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Shocks, Livestock Asset Dynamics, and Social Capital in Ethiopia

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Author Info
Tewodaj Mogues (International Food Policy Research Institute)

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Abstract

This paper uses household survey panel data of 416 rural households to study livestock asset dynamics in the north-east of Ethiopia. The period under examination (1996-2003) was marked by severe environmental shocks, including a series of droughts. Using as point of departure the literature on the evolution of productive assets in the presence of risk, which relates asset paths to initial endowments, we test the hypothesis of wealth divergence and the existence of asset poverty traps. Results indicate rather that livestock asset dynamics are marked by convergence over time. Examining the role of social capital in recovery and growth of households’ endowments, both local social relationships as well as ‘bridging’ social capital seem to have a positive effect on asset holdings directly, as well as indirectly by mitigating the impact of income shocks on livestock capital.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0512006.

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Length: 48 pages
Date of creation: 09 Dec 2005
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Handle: RePEc:wpa:wuwpdc:0512006

Note: Type of Document - pdf; pages: 48
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Web page: http://129.3.20.41

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Keywords: Ethiopia Social capital Shocks Livestock assets Dynamic analysis

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O - Economic Development, Technological Change, and Growth
P - Economic Systems

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April. [Downloadable!] (restricted)
    Other versions:
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
  3. Carter, Michael R, 1997. "Environment, Technology, and the Social Articulation of Risk in West African Agriculture," Economic Development and Cultural Change, University of Chicago Press, vol. 45(3), pages 557-90, April.
  4. Fafchamps, Marcel & Minten, Bart, 1998. "Relationships and traders in Madagascar," MTID discussion papers 24, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February. [Downloadable!] (restricted)
  6. Carter, Michael R. & Zimmerman, Frederick J., 2000. "The dynamic cost and persistence of asset inequality in an agrarian economy," Journal of Development Economics, Elsevier, vol. 63(2), pages 265-302, December. [Downloadable!] (restricted)
  7. Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August. [Downloadable!] (restricted)
  8. Rosenzweig, Mark R, 1988. "Risk, Implicit Contracts and the Family in Rural Areas of Low-income Countries," Economic Journal, Royal Economic Society, vol. 98(393), pages 1148-70, December. [Downloadable!] (restricted)
  9. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(2), pages 178-199, February. [Downloadable!] (restricted)
  10. Carter, Michael R. & May, Julian, 1999. "Poverty, livelihood and class in rural South Africa," World Development, Elsevier, vol. 27(1), pages 1-20, January. [Downloadable!] (restricted)
  11. Carter, Michael R. & Maluccio, John A., 2003. "Social Capital and Coping with Economic Shocks: An Analysis of Stunting of South African Children," World Development, Elsevier, vol. 31(7), pages 1147-1163, July. [Downloadable!] (restricted)
  12. Rosenzweig, Mark R & Wolpin, Kenneth I, 1993. "Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investment in Bullocks in India," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 223-44, April. [Downloadable!] (restricted)
  13. Michael Carter & Peter Little & Tewodaj Mogues & Workneh Negatu, 2005. "Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras," Development and Comp Systems 0511029, EconWPA. [Downloadable!]
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  14. Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, Oxford University Press, vol. 4(3), pages 351-66, September.
  15. Travis J. Lybbert & Christopher B. Barrett & Solomon Desta & D. Layne Coppock, 2004. "Stochastic wealth dynamics and risk management among a poor population," Economic Journal, Royal Economic Society, vol. 114(498), pages 750-777, October. [Downloadable!] (restricted)
  16. Fafchamps, Marcel, 1992. "Solidarity Networks in Preindustrial Societies: Rational Peasants with a Moral Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 147-74, October.
  17. Tewodaj Mogues & Michael Carter, 2005. "Social capital and the reproduction of economic inequality in polarized societies," Journal of Economic Inequality, Springer, vol. 3(3), pages 193-219, December. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stefan Dercon (QEH), Joachim De Weerdt, Tessa Bold, Alula Pankhurst, . "Membership Based Indigenous Insurance Associationsin Ethiopia and Tanzania," QEH Working Papers qehwps126, Queen Elizabeth House, University of Oxford. [Downloadable!]
  2. You, Liangzhi & Diao, Xinshen, 2006. "Assessing potential impact of avian influenza on poultry in West Africa: a spatial equilibrium model analysis," DSGD discussion papers 40, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Carter, Michael R. & Little, Peter D. & Mogues, Tewodaj & Negatu, Workneh, 2006. "Shocks, sensitivity and resilience: tracking the economic impacts of environmental disaster on assets in Ethiopia and Honduras," DSGD discussion papers 32, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Badiane, Ousmane, 2006. "Agricultural trade liberalization under Doha: the risks facing African countries," DSGD discussion papers 39, International Food Policy Research Institute (IFPRI). [Downloadable!]
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