Evaluating RD Policies for Social and Human Capital Development

In the EU, building social capital and developing human capital are increasingly seen as key to development in rural areas. Social capital is fundamentally about human interrelationships and networks. Evaluation of policy initiatives to promote social capital needs to go beyond indicators of conventional economic outcome measures such as jobs created and income generated and to encompass growth in the processes by which social capital works. Human capital in the form of education and skills possessed by individuals is linked with productivity and incomes. In the US, federal funding of human capital formation in support of rural entrepreneurship has been limited, fragmented and uncoordinated but activities in this area hold promise. The evaluation of entrepreneurial programmes needs to overcome many statistical problems such as selection bias regarding which firms received 'treatment' and how to identify causality. In particular there is a lack of indicators on the returns to investment in entrepreneurship. While the two case studies face their own sets of particular problems, they share the characteristic of a lack of data on relevant indicators that evaluators need in order to reach sound judgements. This points to the importance to evaluation of the design of the rural data system and scheme monitoring mechanisms.