Rural Poverty, Risk and Development

Rural Poverty, Risk and Development

Marcel Fafchamps

This book investigates the relationships between rural poverty, risk, and development. Building upon the author’s work in the area, it summarises the contributions of recent theoretical and empirical work to our understanding of how risk affects rural poverty levels in developing countries. In particular the book examines what we do and do not know about risk coping strategies among today’s poor rural societies. Ways in which these strategies may be re-examined and improved by governments and international organisations are proposed.

Chapter 1: Introduction

Marcel Fafchamps

Subjects: development studies, development economics, economics and finance, development economics

Extract

This book investigates the relationships between rural poverty, risk, and development. Building upon the author’s work in the area, it summarizes the contributions of recent theoretical and empirical work to our understanding of rural poverty and risk in developing countries. Over their lifetime, all men and women are subject to risk. Some external shocks affect their well being in the most direct manner: illness, accident, death. Other shocks affect their ability to support and feed themselves, either temporarily – unemployment, crop failure, loss of property – or permanently – disability, skill obsolescence. The purpose of this book is to summarize what we know and do not know about the sources of risk faced by the rural poor and the coping strategies they have developed to deal with shocks. We also examine how risk and risk coping strategies impact the rural poor’s capacity to develop. So doing, a better handle can be gained on how governments and international organizations can assist the rural poor to better deal with risk and overcome their poverty. The book starts in Chapter Two with a brief overview of the issues surrounding poverty and risk in underdeveloped rural areas. Not only is risk higher in poor rural economies, but poor people are also less able to deal with risk. Apart from localized efforts, they are largely left to their own devices as far as socialized care is concerned. Low assets also make it difficult to absorb shocks. Poverty is thus not only associated with higher...