Social capital and its impact on poverty reduction: Rural-agriculture and urban-multisector underprivileged communities

BACKGROUND AND OBJECTIVES: Poverty remains a critical issue in many regions of Indonesia, requiring comprehensive solutions. Social capital, a critical non-economic factor, emerged as an essential tool in empowering communities to reduce poverty. This study aims to explore the social capital among underprivileged households in Enrekang Regency and offers practical models to enhance poverty alleviation.METHODS: Data were collected through a structured questionnaire and in-depth interviews with 140 heads of underprivileged households in Enrekang Regency, Indonesia, covering both rural-agricultural and urban-multi-sector areas. The data were analyzed using a nonparametric analysis method, while the significance of social capital was assessed using the Mann-Whitney test. The social capital variables investigated in this research included trust, groups and networks, norms, information and communication, cohesiveness, and reciprocity.FINDINGS: The findings revealed that social capital tended to be stronger in rural-agricultural areas than urban-multisector regions. Factors such as homogeneity, kinship, local institutions, and traditional values were foundational elements of social capital. Social capital is primarily utilized to fulfill basic survival needs rather than to pursue profit maximization. Practices such as mutual assistance during farming activities (e.g., fertilization, planting, pest control), the sharing of harvests for collective consumption, and local kiosks providing loan mechanisms demonstrate the vital role of social capital in sustaining daily life. Predominantly, the social capital identified in these communities is bonding social capital (internal solidarity), with limited progression towards bridging social capital, which could better connect various resources within and beyond the community.CONCLUSION: In conclusion, the strategy for leveraging social capital in poverty alleviation in Enrekang was developed through two models: (a) the rural-agriculture model and (b) the urban-multisector model. Both models emphasized strengthening ties among families, neighborhoods, and community groups. These relationships were optimized to shift from bonding to bridging social capital, enhancing the overall effectiveness of poverty alleviation initiatives.