Linking Indigenous Social Capital to a Global Economy

The impact of Russian central government reform policies on rural villages shows both
the resilience of indigenous social capital and the ways in which social policies can limit its
development. At one level, there is compelling evidence that rural Russian households utilized
their personal helping networks in a very effective manner in order to survive the economic
dislocations of post-Soviet economic reforms. From 1991 to 1999, for example, the relative
proportion of agricultural output contributed by the large enterprises, the former state supported
collective and state farms, and household plots almost reversed each other. In 1991 large
enterprises made up 69 percent of production and households made up 31 percent. In 1999,
however, these large farms only contributed 38 percent of Russian agricultural production while
households contributed 60 percent. Officially registered private farms, the reformer's hope for
creating western style agriculture, only contributed a maximum of 3 percent in 1995, dropping to
2 percent in 1999.⁴⁰

Overall, rural households became much more self-sufficient during the post-Soviet
period. In 1989, for example, households gained slightly less than one-quarter of their income
through their own enterprises, largely through non-monetary consumption of food they
produced.⁴¹ By 1999, however, households were obtaining, on average, almost two-thirds of
their incomes by their own enterprises, including both household production and newer small
businesses, such as repair services, that were not available to them in the earlier period.⁴² These
gains were achieved by increased use of household labor and by the further development of
informal helping networks.⁴³

The dramatic "shock therapy" character of the reforms, however, also generated some
significant costs to bridging social capital in the Russian village. This is shown in Figure 1.

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