Despite overwhelming interest in the role of social capital in international development, attention to the interplay of community-based development aid with local collective-action dynamics in Central Asia and particularly Tajikistan has remained limited. This paper investigates donor-induced local institutions for collective action in rural Tajikistan with a focus on the introduction of a community-based health insurance. Social capital and collective-action theories are used to interpret results from qualitative research in two Rushan District villages in the Gorno-Badakhshan region. By highlighting the role of donor embeddedness, and the perceived legitimacy of different decision-making structures, the article contends that the perception of such externally-induced change depends on the community’s capacity to reach beyond the intra-communal solidarity network through bridging and linking capital. The findings suggest this can be fostered by addressing trust, and the role of effective development brokers, with due attention to power relations within communities and towards external agents.