Financial Empowerment among Squatter Settlement in Tehran Essay Example

and substandard housing. These settlements primarily accommodate rural migrants and low-income groups. While Tehran's percentage of informal settlers is lower compared to other major cities such as Mexico City, Cairo, Manila, Dakar, etc., where 1/2nd to 2/3rd of the population resides in informal settlements, it still represents a substantial number. Currently, there are over one million individuals living as informal settlers in Tehran, accounting for more than 15% of the population. Projections from UN (2005) indicate that this number will increase to 2.5 million by the year 2021.

In Tehran, there has been a significant and irregular increase in the rural population over the past 27 years, with a growth rate of 7.5 percent. Despite living in extreme poverty and lacking basic life facilities, migrants have been attracted to the rural areas in and around Tehran, resulting in various social issues. These communities have a unique cultural structure and are vulnerable to crisis. Additionally, informal settlements have rapidly expanded throughout Iran in recent decades. Currently, these settlements are home to approximately 5 million people, which is about one eighth of the total urban population. If this trend continues, it is expected that this proportion will double within the next ten years. Furthermore, about three-quarters of these informal settlements are located on the outskirts of Iran's ten largest cities (UDRO, 2002).

Approximately 40% of the population growth in the Tehran Metropolitan Region (TMR) over the past two decades is attributed to informal settlements on the outskirts of Tehran. These squatter settlements have hindered development plans in developing countries, including TMR. These marginalized communities lack access to essential services, have subpar or unauthorized construction, suffer from overcrowding and high

population density, live in unsanitary conditions, and are located in hazardous areas.

Various measures have been implemented to address the issue of poverty in disadvantaged communities. Programs aimed at reducing poverty are being put into place, with a focus on empowerment as an effective approach. Empowerment plays a crucial role in providing essential opportunities for marginalized and underserved populations, whether it be through individual efforts or with assistance from those who have resources. The concept of social capital, which emerged in the 1980s and has been extensively studied in literature on social science and psychology, is also relevant to studies on poverty reduction and empowerment. Social capital offers a grassroots strategy for alleviating poverty, according to Woolcock (1998).

The significance of societal capital as the capital of the poor was emphasized by Woolcock and Narayan (2000). Poteete (2001) pointed out that community development efforts aim to achieve empowerment by building social capital, which refers to the social networks that facilitate collective action and promote accountability. Social capital can have several positive effects including:

1. facilitation of higher levels of, and growth in, gross domestic product (GDP);
2. facilitation of more efficient functioning of labor markets;
3. lower levels of crime;
4. improvements in the effectiveness of government institutions (Aldridge et al. 2002; Halpern 2001; Kawachi et Al. 1999b; Putnam et al. 1993).

Social capital also plays a crucial role in educational attainment (Aldridge et al. 2002; Israel et Al. 2001) and public health (Coulthard et al. 2001; Subramanian et

Al.

In 2003, social capital was identified as playing a crucial role in various aspects such as community administration, fiscal jobs, and production. It also has an impact on financial and business performance at both national and sub-national levels. Furthermore, Grootaert (2003) suggests that building social capital can help empower individuals and can be seen as a multilevel concept that is linked to poverty reduction strategies.

Development discussions have highlighted the significance of authority and social capital (Grootaert, 2003). Empowerment is a valuable tool that enables marginalized individuals to acquire resources and acknowledge their own experiences (Afshar and Alikhan, 1997; Albrecht et al., 1993; Rowlands, 1995, 1998). The World Bank (2002) defines empowerment as the overall enhancement of freedom in terms of choice and action.

Disadvantaged individuals lack voice and power in relation to the government and markets, severely limiting their freedom. Both men and women in these circumstances need resources and abilities to improve their well-being, security, and self-confidence. Financial assets are considered crucial for reducing poverty, while social capital helps empower individuals. However, this research specifically focuses on the dimensions of social capital (bonding, bridging, and linking) that can enhance empowerment among the marginalized population in Tehran, Iran.

Authorization

The World Bank defines empowerment as "the process of increasing the assets and capabilities of individuals or groups to make purposeful choices and to transform those choices into desired actions and outcomes."

``3 This definition illustrates that authorization is not simply a financial concept, but one that has significant political implications. The concept of individuals making their own "purposive choices" and perceiving those choices as realized outcomes is inherently political. It involves the influence that an empowered person

or community has over the institutions that affect individual and collective resources, including local government, national government, education, or even social institutions like marriage. Empowerment is mutually reinforcing for both the individual and the community, as an empowered person can positively influence a community while an empowered community makes individual-level empowerment more easily attainable. Therefore, empowering individuals often necessitates long-term processes of community empowerment and development to occur first (Cosgrove 2002). As this thesis will later argue, the structure of the community (or society) impacts the likelihood of an individual having a voice in decisions that affect their own and collective life, meaning it influences their level of empowerment.

The index of fiscal authorization, which is greater buying power, is important in enabling individuals to participate in various forms of associational life. This involvement is crucial for the development of management capacity and organizational freedom within groups and communities. Moreover, it allows active engagement in finding solutions and alternatives to poverty and clientelism (Chaves and Stoller 2002, 10).

Although empowerment can take various forms depending on the context, there are key aspects that remain consistent across different social contexts. The World Bank identifies access to information, inclusion and engagement, accountability, and local organizational capacity as these common elements of empowerment. These elements are accessible to individuals or groups when there are high levels of societal capital stock within a community. In essence, societal capital serves as an asset that provides these elements to those who possess it.

The main objective of this thesis is to show how the combination of microfinance initiatives and social capital can significantly increase opportunities for empowering individuals. The pursuit of empowerment has become

increasingly important due to previous unsustainable development patterns and the adverse effects of globalization. Globalization has negatively impacted the world's poorest individuals, leading to the erosion of traditional cultures, social alienation caused by increased migration in search of work, and environmental degradation commonly observed in impoverished areas. Empowering those living in poverty would enable both individuals and collective action to address these negative consequences, while also utilizing the benefits of globalization to bring about positive change. If participants in these programs can achieve empowerment, it is more likely that development and progress will be sustained. Essentially, "Empowered people have the freedom to make choices and take action," which would ultimately grant them greater influence over their lives and decisions that impact them.

``

Bonding, Bridging and Linking Social Capital

The concepts of bonding, bridging, and associating social capital have proven useful in describing the various aspects of societal identities and relationships at the community level. These concepts have been discussed by various researchers including Gittell and Vidal (1998), Putnam (2000), Grant (2001), Levitte (2003), Wakefield and Poland (2004). The terms bonding and bridging, initially introduced by Gittell and Vidal (1998), are similar in meaning to Granovetter's (1973; 1985) strong and weak ties and can also be seen as a more detailed specification of Woolcock's (1998) concept of integration. The term linking social capital likely originates from Woolcock's (1998) framework.

Discussions surrounding the concepts of bonding, bridging, and linking societal capital emphasize that each term serves different purposes and has its own advantages and disadvantages (Woolcock, 2001; Field, 2003; Halpern, 2005). Bonding social capital refers to strong, close

relationships between individuals who are familiar with each other, such as family members, close friends, neighbors, and members of primary groups (Gittel and Vidal, 1998; Woolcock and Narayan, 2000; World Bank, 2001; Wakefield and Poland, 2004). Bonding connects individuals who are similar in terms of socio-economic position and demographic characteristics; groups formed through bonding relationships exhibit a high level of homogeneity (Grootaert et al., 2004; World Bank, 2001; Putnam, 2002; Field, 2003).

Various functions of societal capital are recognized in the literature: the creative activity of shared identities and personal reputation, the development of local reciprocity and trust, and the provision of emotional intimacy, social support, and crisis assistance (Putnam, 2000; Murphy, 2002; Gittell and Vidal, 1998). These ties generate a strong sense of solidarity within the group structure, which can effectively mobilize individuals and resources towards a common goal (Narayan, 2001; Grant, 2001; Putnam, 2000). Adhering societal capital, such as family structures, is also seen as a foundation for establishing connections with other groups (Levitte, 2002; Halpern, 2005). Despite the numerous positive functions of adhering societal capital, discussions also acknowledge its potential negative aspects.

The negative aspects of social capital mentioned by Sublime portes and Landolt (1996) and Portes (1998), such as harm to individuals within the group, exclusion of foreigners, and other negative effects, are generally associated with strong social capital. The most extreme (anti-social) outcomes of social capital are attributed to excessive bonding, especially when there is a lack of bridging relationships.

In contrast, bridging societal capital refers to looser connections between people who may not be demographically similar, but have similar financial status and power (Putnam, 2000; Woolcock, 2001; World Bank, 2001). This concept

of bridging represents horizontal connections that extend across different social groups or communities (Woolcock, 2001). While binding societal capital is exclusive to outsiders, bridging ties are inclusive and transcend factors like ethnicity, caste, race, culture, and other social divisions (Narayan, 1999; Grant, 2001; Wakefield and Poland, 2004). Bridging relationships typically involve casual friends, colleagues at work, and members of secondary organizations (Woolcock, 2001; Putnam, 2000).

The concept of societal capital is represented by this indicator being open to different types of people, which is believed to demonstrate general trust (Murphy, 2002). Bridging societal capital brings together individuals who are not similar, leading to the establishment of broader identities and more general forms of reciprocity compared to binding relationships (Putnam, 2000; Field, 2003). The primary benefit of bridging ties is access to a larger pool of resources, information, and opportunities that are not available within the group (Gittell and Vidal, 1998; Putnam, 2000; Levitte, 2003). In contrast to binding societal capital, bridging is associated with positive outcomes and minimal potential for negative effects on others (Putnam, 2000; 2002; Field, 2003). Putnam describes binding societal capital as useful for "getting by," while bridging societal capital is crucial for "getting ahead" (2000; 23). According to Putnam, "getting ahead" means that groups and communities utilize their wider social relationships to achieve collective goals such as economic development.

Negative outwardnesss are unlikely due to the cross-cutting ties that exist (Putnam, 2000; 2002; Field, 2003). However, bridging societal capital may have limitations, such as a lack of resources in certain groups (Wakefield and Poland, 2004) or redundancy in resources within diverse groups of similar financial position and power. Another form of community-level societal

capital is the linking ties between authoritative individuals and groups (Woolcock, 2001; World Bank, 2001; Grootaert et al., 2004). While bonding and bridging represent horizontal relationships, linking societal capital represents the vertical dimension (Woolcock, 2001; Halpern, 2005).

Associating ties involve various entities such as civil society organizations (NGOs, voluntary groups), government agencies (service providers, the police), public representatives (elected politicians, political parties), and the private sector (banks, employers) (Grant, 2001; World Bank, 2001). This form of social capital is valuable because it provides increased access to valuable resources from formal institutions outside the community. These resources include financial and technical support, capacity-building initiatives, and better access to formal decision-making processes (Narayan, 2000; Woolcock, 2001; Levitte, 2003; World Bank, 2001; Field, 2003; Grootaert et al., 2004). Advocates of social capital like the World Bank argue that connecting relationships can represent power dynamics and resource distributions within society, not only between communities and the state but also between communities and non-state actors. They believe that connecting social capital is essential for the well-being and long-term development of disadvantaged and marginalized groups (World Bank, 2001; Woolcock, 2001; Halpern, 2005).

The literature generally equates the association of societal capital with positive outcomes for communities. However, there is debate about whether the societal capital construct adequately addresses issues of power and struggle. According to Fine (2001) and Harriss (2001), many accounts of societal capital overlook the historical-political context and accept existing power structures. Harriss (2001) also argues that the emphasis on cooperation and preference for associational life in societal capital literature, as seen in Putnam's conceptualization, obscures the potential roles that political action and struggle can play in societal change. I believe

that the societal capital model does not preclude consideration of power and resource dynamics; the concept of associating societal capital can be used to explain both asymmetries and sharing of power and resources. Different combinations of the three types of community-level societal capital are believed to produce a range of outcomes, which aligns with Woolcock's (1998) integrated model that discusses micro- and macro-forms of societal capital.

The text emphasizes that having more community-level societal capital is not necessarily better. Relying too much on either bonding or bridging can be detrimental because it only benefits one type of societal capital at the expense of the other (Halpern, 2005). Similar to Woolcock's model, the conceptualization of community-level societal capital is dynamic rather than static. The optimal combination of bonding, bridging, and associating societal capital can change over time as the community's needs and priorities evolve or as the macro-environment itself changes (Woolcock, 1998; 2001).

Theoretical model

Based on the World Bank approach, empowerment involves two main dimensions: agency and opportunity structure. Agency refers to an individual or group's ability to make purposeful choices, meaning they have the capacity to imagine and intentionally select alternatives.

Even when individuals have the ability to make choices, they may not be able to use that ability effectively. They are limited by their chance structure, which refers to the aspects of the institutional context within which actors operate that affect their ability to convert their choices into actions. By establishing the "rules of the game" for the exercise of choice, institutional contexts determine, to varying degrees, the effectiveness of choice. Additionally, these rules can also impact the accumulation of resources and determine the value

of benefits derived from these resources. These factors collectively contribute to different levels of authority and are believed to have mutually reinforcing effects on development outcomes. Figure 2.1 depicts how choice and chance structure relate to the level of authority that an individual or group experiences.

This text suggests a connection between authorization and development outcomes. The table shows that authorization can be evaluated in various aspects of someone's life (state, market, society) and at different levels (macro, intermediary, and local). Each aspect can be subdivided into sub-domains, indicating where and in what areas of their lives individuals are empowered. At the intersection of these aspects and levels, individuals can experience different levels of authorization, addressing the question of whether and to what extent they are empowered. Two sets of interconnected factors influence the different levels of authorization that an individual or group experiences: the agency of the actor and the opportunity structure within which that actor operates.

• Analysis of bureau and chance construction helps clarify why an histrion is empowered to one grade or another.

• The ME model has been used to develop empowerment indexs for two to six spheres and for one to three degrees.

• Agency is defined as an histrion 's or group 's ability to make purposeful picks - that is, the histrion is able to imagine and purposively choose options.

• In terms of both measuring of and action to enhance authorization, a person or group's agency can be largely predicted by their asset endowment.

Assets are the stocks of resources that enable individuals to utilize financial, social, and political opportunities, to be productive, and to protect themselves from shocks (Moser 1998; Swift 1989). According to William J (2008), financial empowerment is the capacity or ability to understand, improve, and gain control over one's financial situation.

Measurement

Financial Assets

According to Gergis (1999), more generally, financial empowerment strategies include six main categories:

1. Fiscal intervention to assist local business activities (increased access to credit);
2. Enterprise development for citizens (increased access to skills, business and management training, and improved production technologies);
3. Marketing strategies for locally produced goods and services (increased access to markets);
4. Bargaining strategies (for higher wages, better working conditions, etc.) for citizen employees;
5. Job creation (promotion of labor-intensive projects); and
6. Training and Education that is responsive to skill demands in the economy.

To design a financial empowerment strategy, it is necessary to first identify the individuals or groups that need to be empowered and then understand the source of their disempowerment (Gergis, 1999).According to Moyle, Dollard, and Narayan (2006), fiscal authorization is the process of generating revenue and promoting independent decision-making in spending among members of a group (Centre for Social Research n.d.).

Fiscal authorization takes into consideration the fiscal strength of an individual or group. It is widely believed that fiscal strength forms the basis of power in society, encompassing societal, political, and psychological aspects (Mayoux 2000). According to Alsop and Heinsohn (2005), fiscal authorization consists of six dimensions.

Bonding, Bridging and Linking Social Capital

According to a conceptual framework of societal capital at the family and individual level, specific dimensions of societal capital are selected to measure bonding societal capital

including Trust and Solidarity, Collective Action and Cooperation, Information and Communication, Social Cohesion and Inclusion, Empowerment and Political Action. This framework aims to explain the close relationship between respondents and their families and friends, emphasizing connections to people who are similar to them. Additionally, bridging societal capital is measured by dimensions that assess the relationship between respondents and their coworkers, neighbors, and people in society who are different from them in some demographic sense. Lastly, the measurement of linking societal capital focuses on the relationship between the respondent and cultural groups, governmental organizations, and NGOs. It pertains to connections with individuals in positions of power, whether politically or financially influential.

Research Question

The research question is: Which dimensions of societal capital (Bonding, Bridging, and Linking) can improve the fiscal assets among chunky colony in Tehran, Iran?

Aim

The aim is to identify the relationship between societal capital dimensions (Bonding, Bridging, and associating) and fiscal empowerment assets.

Hypothesis

The hypotheses are as follows:

1. By increasing the level of bonding societal capital, there will be a significant increase in fiscal empowerment among chunky colony.
2. By increasing the level of bridging societal capital, there will be a significant increase in fiscal empowerment among chunky colony.
3. By increasing the level of associating societal capital, there will be a significant increase in fiscal empowerment among chunky colony.

Sample and Data Collection

This study utilized a quantitative approach. Data collection involved conducting interviews with homesteader colonies through a questionnaire.

All homesteaders in Tehran were included in the sample and divided into two groups: old homesteaders and new homesteaders.

Within each group, one homesteader was chosen at random. A total of 368 questionnaires were administered to two groups of homesteaders. Around 320 questionnaires were deemed usable, as some respondents failed to answer certain questions. The data was collected using a systematic sampling method. The survey sample consists of individuals from homesteader colonies in Tehran, Iran, residing in the Bagh-e-Azari community (old homesteaders) and the Eslam Abad community (new homesteaders).

In addition, 328 individuals were selected based on Cochran's (1977) correction formula, using a random sampling technique to choose respondents between 25 and 75 years old.

Statistical Analysis

To analyze the relationship between societal capital dimensions (binding, bridging, and associating societal capital) and financial assets, various statistical measures were employed. Firstly, the Pearson R correlation coefficient was used to assess the relationship. The objective was to determine the relationship between the mentioned societal capital dimensions and fiscal assets. Additionally, a regression analysis was conducted to examine the relationship between bonding, bridging, associating societal capital, and financial assets. The results showed that there was a Pearson correlation between binding societal capital (M=19.61, SD=8.86), bridging societal capital (M=18.26, SD=9.29), and no correlation between associating societal capital (M=14.10, SD=4.72) with financial assets (M=24.23, SD=8.44).

The research findings show that both adhering societal capital and bridging societal capital have a positive relationship with fiscal assets among chunky colony. These findings align with the conclusions drawn by Putnam (2000, 2001), Henly et al. (2005), Woolcock (2005), Harknett (2006), Portes (1998), Coleman (1988), Philippines (2006), Mayoux (2001), and Malena and Heinrich (2005). Additionally, some studies demonstrate that

adhering, bridging, and associating societal capital enhance empowerment, but adhering societal capital exhibits a particularly strong positive relationship with bridging and associating societal capital among poor individuals (Putnam 2000, 2001; Henly et al. 2005; Woolcock 2005, 2004; Harknett 2006; Portes 1998; Coleman 1988; Philippines 2006; Gewirtz et al. 2005; Lin 2001). Much of Lin's (2001) research on societal capital focuses on social ties, with the strength of these ties being a crucial factor in the successful acquisition of societal capital.

The distinction between strong ties and weak ties remains. Despite the common assumption that strong ties provide access to resources, the opposite is often true. Strength, according to Granovetter (1973), is a combination of time spent together, emotional closeness, familiarity, and the exchange of services. Strong ties foster the development of social capital within one's own social circle, formed through relationships within homogeneous groups. To access additional resources, one must establish connections with other groups to cultivate bridging social capital.

This span originates from a less strong connection, but often provides the social capital to expand one's horizons. The same can be said regarding the relationship between individuals and networks, which generates connecting social capital. The typical response is that having a connection with a larger system would result in greater advantages, thus considering it stronger. However, this is not true.

The relationships between individuals and systems are not as strong as relationships between individuals and family members, but it is the weaker ties that provide more opportunities. According to Alagheband (2005), some sociologists and scholars believed that Iran needed more bridging and linking social capital, in addition to bonding social capital. This is because there is a

need for strengthened relations between individuals with organizations and the government. Furthermore, he argues that Iran's social capital is visible in the form of their religious practices. Additionally, these findings align with past researches, such as Alagheband (2005), who argue that poor people in Iran have very limited social relationships due to their low social status and class, resulting in less bridging and linking social capital.

Finding

The findings indicate that only bonding social capital has a positive relationship with financial assets, while bridging and linking social capital have no relationship with financial assets.

Furthermore, the positive relationship between adhering, bridging, and associating societal capital and psychological assets is consistent with the conclusions of Woolcock and Narayan (2000), World Bank (2000), Harknett (2006), Portes (1998), and Cramb (2006). According to Woolcock and Narayan (2000) and World Bank (2000), societal capital enables impoverished individuals to improve their access to resources and financial opportunities, obtain essential services, and participate in local governance. As noted by Harknett (2006), "societal capital and networks play an important role in providing financial and in-kind support to"