IDEAS home Printed from https://ideas.repec.org/p/ags/iaae24/344274.html

The Protective Role of Index Insurance in the Experience of Violent Conflict: Evidence from Ethiopia

Author

Listed:
  • Sakketa, Tekalign Gutu
  • Maggio, Dan
  • McPeak, John

Abstract

Droughts are among the leading causes of livestock mortality and conflict among pastoralist populations in East Africa. To foster climate resiliency in these populations, Index Based Livestock Insurance (IBLI) products have become popular. These products, which allow herders to hedge climate risk, often utilize remote-sensed data to trigger indemnity payouts, thus ameliorating moral hazard issues associated with standard insurance products. We study how one such program, implemented in southern Ethiopia, impacted the experience of violent conflict among participating households. Using a causal mediation analysis, we show first that there is a strong link between rangeland conditions and violent conflict; a one- unit decrease in a standardized version of the normalized difference vegetation index (zNDVI) in the previous season is associated with a 0.3-3 percentage point increase in the likelihood of conflict exposure. Within the mediation framework, we leverage a randomized encouragement experiment and show that insurance uptake reduces the conflict risk created by poor rangeland conditions by between 17 and 50 percent. Our results suggest that social protection programs, particularly index insurance programs, may act as a protective factor in areas with complex risk profiles, where households are exposed to both climatic and conflict risks, which themselves may interact.

Suggested Citation

  • Sakketa, Tekalign Gutu & Maggio, Dan & McPeak, John, 2024. "The Protective Role of Index Insurance in the Experience of Violent Conflict: Evidence from Ethiopia," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344274, International Association of Agricultural Economists (IAAE).
    • Handle: RePEc:ags:iaae24:344274
    DOI: 10.22004/ag.econ.344274
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/344274/files/20678.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.344274?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Eoin F. McGuirk & Nathan Nunn, 2020. "Transhumant Pastoralism, Climate Change and Conflict in Africa," ERSA Working Paper Series, Economic Research Southern Africa, vol. 0.
    2. Eoin F McGuirk & Nathan Nunn, 2025. "Transhumant Pastoralism, Climate Change, and Conflict in Africa," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(1), pages 404-441.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jedwab, Remi & Blankespoor, Brian & Masaki, Takaaki & Rodríguez-Castelán, Carlos, 2025. "Estimating the spillover economic effects of foreign conflict shocks: Evidence from Boko Haram," World Development, Elsevier, vol. 193(C).
    2. Claudia Custodio & Bernardo Mendes & Diogo Mendes, 2021. "Firm responses to violent conflicts," NOVAFRICA Working Paper Series wp2106, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    3. Sara Lowes & Etienne Le Rossignol, 2022. "Ancestral Livelihoods and Moral Universalism: Evidence from Transhumant Pastoralist Societies," Working Papers hal-04083412, HAL.
    4. Mathieu Couttenier & Sophie Hatte & Lucile Laugerette & Tommaso Sonno, 2025. "Dear Brothers and Sisters: Pope's Speeches and the Dynamics of Conflict in Africa," Working Papers hal-05029770, HAL.
    5. Emilio Depetris-Chauvin & Ömer Özak, 2023. "(De facto) Historical Ethnic Borders and Contemporary Conflict in Africa," Departmental Working Papers 2303, Southern Methodist University, Department of Economics.
    6. David Bilungule Bakamana, 2021. "Culture of war, instability and sustained contemporary conflicts across African states," Bussecon Review of Social Sciences (2687-2285), Bussecon International Academy, vol. 3(1), pages 28-35, January.
    7. Headey, Derek D. & Alderman, Harold & Hoddinott, John & Narayanan, Sudha, 2024. "The glass of milk half-empty? Dairy development and nutrition in low and middle income countries," Food Policy, Elsevier, vol. 122(C).
    8. McCarthy, Aine Seitz & Krause, Brooke, 2024. "Age and Agency: Evidence from a Women’s Empowerment Program in Tanzania," World Development, Elsevier, vol. 178(C).
    9. Mélanie Gittard, 2024. "Droughts, Migration and Population in Kenya," CIRED Working Papers halshs-04685409, HAL.
    10. Jean-Louis Combes & Pascale Combes Motel, 2022. "Que nous apprend la littérature récente sur la « nature et les causes de la richesse des nations » ?," Mondes en développement, De Boeck Université, vol. 0(3), pages 289-313.
    11. David Ubilava & Justin V. Hastings & Kadir Atalay, 2023. "Agricultural windfalls and the seasonality of political violence in Africa," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(5), pages 1309-1332, October.
    12. Depetris-Chauvin, Emilio & Özak, Ömer, 2024. "(De facto) historical ethnic borders and land tenure in Sub-Saharan Africa," Economics Letters, Elsevier, vol. 243(C).
    13. Paik, Christopher & Shahi, Keshar, 2023. "Ancient nomadic corridors and long-run development in the highlands of Asia," Explorations in Economic History, Elsevier, vol. 89(C).
    14. Lisa Murken & Gregor Mager & Rahel Laudien & Kati Kraehnert & Christoph Gornott, 2024. "The Impact of Weather Risk on Tenure Security: Evidence from Smallholder Farmers in Tanzania," Land Economics, University of Wisconsin Press, vol. 100(4), pages 668-689.
    15. Dominic Rohner, 2025. "Conflict," CESifo Working Paper Series 12035, CESifo.
    16. Hodler, Roland & Schaudt, Paul & Vesperoni, Alberto, 2023. "Mining for peace," CEPR Discussion Papers 17807, C.E.P.R. Discussion Papers.
    17. Pierre E. Biscaye, 2025. "Agricultural shocks and long-term conflict risk: Evidence from desert locust swarms," HiCN Working Papers 436, Households in Conflict Network.
    18. Remi Jedwab & Federico Haslop & Roman Zarate & Carlos Rodriguez-Castelan, 2023. "The Effects of Climate Change in the Poorest Countries: Evidence from the Permanent Shrinking of Lake Chad," Working Papers 2023-06, The George Washington University, Institute for International Economic Policy.
    19. Ubilava, David & Atalay, Kadir & Hastings, Justin V, 2021. "Commodity Price Shocks and the Seasonality of Conflict," Working Papers 2021-03, University of Sydney, School of Economics, revised Jul 2021.
    20. Khan,Amjad Muhammad & Rodella,Aude-Sophie, 2021. "A Hard Rain's a-Gonna Fall? : New Insights on Water Security and Fragility in the Sahel," Policy Research Working Paper Series 9805, The World Bank.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae24:344274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.