A network analysis of the institutional network in Orania

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Abstract

Social networks are the key to disseminating information. For this reason, company director networks have been studied in various countries from the perspective of network theory, including the United States of America, the United Kingdom, Germany, France, Italy, Scandinavia and South Africa.

The present study examines the institutional network in the town of Orania in South Africa. Orania is a unique community founded in 1991 to serve as a growth point for Afrikaners and is currently a small partially independent Afrikaner community. Orania is built on three principles: own land, own labour and own institutions. The latter focus has resulted in Orania’s having set up its own schools and tertiary education, as well as its own chamber of commerce and its own bank, Orania Spaar- en Krediet Koöperatief (Orania Savings and Credit Cooperative). Although Orania is economically embedded in the rest of South Africa, Orania functions to a large extent apart from state institutions (for example, education) and also does not receive subsidies from the state for its municipality (the Orania Representative Council or OVR). As none of the South African banks has a branch in Orania, it could also be argued that Orania operates more independently of the main financial institutions of South Africa than is the case with other South African communities.

The current article studies a list of 36 institutions at Orania and their shared directors from the perspective of network theory. Unlike in other studies of company director networks, other institutions are incorporated in addition to companies’ board members, for example schools and churches. The reason is that economic activities in Orania are strongly embedded in the community: the Orania Growth Fund (Groeifonds), for example, provides an investment opportunity to shareholders and is therefore a financial institution, but funds are used to assist economic growth and community empowerment, and the growth fund therefore also fulfils a social function. Orania also invests in schools and tertiary education with a view to future economic growth, which inextricably links education institutions to the economy. It was also decided to include church councils in the analysis, because Orania considers its Christian character as part of its identity.

A multilevel network analysis was used to investigate the density (δ), average path length (L) and transitivity (C) of the network (macro-level), identify communities using modularity (Q) (meso-level) and the importance of individual institutions using degree, closeness and betweenness centrality as well as strength (micro-level). Unlike in many previous studies of corporate director networks, a weighted network is also studied to better highlight communities and the cohesion between institutions.

On a macro-level it is shown that Orania’s institutional network is significantly more closely connected (as measured by density δ) than is the case with the Johannesburg Stock Exchange, which indicates that information can spread significantly more easily in this network. This is, of course, to be expected, since Orania is a small community and its institutions are also embedded in the community, as opposed to the Johannesburg Stock Exchange which is not embedded within a closely connected community (South African society at large). The short average path (L) and high level of transitivity (C) of the institutional network in Orania also means that information can spread relatively easily within Orania.

At a meso-level, sub-communities are found to a lesser extent in the Orania institution network than is the case with the Johannesburg Stock Exchange, which indicates that the network is more closely linked, with less fragmentation. In fact, in some studies of other company director networks the entire network is not considered, but only the giant component, which is the part of the network where all nodes are connected. In the Orania institution network, the whole network is connected and there is no giant component, which further supports the interpretation that Orania’s institution network is a very closely connected network. Individual groups are also indicated and, for example, it is highlighted which churches link to specific schools.

On a micro-level it is shown that, unlike most studies of company director networks, the bank does not occupy a central position in Orania’s institutional network, but rather the Orania Representative Council (OVR) and institutions that are concerned with social development. The picture one gets from a micro-level analysis is that institutions that are involved in financial aspects hold central positions only if they are also socially oriented (for example, the Groeifonds and the Helpsaamfonds); otherwise financial institutions such as the Chamber of Commerce and bank occupy peripheral positions.

The question that arises from this analysis is whether this focus on social upliftment stimulates or inhibits economic growth, which is an issue that could be investigated in a future study. Future studies could also investigate whether communities such as Kleinfontein, Mnyameni or the Nama communities of the Richtersveld could be investigated in a similar way to explore basic community development.

Keywords: banking; complex networks; corporate director networks; Orania; SNA; social network analysis

 

Lees die volledige artikel in Afrikaans

’n Netwerkontleding van die instellingsnetwerk op Orania

 

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