To Be or Not to Be a Member of a Grassroots Institution: Evidence from a Social Network Analysis in Rural Areas of Ghana

Abstract

Since the seminal work of Olson (1965), social interactions have become an increasingly influential component of economic reasoning. While not much was written on the topic in the immediate aftermath of publication, Olson’s basic reasoning lies at the root of the recent rapid expansion of social-network literature in economics. Brock and Durlauf (2001) and Manski (1993, 2000) survey a range of contexts in which social networks have been used to explain individual and aggregate outcomes in economics. In the case of developing countries, Mulangu (2014) points out that social networks are important catalysts—influencing the efficiency of exchanges; serving as insurance, especially in the realm of microfinance; and facilitating marketing and technology transfer in agrarian economies.