Better a Hundred Friends than a Hundred Rubles? Social Networks in Transition in the Krygyz Republic

June 06, 2002 // 12:00am

Kathleen Kuehnast and Nora Dudwick presented research from a World Bank-funded study that they directed, showing the importance of informal networks in the Kyrgyz Republic. Kuehnast explained that informal networks are systems of relationships through which goods, services, money and information are exchanged. During the socialist period, informal mechanisms played an important role in helping people satisfy needs that the state was not able to meet. Findings from their study reveal that widespread impoverishment of the population has contributed to the deterioration of social networks among the poor, especially in rural areas, although the non-poor have managed to expand and diversify their networks. The authors pointed out a number of policy implications that donor and financial institutions such as the World Bank should consider.

Kuehnast explained that informal networks remain integral to everyday life in the Kyrgyz Republic. Weak institutions combined with corruption have intensified the need to rely on personal networks. The size and frequency of social networks have drastically been reduced among the poorer members of society, for whom social networks function as an important safety net. In addition, social norms of elaborate gift giving have forced many to accrue large amounts of debt. Dudwick noted that blat' or "pull," combined with bribery are often essential for accessing public services or finding employment. Frequent borrowing and indebtedness are rupturing relationships among the poor, forcing many into patron-client relationships. Many transactions are very asymmetrical, with the poor often forced to pay back monetary loans in the form of labor.

Other factors such as unemployment and migration have further weakened workplace and neighborhood networks. According to Kuehnast, the "non-poor," or those above the poverty line, have adopted more individualistic values and are increasingly reluctant to help impoverished relatives. The erosion of social capital and reduction of trust have also undermined informal networks.

Both speakers offered several policy recommendations for international development institutions. Development projects must take into account the important role of hierarchical, often patron-client relationships, and address the important role of rural gatekeepers, including incentives for the non-poor to support the enhancement of opportunities for the poor. Development institutions should also support measures to strengthen government institutions, but should also pay attention to communications and transportation infrastructure, which would give the poor a greater possibility of maintaining their social networks. Finally, the speakers stressed the importance of projects that build upon indigenous traditions, such as savings clubs and traditions of mutual assistance.

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