The Effect of Social Capital on Technology Adoption: Evidence from Rural Tanzania

Abstract:     
This paper develops and tests a model of technology adoption which predicts that the probability of adoption is increasing in household-level human capital and land endowments and village-level adoption patterns and social capital. The results of implementing the model with data from the plateau zone of Tanzania suggest that the probability of adoption of improved fertilizer is increasing in land endowments, the cumulative proportion of adopters, the presence of tribally-based social affiliations, and the village distance from a local market. When adoption patterns are omitted from the implementation of the model, it is shown that the probability of adoption remains increasing in land endowments and ethnic affiliations, and is also positively associated with consultative norms, the adoption of improved seeds, the availability of credit and extension services, and the average number of years that households have resided in the village. The results are robust with different sub-samples of the available data and after testing for multicollinearity, omitted variables, and simultaneity, where indices of ethnic fractionalization and land inequality are used as exogenous instruments. Overall, these results support the finding that tribally-based social affiliations act as a form of social capital in the adoption decision and provide an economic justification, during the design of extension programs, for investments in social assessments in order to analyze characteristics of local social structures.

Number of Pages in PDF File: 59

Keywords: Tanzania, Africa, social capital, technology

working papers series