Social Capital Formation in Global Value Chains: Evidence from Peru’s Alternative Development Program

Social capital is a rich topic in the development literature. Despite this, there is an incomplete understanding of how social capital is formed when placed within the enabling or constraining structure of Global Value Chains. While governance of Global Value Chains is well understood as a powerful force that shapes the participation of farmers, the literature to date has not effectively explored the extent to which governance may shape participation among farmers.

The aim of this thesis is to explore how, if at all, governance shapes the formation of two types of farmers' social capital: structural and cognitive.

Within the context of Peru's Alternative Development Program, where there is a purposeful effort to develop the social capital of farmers, qualitative research was conducted on two case study Global Value Chains: cacao and palm oil. Interviews were conducted with stakeholders across the Global Value Chain, from farmers and collective organisations to exporters and importers.

The case studies revealed that governance can be an enabler of structural social capital formation, but its role is shaped by the institutional context and existing attitudes towards social structure. Governance can be an enabler or barrier to cognitive social capital formation, depending on the nature of the governing relationship between buyer and supplier.

To date, the literature on social capital formation has typically focused on factors internal to a collective group. The findings in the thesis shed light on the role of exogenous structures on the formation of social capital.