Third Sector Institutions at the Local Level and their Impact on Human Development

Abstract In the paper, we analyse the relationship between third sector local institutions, which represent a component of social capital, and human development at the level of Slovak municipalities. In order to measure human development we use modified human development index, reflecting unemployment, level of education and gross mortality rate. We hypothesize that third sector institutions acting at the local level have a positive impact on human development. We utilize regression analysis in order to reveal this relationship, using cross-sectional data. Statistical results confirm our hypothesis. There is a positive and statistically significant relationship between the number of civic associations and the level of the human development index, even when filtering out other impacts, including self-government organizations per 1,000 inhabitants and net assets of the municipality per inhabitant. This result may be explained by the concept of social capital, meaning the network of interest-group relationships has a positive impact on providing services, governance and better access to less accessible forms of capital.