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Food aid and informal insurance

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  • Stefan Dercon
  • Pramila Krishnan

Abstract

Households in developing countries use a variety of informal mechanisms to cope with risk, including mutual support and risk-sharing. These mechanisms cannot avoid that they remain vulnerable to shocks. Public programs in the form of food aid distribution and food-for-work programs are meant to protect vulnerable households from consumption and nutrition downturns by providing a safety net. In this paper we look into the extent to which food aid helps to smooth consumption by reducing the impact of negative shocks, taking into account informal risk-sharing arrangements. Using panel data from Ethiopia, we find that despite relatively poor targeting of the food aid, the programs contribute to better consumption outcomes, largely via intra-village risk sharing.

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Bibliographic Info

Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2003-01.

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Date of creation: 2003
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Handle: RePEc:csa:wpaper:2003-01

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Keywords: risk-sharing; informal insurance; safety nets; food aid;

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References

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Citations

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Cited by:
  1. Barrett, Christopher B. & McPeak, John G., 2003. "Poverty Traps and Safety Nets," Working Papers 127808, Cornell University, Department of Applied Economics and Management.
  2. Little, Peter D., 2008. "Food Aid Dependency in Northeastern Ethiopia: Myth or Reality?," World Development, Elsevier, vol. 36(5), pages 860-874, May.
  3. Andersson, Camilla & Mekonnen, Alemu & Stage, Jesper, 2011. "Impacts of the Productive Safety Net Program in Ethiopia on livestock and tree holdings of rural households," Journal of Development Economics, Elsevier, vol. 94(1), pages 119-126, January.
  4. Alem, Yonas & Broussard, Nzinga H., 2013. "Do Safety Nets Promote Technology Adoption? Panel data evidence from rural Ethiopia," Working Papers in Economics 556, University of Gothenburg, Department of Economics.
  5. Takashi Yamano & Harold Alderman & Luc Christiaensen, 2003. "Child growth, shocks, and food aid in rural Ethiopia," Policy Research Working Paper Series 3128, The World Bank.
  6. Lentz, Erin C. & Barrett, Christopher B., 2004. "Food Aid Targeting, Shocks And Private Transfers Among East African Pastoralists," 2004 Annual meeting, August 1-4, Denver, CO 20247, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Yoshito Takasaki, 2011. "How is disaster aid allocated within poor villages?," Tsukuba Economics Working Papers 2011-004, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  8. Macours, Karen & Premand, Patrick & Vakis, Renos, 2012. "Transfers, Diversification and Household Risk Strategies: Experimental evidence with lessons for climate change adaptation," CEPR Discussion Papers 8940, C.E.P.R. Discussion Papers.
  9. Philippe LeMay-Boucher, 2007. "Insurance for the Poor: The Case of Informal Insurance Groups in Benin," CERT Discussion Papers 0707, Centre for Economic Reform and Transformation, Heriot Watt University.
  10. Heemskerk, Marieke & Norton, Anastasia & de Dehn, Lise, 2004. "Does Public Welfare Crowd Out Informal Safety Nets? Ethnographic Evidence from Rural Latin America," World Development, Elsevier, vol. 32(6), pages 941-955, June.
  11. Gelan, Ayele Ulfata, 2007. "Does food aid have disincentive effects on local production? A general equilibrium perspective on food aid in Ethiopia," Food Policy, Elsevier, vol. 32(4), pages 436-458, August.
  12. Daniel Clarke & Sefan Dercon, 2009. "Insurance, Credit and Safety Nets for the Poor in a World of Risk," Working Papers 81, United Nations, Department of Economics and Social Affairs.
  13. Bet Caeyers & Stefan Dercon, 2008. "Political Connections and Social Networks in Targeted Transfer Programmes: Evidence from Rural Ethiopia," CSAE Working Paper Series 2008-33, Centre for the Study of African Economies, University of Oxford.
  14. Lam, Lai Ming & Paul, Saumik, 2013. "Displacement and Erosion of Informal Risk-Sharing: Evidence from Nepal," World Development, Elsevier, vol. 43(C), pages 42-55.
  15. Alix-Garcia, Jennifer & Bartlett, Anne & Saah, David, 2012. "Displaced Populations, Humanitarian Assistance and Hosts: A Framework for Analyzing Impacts on Semi-urban Households," World Development, Elsevier, vol. 40(2), pages 373-386.
  16. del Ninno, Carlo & Dorosh, Paul A. & Subbarao, Kalanidhi, 2007. "Food aid, domestic policy and food security: Contrasting experiences from South Asia and sub-Saharan Africa," Food Policy, Elsevier, vol. 32(4), pages 413-435, August.
  17. Alderman, Harold & Yemtsov, Ruslan, 2012. "Productive role of safety nets : background paper for the World Bank 2012-2022 social protection and labor strategy," Social Protection Discussion Papers 67609, The World Bank.

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