Abstract

that inhabit a particular region since the determinants of welfare are highly varied. For rural development, who produces in agriculture matters for efficiency and welfare, for instance small holders as opposed to large commercial farmers. Where agricultural production takes place also matters, for instance in better endowed versus marginal areas. What non-farm sources of income exist in particular regions and which particular classes of households are able to participate to those is important for the determination of household incomes. How households aggregate in communities and the level of social capital they contain explains the efficiency of rural institutions and the ability to cooperate in the provision of public goods and the appropriation of common pool resources. And how sizable are the local linkages between farm and non-farm activities, particularly the multiplier effects created by the expenditure of farm incomes, matters for the creation of non-farm incomes that suppleme

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