Chapter 7: Conclusion
We now take stock of what we have learned about the relationship between risk, rural poverty, and economic development. We also make suggestions regarding future work and policy intervention. A special emphasis is put on identifying current gaps in knowledge and areas where empirical work is most needed to support or vindicate recent theoretical developments. 7.1 WHAT WE HAVE LEARNED We have learned that risk aﬀects the rural poor in numerous and profound ways. The magnitude and range of shocks that aﬀect rural populations of the Third World is without comparison in developed economies. Perhaps the only way to describe it to people who have never been there is to compare it to a war economy: death strikes at random a large proportion of the population, especially children; the provision of health services is either non-existent or insuﬃcient; trade with the rest of the world is diﬃcult so that many commodities are rationed or unavailable and local prices are erratic; food is at times very scarce; and steady wage employment is nonexistent so that people must make a living from self-employment in little jobs. To deal with such a harsh environment, people are equipped with very little in terms of advanced technology and accumulated assets. Financial institutions are either absent or ineﬃcient and expensive, and in many places, inﬂation is rife so that the cost of hoarding money is high. In response to these extremely diﬃcult conditions, rural societies have developed sophisticated ways...
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