Exploring the links between HIV/AIDS, social capital and development

Antonio David, World Bank Group
Carmen Li, University of Essex

This paper attempts to quantify the impact of the HIV/AIDS epidemic on social capital with cross-country data. Using data from the World Values Survey (WVS), we estimate reduced-form regressions of the main determinants of social capital controlling for HIV prevalence, institutional quality, social distance and economic indicators. The results indicate that HIV prevalence affects social capital negatively. The empirical estimates suggest that a one standard deviation increase in HIV prevalence will lead to at least one percent decline in trust, controlling for other determinants of social capital. If one moves from a country with a relatively low level of HIV prevalence such as Estonia to a country with a relative high level such as Uganda, one would observe over 11% points decline in social capital. These results are robust in a number of dimensions and highlight the empirical importance of an additional mechanism through which HIV/AIDS hinders the development process.