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.


Marcel Fafchamps

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


1. Many authors, for instance, implicitly assimilate risk coping to consumption smoothing (for example Cochrane 1991, Mace 1991, Townsend 1994, Morduch 2002). 2. A Muslim holiday. 3. Strictly speaking, one could argue that ritual and utility risks are one and the same. One’s inability to buy drugs for a sick child or to consume a sheep at Tabaski leads to a loss of welfare. Both thus induce people to incur certain expenditures to smooth their utility. Economists, however, have traditionally paid a lot of attention to utility risk, but, unlike anthropologists, they have largely ignored ritual risk. This legacy of neglect militates in favour of making the distinction. 4. For example Bardhan (1984), Reardon (1997), Foster and Rosenzweig (1996), and Foster and Rosenzweig (1993). There are some exceptions (such as Dutta et al. 1989, Schaffner 1995). 5. See, however, Hart (1988), Fafchamps (1996a), Fafchamps (1997), Bigsten et al. (2000), and Fafchamps et al. (2000) for evidence of contractual risk in urban areas. 6. This is hardly surprising given that many of the resettled people were weakened by malnutrition and that a cholera epidemic was rampant among them. It is estimated that, of the one million people forcibly relocated in the wake of the 1984 Ethiopian famine, between 50000 and 100 000 died within a year. 7. Irrigation dams and canals often increase the risk of malaria and other parasitic diseases. 8. See, for instance, Eddy (1979) and Comité Ad Hoc Chargé de l’Elaboration d’un Code Rural (1989) for evidence...

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