May 15 2009

(Hello all, I want to apologize for the large gap between entries. Between the business of having everybody here (which has made it hard to have time to write) and the cloudy days (which make the internet at a standstill, making it impossible to post), I have been unable to update the blog in a while. I will do my best to update everything in the next few days, but I want to reassure you that a lack of posts does not mean that anything is wrong, rather that Honduras has its way of preventing technological things from happening. In other news, we’ve finally got some more pictures! Alex took the time to compile a bunch of pictures and put up a picasa album at http://picasaweb.google.com/HonduranResearchTeam/WeReSafeAndHealthy#. If you want more, leave comments and we will do what we can to get them for you. Let us know what you want to see.)

We started orientation today. Everybody got up in time for a 7 am breakfast, which we washed down with a morning of talking. Spirits were high now that people were rested and got to see the compound for the first time.

We started off with a few rules that Alex laid down, focused on respect of Honduran culture, the compound we are in, and safety. Derek then talked for a while about some of the goals/motivation of the study. This may be a good time to try and explain a little better exactly what it is that we are doing here.

We are, in the most general sense, gathering information about this region. We have a goal of starting a microfinance organization here over the next couple of years, and this study will help to establish a knowledge of La Union and its residents. More precisely, we are using the information that we collect to look at social capital within these villages.

Capital is anything that has value and, while there are several types, a common one is physical capital—something that a person owns which allows them to improve their productivity. Social capital is one of the main types of capital, and is defined as the inherent value in relationships that we hold. A great example of this value is in professional networking. The best way to get a job is to know somebody that works at that company and who is willing to put in a good word for you. By helping you get a job, that relationship has helped you and therefore has value. If you know the CEO of a company, you are more likely to get the job than if you know the janitor, so different relationships have different value.

This is not the only manifestation of social capital, however. More related to microfinance, social capital also encompasses the idea that two groups, which seem similar from the outside, may accomplish completely different things. An example of this, which Derek will use as in introduction in his dissertation, would be the salt raids of Mahatma Gandhi. While many groups had made attempts to unify the nation, Gandhi and his followers were able to do this for the first time. This unification led to people, which may or may not have ever met or seen Gandhi, standing for his principles and fighting in the Indian independence movement. Was it that Gandhi was a great leader? Of course. However, more than just this, the structure of the society and the relationships created an environment which allowed success, where others had failed.

While this idea makes sense intuitively, it has been impossible to quantify until recently with the birth of network analysis. Network analysis forms connections between people within the network based on questions such as “who have you known the longest?” “Who do you respect in your community?” “Who is your best friend?”. These networks allow us to study, in a quantitative manner, social capital.

The survey which we will be giving people will establish many different relationships, based on friendship, trust, respect, and other factors to establish them. From these relationships, we will then be able to look at how these relationships, and therefore their networks and their social capital, affect how information travels and how it can influence people to do things as a group.

How is this relevant to La Union, you may ask? There are many, many applications of the principles studied, two of which include public health and microfinance. Public health is slightly easier to explain, so I will start with that.

As AIDS spreads in Africa, the amount of money continues to increase, and yet the number of occurrences of AIDS has still been rising. A large reason for this is due to a lack of knowledge of the disease and how it is contracted. There are many organizations attempting to disseminate this knowledge, using anything from billboards to professional soccer teams. However, these all rely on very impersonal, mass media type applications.

The ideal way to show somebody how AIDS spreads would be to sit everybody down in Africa, teach them, and continue to work with them until they realize the benefits of safer sexual habits. However, this is obviously not financially viable. If, instead, you took a small portion of the population and did this intense training with them, they would be very likely to adopt new behaviors, but there is nothing to say that anybody else would.

This is where social capital and network analysis come in. If, instead of choosing a handful of random people, you were to choose people who had a high likelihood of passing information on to a large number of people, you would have the potential to cause a large amount of change with a relatively small amount of money and time, giving a more effective way to combat AIDS.

This is actually a project which Derek has worked on in the past, and is planning to continue working on in the future. He spent a summer working in Johannesburg, South Africa, analyzing the networks of high schools there.

It is beyond the scope of this blog to explain everything about microcredit (much as it obviously was out of the scope to even begin to talk about the AIDS epidemic), but I would suggest reading Banker to the Poor by Mohammad Yunus or A Billion Bootstraps (although I don’t remember the author of this off the top of my head) for anyone interested in the subject.

The basic idea of microcredit is this: currently, loans are available based upon physical capital. It has been proven that they are an important part of a well-functioning economy (try to imagine living in a world in which you could not finance a car, house, or equipment for a business). However, the people who would benefit the most from loans, the world’s poor, are systematically excluded for the exact reason, they are poor and do not have any assets that can be seized in the case of loan default.

To give you an idea of what these loans would look like, a typical loan can range from $50 in India to $2,000 in the United States, with the amount varying mainly by country. These loans can be used for a variety of things, but are often for the acquisition of physical capital which allows borrowers to improve their productivity. This could be through purchasing an irrigation system to allow for year-round farming, a foot-powered sewing machine, farming equipment, a stove for a restaurant, inventory for a mechanic’s shop, or anything else. The actual idea for the use of the loan does not come from the organization, but rather the person applying for it.

Rather than being based upon physical capital like traditional loans, microcredit loans are often based upon social capital. Borrowers are put into reliability groups, in which every person in the group is jointly responsible for every loan of every other person in the group. If one person defaults on the loan, the entire group is disqualified from successive rounds of lending. Because of this, social capital plays a very large, yet very undefined role in microcredit.

Especially in rural areas, such as La Union, it would be expected that there would be a very high amount of social capital, since most of the villages were started by only a few families and are still small enough that most everybody in town knows each other. With this, loan repayments should be higher than in urban areas, but exactly the opposite has been seen. With estimates as high as 80% of the world’s poor living in rural areas, improvement of microfinance in these regions is essential to their development.

The information which we gather, in conjunction with data gathered as the microfinance organization is created and run, will allow us to improve the choosing of repayment groups (is it better to have a group of family members, close friends, complete strangers, or a mixture of these?), allocation of loans to women versus allocation to men, and how to improve the use of social capital in both rural and urban areas, amongst others.

I hope that you are still awake, and that I haven’t lost you from the blog after that longwinded explanation, but I feel that it is important that everyone reading this understands the underlying goals of what may otherwise appear to be a nice summer vacation. I generally prefer to ignore the boring details of the work for just that reason, they are kind of boring to report, but these are the main reason for which everyone has come here. That being said, I will return to the day.

Much of the morning was spent going through the information just presented, but in greater detail. We even made a human network (which I believe is seen in the picasa album). Following these explanations, we discussed what people should expect each day of the week to look like, and then broke into smaller groups and explained to each person what their specific role would be within the project.

In the afternoon, Kelley went over the procedure for the first day in each town, and then Bret gave a presentation about the survey program that we will be using while in the field. From there, we spent a good deal of time practicing the first day’s activities, and then took a short break before dinner.

After dinner, we had Boyd give a small talk about his experiences in La Union and what people should expect or hope to get out of this summer. Jake, AJ, and Helde then each talked for a few minutes about their perspective on La Union, safety recommendations, and any other thoughts they had. With this, we concluded a productive first day for everybody. Although it was a busy and highly informational day, people seemed to have enjoyed it. Most people headed for bed, while a few got out some guitars and did some playing. I checked some email and then worked my way towards bed, and here I am. So, until next time, adios.

Patrick