Krosang
when translated, became “some times” and“many times” became “a lot.” These responses are then a subjective report of the amountcommunity work committed by the household. I acknowledge that this measure is inferior toother options potential question varieties, but it is the best that can be done with the data set.
Defining Market Interaction
Market Associations and Networks - MID(Fi)28As noted by Ebihara (1968), Cambodians have a long tradition of communal interaction
in business. The system is typically based on strict reciprocity, although some very establishedvillages have been known to use a more informal/personal system of exchange. This isespecially visible in rice farming communities, where a system of labor sharing, called provasdei, allows villagers to call upon additional labor during the work-intensive rice transplanting
season. Participants expect be repaid in-kind before the end of the season. In Krosang and
Veal, an estimated 80% of families cultivate rice and thus participate in the provas dei system.
This form of labor sharing is now so fundamental in this area that it is not a useful measure ofvillagers’ market associations and networks.
“To grow rice well, you need to transplant quick. My family cannot do this fast enough and so
our neighbors help. We have helped each other for years. I don’t know if anyone in thisvillage can grow rice without help.” – Anonymous female, age 42
Villagers who participate in non-provas dei market associations are rare (only about
31% reported having another market-related association), but those who do derive a large
benefit from them. Approximately 1/3 of villagers were members of the rice bank set up by
Redd Barna and, as explained by the villager Da Tmei (see Part IV above), membership wasvery helpful. Other villagers participate in health groups, fishermen groups, and receive loans
from commercial banks. Instead of attempting to rank the usefulness of each organization,villagers were given credit for involving themselves in any non-provas dei association.
In order to measure the usefulness and depth of the market associations, this dimension
focused on three particular avenues: frequency of association, bargaining behavior with traders,and how the market association group was founded (not including provas dei). If a group was
founded by local initiative (village leaders or community members), I interpreted this to besocial capital enabling villagers to act collectively to increase their livelihoods. I then find thathouseholds that interact with their association monthly or yearly, as opposed to daily or weekly,
have stronger, longer-standing, and more trusting connections. This sentiment was echoed
specifically by several villagers.
“There is a trader who comes in a truck each week and he buys from most people in the village.
Some people try to sell their products in the market themselves, but it is difficult. So they allsell to him for a low price. Me, I have a friend who comes each month to visit. When we sell tohim, he gives me better prices, so I often save most of my vegetables for him.” – Chea Soern,age 56
My observations indicate that villagers who have bargaining power, either because of thevolume they sell or the duration of the relationship with the trader, could often achieve higher
prices. Long-standing trader relationships, however, are typically marked by an absence of
bargaining. The producer trusts the trader to offer the market price and does not negotiate. If
the producer feels cheated, she can usually ask another family in the village with whom thetrader deals to confirm the price. Strong trading relationships, however, are rare. Most traders
are skilled hagglers and since they often have a monopoly on a certain product in a certain area,
they are able to drive the producer price down and have no incentive to cultivate relationships
with their customers.

29

“When the trader comes each week from Psar Leu, he tells me what he needs and the price.
Sometimes when the price goes down, I argue, but he says that is how the market works. One
time, the price was so low I did not believe him. So I asked the neighbors along this road andone person said that a shipment of tubers from Kompong Thom came in and the price went verylow.” – Kdup Sapeat, age 27
Although Kdup Sapeat trades with the same individual on a weekly basis, and generally trusts
his agent, it is clear that he has not established a strong personal tie with the trader. Milgrom etal. (1990) explain an alternative avenue by which Kdup Sapeat was able to overcome theweakness in his trader relationship:“...even if no pair of traders come together frequently, if each individual trades frequently
enough within the community of traders, then transferable reputations for honesty can serve as
an adequate bond for honest behavior if members of the trading community can be kept
informed about each other’s past behavior.”
In this case, the multilateral reputation mechanism, which is based on consistent interaction
between parties, was not strong enough to establish a trusting relationship between Kdup Sapeat
and his trader. However, after hearing that the trader spoke the truth, Kdup is now more likely
to lend his associate more trust. This would deepen the multilateral relationship and, in turn,
encourage deeper mutual trust (Platteau 1994a). Granovetter (1985) similarly points out that, inthe formation of trust, there is a significant role for concrete personal relationships (traderKdup) and networks (Kdup-neighbors). The cultivation of bilateral and multilateral reputation
mechanisms and relationships can be very effective in relaying information, regulating themarket, and encouraging meaningful interaction.
Market Depth - MID(Fi) and i
The first step in determining how embedded market interactions are in the social fabricof village is to measure how meaningfully a role business plays for the household. The “market
depth” dimension not only assesses how regularly market interactions occur and in what
context, but also how these interactions are perceived by the villagers. In particular, thefollowing elements were measured: (a) entrepreneurial spirit and risk-taking behavior, (b)business associates, (c) credit and credit reliability, and (d) market information sources. I willaddress each of these in turn.
Entrepreneurship is not a virtue of the villagers in Ch’rieu commune and, according to
the commune chief, it may not be for quite some time. Villagers who are bold, risk-taking, andexhibit some entrepreneurship usually sell their land and move to the towns. This phenomenon,
as the commune chief explained, hurts the village as a whole, because many of these individuals
held important positions in the village and were therefore models for others; they weremechanics, shopkeepers, agricultural product distributors, and so forth. Rarely does anothervillager take up the job of a departed businessman. To measure entrepreneurship, I examined
the responses to the question: “If you could work twice as hard, but make four times as much,
would you?” Only 29% responded affirmatively. When asked if they would invest in abusiness with a good chance (also explained as 95%) of providing return, only 67% said theywould invest. These two measures explain risk-taking and engagement in one’s business.

30

Many factors, all of which are positive, explain why certain household heads have morebusiness associates. If a villager cultivates many varied products or searches for the best saleprice from different sources, he or she is likely to require a larger trader network. If a villager is
not engaged in agriculture, he or she likely has more coworkers or clients than the average rice
farmer. The ability to garner market information from other humans, like business associates, isrelated to how extensive and useful one’s market network is.
Credit and investment sources are a commonly used source of information for measuring
embeddedness in the market, generally because this is a measurable and quantitative value. To
this end, I measured if loans were given, how much money was furnished, and whether the
respondent believes people trust one another in matters of lending and borrowing. Credit not
only provides an indirect type of insurance and creates investment capital, it creates anunderstanding of finance and potentially instills fiscal responsibility.
Social Capital, Market Interaction, and Wealthωi =α + χXi +γYi + β1SCD (Fi ) + β2C(SCDi | Fi ) + β3MID (Fi ) + εi
The primary goal of this study is to determine which avenues of social capital andmarket interaction lead to increases in wealth. The secondary goal is to further investigate howsocial capital (SC) and market interaction (MI, or social market capital) interrelate. We turn tothis secondary goal in the following section.
It is clear from our analysis of the ingredients of each dimension of SC and MI thatcertain personality traits, characteristics, and behavioral patterns can lead to higher wealth. A
family will be better off with knowledge of foreign language, membership in a health group,with strong family ties, and a solid credit/insurance structure. In order to see how these
individual elements relate to one another and to wealth as a whole, I aggregate them into
dimensions by means of factor analysis, except in the case of trust and collective action, which
are proxied directly (See Appendix 4). When equated with wealth using the expression above,these factored dimensions can provide a powerful representation of each contributor to thehousehold’s wealth.
Based on an OLS regression of the dimensions individually constructed in Part VI, I findthat some aspects of SC and all the aspects of MI directly contribute to the ability of ahousehold to increase its wealth (see Appendix 2 for results). The overall model predicts 55%of the variation in wealth. General trust is positively correlated with wealth (at the 5% level),13
as are communications and social groups and networks. These aspects directly facilitate ahousehold’s ability to increase its livelihood. Trust leads to lower transaction costs andsmoothes social interactions. Higher communication raises cooperation rate significantly, andparticularly so if it leads to increased contact with the market and facilitates promise-making,which is very likely, given the large investment required for communications increases(purchase of motorbike, cell phone, etc.) (Platteau 1994a, b). More social groups and networks
enhance the family’s insurance network and generally create community cohesion. Benefits ofpolicy aimed at dealing with these dimensions could influence many, such as the 90% of

13Significance at the 5% level, unless otherwise noted.
31

households who do not have a cellular phone, 69% who are not members of a non-monasteryassociation, 67% who have bad roads, and 46% who feel others are trustworthy.
An encouraging find for families without a significant endowment in terms of educationand occupation, is that family endowment is negatively associated with wealth. This does notdirectly imply that investment in education, finding a non-farm job, or learning a foreign
language are counterproductive. However, this does mean that these characteristics, whenviewed as a combined force, are not sufficient for a good livelihood. A farmer who cultivates
his land efficiently (especially if he has a considerable plot) can surpass in income aconstruction worker who is paid in foreign currency. A woman who provides traditional Khmer
massage in the village can earn more than the woman who sells fruit in the market or to tourists.
There are many pertinent examples of this outcome in the data. Furthermore, I believe that thevillage and perhaps Cambodia as a whole, is experiencing an “investment lag” in education.
The average age of the oldest child in every family is 18.6 and it is therefore unlikely that
schooling has helped a family to achieve higher wealth yet. Since anyone aged 22-30 was bornor lived as a child during the aftermath of the Pol Pot regime, when education was all but
eliminated, the majority of the children who are older than 19 years did not receive a proper
education from childhood. One villager reported the story of her son, who became impatientwith his studies and dropped out prematurely:“My eldest is very well educated but he has not done anything good for the family yet. He
studied in the secondary school and was a very good student. We were always very proud ofhim, even though we could not understand his work. But he did not finish. He met girls in
Siem Reap and did not come home many nights. And then he was offered a job as a chef in a
tourist restaurant, so he stopped attending the school. He made a mistake and then was fired.
He is now back at home helping on the farm.” - Bun Ri, age 48
The two dimensions of MI, market depth and market associations, are significantly andpositively correlated with wealth. Households that are involved in associations that reducetransaction costs, have helpful business associates, and exhibit entrepreneurial spirit and risktaking behavior are, unsurprisingly, more likely to attain higher wealth.
A few dimensions of social capital, including collective action, violence and crime, andidentity, did not significantly impact wealth. Violence and crime are at such low levels, thatthey do not meaningfully affect livelihoods. Past collective action (as it is weakly defined) does
not predict future mutually beneficial communal behavior. The insignificance of identity ispotentially due to the same factors as those causing the negative coefficient on family
endowment. Static factors describing the household, such family support, may assist a family to
get situated in a new location or new job, but are not predictable future (long-term) wealth. The
insignificant coefficient also suggests that non-family support networks are not effective in (orutilized for) providing insurance. This suggests that the limited-group morality, which
encourages mutual support within tight-knit groups, is still very dominant in the community.
Social Capital Meets Market Interaction

υi = b + γ υYi + β2υC(SCi I | Fi ) + β3υ MIi I (Fi ) + εi
32

“There is evidence all around us of the extent to which business relations
are mixed up with social ones.” - Granovetter (1985)
Markets are an embedded and integral part of social interactions in the villages ofKrosang and Veal and represent a piece of or contributor to social capital that has not been
properly studied in the field. At least 48% of households have some family members operatingin the same business as them, either as partners or other independent businesspersons in theirsame field. And at least 71% of household heads believe that the relationship they have withbusiness partners goes beyond the transactions themselves, extending into personal relations
and/or risk-sharing or income-security relationships. Platteau (1994a) highlights the basis uponwhich social market interaction is important:“It is undeniably true that in real-world market economies repeated contacts among transactors
or across organisational boundaries may be easily observed. Rather than consisting of singlepurpose, self-contained and short term arrangements, trading relationships may have a more
lasting character and be based on the personal involvement of the parties concerned.”
Villagers who have long-standing relationships with their traders can benefit from reliable
service, business credit, and information sharing. Villagers who can confirm prices with theirneighbors can assure fair trade prices. It is unavoidable that models attempting to explain social
capital and its effect on livelihood (specifically wealth) should control for or separate market
interactions from the body of social capital.
Since the market depth dimension is primarily concerned with social means of reducing
transaction costs, facilitating profitable business behavior, and establishing insurance/credit
networks, it is in this dimension that the intersection of market interaction and social capital canbe found. Through secondary socialization, which can follow from the creation of bilateral andmultilateral reputation mechanisms, market relationships can be forged with greater ease andcan contribute to an affirmation of one’s role as a market actor. This heightens the potential for
initial anonymous (based on a generalized morality) trade with non-village businessmen and thesubsequent deepening of personal relationship with business partners. Currently, it is efficientand rational for villagers to bring business associates inside the limited-group morality. Doing
this is unsustainable over time, because the limited-group network is constrained by size.
The point of convergence, where market and social life meet, as articulated in thismodel, lies specifically where social interaction and market depth meet. The equation above,
which highlights the direct influences of each component on efficiency and the indirect
influences on wealth, is the primary theoretical model for explaining this relationship.
The essence of this model lies in explaining the transition between a village-based
limited-group morality and a generalized morality. I do not suggest that the achievement of astrong generalized morality is ultimate goal or even optimum for this community. I believetransitory optimums dependent on national economic and social factors will emerge throughout
the development. Currently, we have a community, such Ch’rieu commune, which exhibits ahigh level of limited-group morality. Social and business interactions are restricted to“concrete” people, such as neighbors, inner-village clients, and village leaders, with whom one
closely identifies with (Platteau 1994b). Because villagers often share the same profession,
similar problems, and are all struggling to overcome impoverishment, their goals and33

understanding of the world are aligned with their fellow villagers. As a result, the community
exhibits high trust, people form and maintain relationships without much effort, and people feel
more overall empathy for other community members.
In an environment with a strong limited-group morality, bilateral relationships (amongkin) can become multilateral relationships (among friends and close acquaintances). The laborsharing system of provas dei was at one time sustained by reciprocal altruism, whereby villagers
provide labor in the present with the expectation of compensation sometime in the future.
Through continual adherence to this valuable system, provas dei became an informal institutionthat all rice farmers regularly take part in. Through repeated interaction, like that experienced
during the development of provas dei, bilateral relations can lead into the development ofmultilateral relationships. Strong multilateral ties, through higher incidence of unguardedsocialization (with persons one normally does not interact) and through network-introduced
relationships, facilitate the improvement (or enlargement) of one’s business network and leads
to secondary socialization. Individuals personally, or by playing the role of a market agent,
manufacture strategies aimed at cementing close personalized relations between transactors inorder to develop exchange links outside the network of the village or kinship circle. The
development of these relationships can, in turn, benefit the whole community. The security
afforded by a partnership with one personal would make it possible for a visitor to make contact
with other persons in the village and trade with them (Platteau 1994a).
The empirical results, as seen in Appendix 3, relate that social interaction of a specificnature is necessary to contribute to market depth. Remember that by establishing the avenues
by which efficiency gains are produced, we can determine what factors are working to makemarket interaction a critical component of the relationship between social capital and wealth.

υi = b + γ υYi + β2υC(SCi I | Fi ) + β3υ MIi I (Fi ) + εi
The factored value of the social interaction dimension, which was deconstructed above, is not
significantly associated with market depth (it is, however, unquestionably positively correlated).
However, a complementary variable, friendsshare (number of friends divided by number ofbusiness partners) is significantly and positively associated with market depth. The aggregatedsocial interaction dimension, which includes participation in election and information
campaigns, trips to the monastery, and news discussion, is likely too broadly defined toillustrate the precise avenues through which social interactions contribute to market depth.
Trust of shopkeepers is negatively correlated with market depth. This signifies that trust is notnecessary or particularly desirable in establishing a good business relationship. However, themore close associations one has, not necessarily business associates, positively contribute tomarket depth.
This suggests that there exists a form of generalized morality in the greater village social
network, but it is constrained by some factor, such as communication capability. Generalized
morality is a sense of trust in the abstract (people general) as opposed to the concrete (specificpeople). The existence of a generalized morality can facilitate the initial creation of business
relationships, because people are comfortable interacting with strangers, so long as a tolerated
level of risk is maintained. At this point in the development of Krosang and Veal, thisgeneralized morality is continually being undermined by the desire to integrate business
partners into the limited-group morality. Instead of remaining at a distance from a business34

partner, the relationship gravitates inward and results in a strong multilateral relationship. One
adopts the other’s viewpoint, exchanges non-market verbal promises, and extends a willingness
for social dependence rather than purely market dependence (Platteau 1994b). As I have shown,
this can be highly beneficial to both parties. The trader gains a consistent customer and,through the multilateral reputation mechanism of the limited-group, gains privileged access toothers in the villages. The villager gains a reliable and trustworthy partner, a model for businessbehavior, and potentially a source for credit and insurance. While these effects may be desirable
in the short-term, it is not clear if they are sustainable in the long-term. Platteau (1994a)
comments that generalized morality is critical for market operation and not even strong
institutions can replace it. It is generally accepted that most, if not all, developed economies aremarked by this type of generalized morality. Customers comfortably and ordinarily interact
with traders that they are not acquainted with (such as shopkeepers, car salesmen, etc.). In thecontext of semi-rural Siem Reap, it appears that generalized morality is constrained certain
country-wide problems, such as by the limited capacity for communication. Until the entire
region moves collectively toward generalized morality, it is rational and beneficial for Krosang
and Veal to remain within the safety net of the limited-group morality.

PART VII – CONCLUSION“The market is embedded in society rather than conversely.” - Bromley (1989)
Due in large part to the waves of monetarization that have hit the Cambodian
countryside in the past two decades and the increasing role of and influence of urban centers,
behaviors, norms, and values are adapting quickly to match the demands of the social
marketplace. Although there is a perceived decline in the amount of free social help available invillages, this seems to be no more than a characteristic of the transition between traditional andmodern social relations. Given its increasing role within the domain of social capital, market
interaction must be acknowledged as a form of socialization and therefore separated whenmodeling social capital. Formerly insulated societies exhibiting strict limited-group morality are
becoming more socially active and integrated in the marketplace. Higher incidence ofmultilateral relationships spurred on by the efficiency of limited-groups are encouraging
individuals to play their role as a market agent, thus slowly leading to the generalized moralitythat is typical of most modern societies. Based on the limitations of capacity forcommunication in Cambodia and the prevailing geopolitical trends, semi-rural Cambodianspresently benefit more from integrating their business relations into their social sphere.
Predictably, I find that depth of market interactions and membership in market associations are
positively related with wealth. Traditional measures of social capital, such as trusting behavior
and membership in voluntary groups also directly predict changes in livelihood. However,socialization, as controlled for trust of market agents and communications only contributes tohousehold livelihood insofar as it creates efficiency gains in the marketplace. These efficiency
gains can include reduced transaction costs, increased entrepreneurship, and larger insurance
and credit networks. Presently in Ch’rieu Commune, these gains are principally achievable
within the context of a limited-group morality, which is characterized by perfect or almost
perfect information transfer, network-wide support networks, and trust.
In order to climb toward generalized morality while continuing to extract the benefits oflimited-group morality, local leaders and indeed the villagers themselves, can forge further
35

mutually beneficial associations, however modest, and commit to collective action incentralizing and extending the overall communications capacity of the commune. Setting up
additional associations as formal as rice banks or as basic as a market-price information board,can encourage the villagers’ roles as market agents and encourage the utilization of the benefitsof the limited-group morality. Road maintenance, motorbike-lending groups, occasional field
trips to the marketplace and nearby villages contribute to the increase in communications. Thiscan reduce transaction costs, streamline information gathering, and provide an opportunity togain personal or business connections and learn new techniques. Practitioners and scholars, on
the other hand, should continue analyzing this overall model, but do so in the expanded context
of the entire social market. The perspective of the traders, transporters, creditors, and urban
shopkeepers who directly or indirectly interact with the commune should be included in thedomain of analysis in order to gain a comprehensive view of the flows of social capital and theireffects on market behavior.

36

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42

Appendix 1
Quality Evaluations
Outer Wall, Inner Wall, and Roofing Material
Poor Value
Salvaged material, Bamboo and Thatch, Straw, Plastic, None
Medium Value
Wood, Plywood, Iron and Aluminum, Fibro Cement (for roofs)
High Value
Fibro Cement (for outer walls), Concrete, Tile
Floor Material
Poor Value
Earth, Bamboo
Medium Value
Cement, Cheap wood (mostly ch’teal), Cambodian Tile
High Value
Expensive wood (mostly kakaw), Imported Tile
Occupation
Low-income
Farmer, Housewife, Unemployed, Handicap
Medium-income
Construction, Small business, Student, Monk, Fisherman, Carpenter, Chef
High-income
Hotel worker, Musician, Dancer, Government official, NGO worker, Truck driver

43

Appendix 2
Regression Results and Summary Statistics, Wealth Model (Stata 8.0)
Summary Statistics
Variable

Obs.

Mean

SD

Min

Max

WealthFamilyendowment
Communications
Identity
ViolencecrimeGroupsnetworks
GtrustDownwelfare
Dcommonproblem
Marketassocs
Marketdepth

48
48
48
48
48
48
48
48
48
48
48

7.76e-11
2.81e-09-4.19e-09
4.46e-10
1.04e-08-6.21e-10.4583333.7708333.6875
6.21e-09
2.34e-09.9598419.8513341.8251089.7046547.8969368.9612904.5035336.4247444.4684174.8610365.8875943-1.405663-1.378373-1.19037-.8970739-2.075305-.7002482
000-1.208242-1.168525

2.104787
1.684528
1.278463
1.387732.6752039
1.6961691
1
1.865388
1.626576

Wealth Regression Results
An OLS Estimate of the Determinants of Social Capital and Market Interaction on
WealthNumber of obs =Prob. > F=
R-squared=
Adj. R-squared =WealthFamilyendowment
Communications
Identity
ViolencecrimeGroupsnetworks
GtrustDownwelfare
Dcommonproblem
Marketassocs
Marketdepth
Constant

48
0.00000.65840.5661
Coef.

SE

z

P>|z|

[95% Conf. Interval]-.2699919.5215459-.1997077.0313069.3247957.5053539-.2845444.2279305.3727048.5173659-.1689864.1299896.1228271.1395488.113918.1019147.2046236.2451309.2070794.1150599.1178383.2636671

-2.08
4.25
-1.43
0.27
3.19
2.47
-1.16
1.10
3.24
4.39
-0.64

0.045
0.000
0.161
0.785
0.003
0.018
0.253
0.278
0.003
0.000
0.526

-.5333758.2726746-.4824603-.199513.1182968.0907471-.7812269-.1916522.1395712.2786028-.7032267-.006608.7704172.083045.2621268.5312946.9199607.212138.6475132.6058384.7561291.36525444

Regression Diagnostics
Correlation
gtrustgtrustdownwelfare
dcommonproblem
marketdepth
marketassocs
communications
identity
violencecrimegroupsnetworks
familyendowment

1.0000-0.1948-0.1015-0.0974
0.0413-0.1850
0.07930.34510.01320.1554dcommonproblem
marketassocs
identitygroupsnetworks
downwelfare
marketdepth
communications
violencecrimefamilyendowment
1.00000.16710.22330.04330.1180-0.0086-0.0244-0.1454-0.27421.00000.0672-0.1035-0.1258
0.0984-0.1109-0.0780-0.0989

1.00000.10190.23710.2438-0.0403-0.0605
0.15641.00000.02620.0396
0.09730.16660.28711.0000-0.0549-0.22700.05040.15301.00000.0979-0.0086-0.0833

1.00000.0577-0.0434

1.00000.27871.0000

Variance Inflation Factor
Variable

VIF

1/VIF(Tolerance)familyendowment
communications
identitygroupsnetworks
dcommonproblem
downwelfare
gtrustviolencecrimemarketassocs
marketdepth

1.44
1.21
1.14
1.13
1.11
1.27
1.25
1.23
1.15
1.29

0.694583
0.828191
0.879704
0.886253
0.904068
0.784674
0.801259
0.814765
0.866662
0.777569

Mean VIF

1.22

White’s Test for Heteroskedasticity
Test Statistic
P-value

48
.4321

45

Appendix 3
Regression Results, Efficiency Gain Model (Stata 8.0)
Summary Statistics
Variable

Obs

Mean

MarketdepthSocialinte~nFriendsshare
DtshopCommunications

48
48
48
48
48

2.34e-09
1.86e-09.7084352.1458333-4.19e-09

SD

Min

Max

.8875943.807682
1.072126.356674.8251089-1.168525-.8974658
00-1.19037

1.626576
1.526133
6
1
1.278463

Market Depth Regression Results
An OLS Estimate of the Determinants of Socialization Behavior and Communication onMarket Depth

Number of obs =Prob > F=
R-squared=
Adj R-squared =48
0.00690.27500.2076

Marketdepth

Coef.

Socialinteraction .2308862
Friendsshare.2540299
Dtshop-.5798873
Communications.2636486
Constant-.0953969

SD

z

P>|z|

[95% Conf. Interval].1459657.1097832.3241476.139865.1473227

1.58
2.31
-1.79
1.89
-0.65

0.121
0.026
0.081
0.066
0.521

-.0634817.0326311-1.233593-.0184161-.3925013.5252541.4754288.0738186.5457134.2017076

Regression Diagnostics
Correlationsocialinteraction
dtshopmarketdepth
friendssharecommunications
marketdepthsocialinteraction
friendssharedtshopcommunications

1.00000.24530.3571-0.2395
0.23711.00000.19530.0541-0.0495

1.0000-0.0447-0.0050

1.0000-0.0169

1.000046

Variance Inflation Factor
Variable

VIF

1/VIF(Tolerance)socialinteraction
friendssharedtshopcommunications

1.05
1.04
1.01
1.00

0.955650
0.958779
0.993695
0.997334

Mean VIF

1.02

White’s Test for Heteroskedasticity
Test statistic
P-value

6.885777.9079

47

Appendix 4
Factor Analysis Weights
WealthGroups and Networks
Livestock
RadioTV
Floorarea
Housepaint
Floorlow
FloorhighRooflow
Roofhigh
Owalllow
OwallhighIwalllow
IwallhighLatrineSharetoilet
Land_ag
Ag_land_dry
Ag_land_wet
WellshareMoto

0.021910.045630.01404
0.35630
0.06306-0.08189
0.04126-0.03581
0.20527-0.09060
0.05225-0.139780.03171
0.03927-0.02385
0.05715
0.04176-0.01036-0.01916
0.02292

Family Endowment
Fammembers
MaxeduMaxlang
Maxocculow
Maxoccuhigh0.17104
0.102080.23525-0.41579
0.27939

Social Interaction
Friends
Socialize
Election
Info
Wattrips
Socialnews
Newschatmuch

0.077810.127440.08859
0.04815-0.07918-0.01464
0.30099

Identity
Familyhelp
Wedding
DdifeduHardtime

0.20985-0.04608-0.35999
0.40933

WatsocOthersoc
Dfounded
Cashcontribution
Worksupply
Whyassoc
Communityeffect-0.009080.777020.09106
0.036120.057120.01229-0.10672

Violence and Crime
Dsafety
Dnightsafety
Nonviolcrime
Dcrimereport
Dcrimenoreport

0.72151-0.15706-0.05377
0.02345-0.13670

Communication
Badroads
Moto
Dcellular
DtvtimeDradiotime-0.07890
0.33432
0.21905-0.05843
0.46255

Market Associations
Othermsoc
MfoundGrpinteract
Grpbargainb

0.79333
0.08302-0.10435-0.03873

Market Depth
WorktwiceBusinessassocsnofam
Loandum
Buscredit
Goodchance
Loanamounta
Socialmarket
Credittrust

0.11933
0.026290.337430.02727
0.075780.51750
0.039480.07934

48