The Network Effects of NGOs on Social Capital and Innovation of Smallholder Farmers. A Case Study in Peru

The impact of Non-Government Organizations (NGOs) on the local development of rural areas has rarely been explored empirically. Here we employ methods from network science to evaluate the impact of an NGO's activities on the social capital and innovation of three Peruvian farming communities between 2003 and 2018. Data was collected from in-depth interviews with farmers, including information about the farmers' socioeconomic characteristics, types of interactions with the NGO, and innovations in processes, products, marketing, and organization. Our findings show that the NGO had a significant impact on the local social cohesion and innovation performance of the farmers. The NGO helped to connect farmers from different villages, provided access to external knowledge, and facilitated the establishment of a local productive organization. Yet, the NGO also changed the local power structure by becoming the most central agent in the local innovation system. The NGO's centrality declined, though, at later stages of the development project as local agents took over the role of the NGO. Moreover, econometric results show that having a link with the NGO is associated with a significantly more central role of the farmers in the local network. However, only close cooperation with the NGO, such as membership in the local productive organization or active participation in technical training workshops was associated with a significantly higher innovation performance. Finally, our study demonstrates that methods from network science can help to empirically evaluate and monitor the effects of NGOs on local development at different stages of their development interventions