Thailand Social Monitor, January 2000

Social Capital and the Crisis
January 2000

  Download reports (223kb pdf)

Preface

This third issue of the Thailand Social Monitor studies a complex, but vital topic – the impact
of the crisis on social capital. Social capital is “the glue that holds society together”. It can
take many forms, from the family level up to national level institutions. Social capital is a
bulwark of Thailand’s social safety net: we need to know if existing forms of social capital
were adequate to cushion the blows of unemployment, lower wages and falling incomes that
have been the mark of this economic crisis, and whether the stock of social capital was
strengthened or weakened, augmented or eroded by the crisis.

Social capital has only recently been studied seriously by social scientists. It is therefore an
elusive concept, and difficult to measure, both the “stock” of social capital, in an economic
sense, and the “flow” of benefits from it, the “manifestations” of social capital. However, as
with financial, physical, environmental and human capital, there appears to be mounting
evidence of its importance to achieving sustainable development.

To analyze social capital during the crisis, needed is a framework and a set of accessible
indicators. Although some scholars would not include family cohesion within the definition
of social capital, in Thailand the family and its togetherness are at the heart of social capital
considerations. This issue of the Thailand Social Monitor assembles the available evidence
on social capital at the family and community level. The framework divides these indicators
into three categories: external and societal influences on social capital mobilization; the stock
of social capital mobilized at the family and community level; and finally the positive or
negative “manifestations” of the changing stock of social capital.

With a view to initiating a discussion on the important subject of social capital in Thailand,
teams from the four institutions listed below collected data on indicators such as suicide,
orphans, divorce, crime, family structure and many others. They analyzed the data to see if
each indicator improved during the crisis as compared to the previous years, declined during
the crisis, or remained relatively stable during the crisis. The “deviations” from the previous
period are important because such a change in 1998 can be expected to have at least some
relationship to the economic downturn and can show indirectly if social capital cushioned
crisis impacts.

Evidence of the ability of social capital to cushion the economic and social shocks posed by
the economic crisis are most important for social protection policy. For example, if
households cease providing gifts and remittances to one another, this could have a serious
impact on the income of a poor household. Or, if families break up during periods of
economic stress, such as through abandoning children, this will have long lasting impacts on
the children, who will be disadvantaged, and on the government, which will have to pay for
their care.

But when social capital remains intact and even increases, destructive outcomes may be
reduced or prevented. Community tensions may be held in check. Families stay together
and help one another survive the crisis, and communities form self help groups to cushion
hardships.

What happened to social capital mobilization during the crisis in Thailand? Did it increase
or erode? How well did it cushion the shocks? This issue of the Social Monitor shows a
mixed picture, both in terms of the stock of social capital and its manifestations. The findings
are summarized in Chapter 1. At the household level Thai families continued to protect their
essential expenditures on necessities, their children’s education, and basic health needs, and
to cut back on luxury expenditures. Most admirably, Thai families have continued to help
each other with cash gifts and remittances during the crisis, and Thai family structure did not
change off trend in the crisis. Communities have been drawn together and have created new
institutions and capacities to help themselves, particularly savings groups. There has been a
conspicuous absence of civil conflict in Thailand during the crisis, unlike the experience in
other Asian countries. The Thai Government has played a decisive role in supporting
community level mobilization.

But there are troubling signs that for some people the stock of social capital at the family and
community level declined during the crisis, that some manifestations of social capital also
deteriorated, and that overall, social capital (and government programs) could not cushion
the adverse economic impacts of the crisis on some individuals in Thai society. Crime, drug
use and arrests, suicides and child abandonment rose off trend in 1998.

Such negative outcomes during a severe economic crisis are hardly unique to Thailand, as
other developing countries in Europe and Latin America have also endured crisis-related
erosion in social capital, particularly property crime.

For Thailand, we cannot be sure if the crisis and its economic impacts are the primary
cause for these outcomes in 1998 and 1999, or if they are more a function of long term
societal changes in norms and values arising from urbanization, industrialization and
migration that have accompanied the years of growth in Thailand. However, we agree
that the most likely hypothesis is that the crisis imposed dire hardships on marginal,
vulnerable families, before Government or community programs could reach them, and
left these people with little choice but to take desperate steps. This hypothesis has
important implications for social protection policy in Thailand, if borne out by further
research. The protection of such marginal groups in future economic downturns—and a
better understanding of which groups escape the protection of existing social capital—
would be an urgent social priority. It is for this reason that UNICEF and the World Bank,
in collaboration with the Social Research Institute of Chulalongkorn University and the
Institute for Population and Social Research at Mahidol University embarked on this
analysis.

The list of people involved in preparing this issue of the Thailand Social Monitor is a long
one, including staff and consultants from the four institutions we together represent. They
worked very hard to pull together the data, analyze it, and interpret it. Many ministries of
the Thai Government assisted the team with data and ideas, including the Ministry of Interior
Department of Community Development, the Department of Public Welfare at the Ministry
of Labor and Social Welfare, several departments in the Ministry of Public Health, including
the Department of Medical Services, Division of Epidemiology, and the Health Intelligence
Unit, the Health Systems Research Institute, the Royal Thai Police, the National Statistics
Office as well as a number of private philanthropic organizations. Many Thai experts in and
out of Government reviewed this issue in draft, as did colleagues from the World Bank, andwe are grateful for their wise guidance. We especially would like to thank K. Paiboon
Wattanasiritham and K. Anek Nakabutra of the Social Investment Fund for their participation
and advice from the outset. Support from the Asia-Europe Meeting Trust Fund is gratefully
acknowledged.

We, the authors, of this issue of the Thailand Social Monitor, are alone responsible for any
errors in fact or judgement.