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 3: The Risk Coping Strategies of the Rural Poor

Marcel Fafchamps

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


This chapter presents a conceptual summary of risk coping strategies, together with a review of the existing evidence regarding the respective roles they play in various circumstances. Before delving into the various strategies themselves, it is worthwhile discussing some of the terms and phrases that have been used in the literature and compare them with those used in this volume. Words are not important by themselves. What matters is that one be understood. To avoid confusion, a short glossary of terms used in the literature is provided below, together with my personal semantic preferences. First of all, many authors draw the distinction between ex ante and ex post strategies. The former are strategies that take place before a shock has occurred, while the latter take place after a shock has occurred. This chronological distinction is useful and we will use it throughout this volume with this specific meaning. But the distinction can be misleading. Many socalled ex post strategies, to be effective, require ex ante planning. For instance, sending firemen to extinguish a fire is an ex post strategy since it takes place after a fire has started. But it only works because a fire service is set up in the first place. A more useful distinction is between strategies that seek to reduce risk itself and strategies that seek to insulate welfare from risk – one could say, preventive and curative measures. Some authors use the terms ‘risk coping’ and ‘risk reduction’ strategies as synonymous of ex post...

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