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Vulnerability: a micro perspective

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  • Stefan Dercon (QEH)

Abstract

High downside risk to income and livelihoods is part of life in developing countries. Climatic risks, economic fluctuations, and a large number of individual-specific shocks leave these households vulnerable to severe hardship. The paper explores the links between risk, vulnerability and poverty, taking a micro-level perspective. Risk does not just result in variability in living standards. There is increasing evidence that the lack of means to cope with risk and vulnerability is in itself a cause of persistent poverty and poverty traps. Risk results in strategies that avoid taking advantage of profitable but risky opportunities. Shocks destroy human, physical and social capital limiting opportunities further. The result is that risk is an important constraint on broad-based growth in living standards in many developing countries. It is a relatively ignored part when designing anti-poverty policies and efforts to attain the Millennium Development Goals. The paper discusses conceptual issues, the evidence and the policy implications.

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Paper provided by Queen Elizabeth House, University of Oxford in its series QEH Working Papers with number qehwps149.

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Handle: RePEc:qeh:qehwps:qehwps149

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Cited by:
  1. Aniceto C. Orbeta Jr., 2005. "Poverty, Vulnerability and Family Size : Evidence from the Philippines," Development Economics Working Papers 22671, East Asian Bureau of Economic Research.
  2. Lucia da Corta (QEH), . "The Political Economy of Agrarian Change: Dinosaur or Phoenix?," QEH Working Papers qehwps174, Queen Elizabeth House, University of Oxford.
  3. Patricia Justino & Philip Verwimp, 2008. "Poverty Dynamics, Violent Conflict and Convergence in Rwanda," Research Working Papers 4, MICROCON - A Micro Level Analysis of Violent Conflict.
  4. Benoît Lallau & Estelle Thibaut, 2009. "La résilience en débat : quel devenir pour les agriculteurs en difficulté ?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(1), pages 79-102.

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