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Assets, Shocks, and Poverty Traps in Rural Mozambique

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  • Lena Giesbert
  • Kati Schindler

Abstract

Using a micro-level approach to poverty traps, this paper explores welfare dynamics among households in post-war rural Mozambique. Conceptually, the paper builds on an asset-based approach to poverty and tests empirically, with household panel data, for the existence of a poverty trap. Findings indicate that there is little differentiation in productive asset endowments over time and that rural households gravitate towards a single equilibrium, which is at a surprisingly low level. The analysis shows that shocks and household coping behavior help to explain the observed poverty dynamics. The single low-level equilibrium points to an overall development trap in the rural farm-based economy. This is attributed to the long-term impact of the civil war, which has consolidated unfavorable economic conditions in rural areas and limited new economic opportunities outside of the agricultural sector.

Suggested Citation

  • Lena Giesbert & Kati Schindler, 2010. "Assets, Shocks, and Poverty Traps in Rural Mozambique," Discussion Papers of DIW Berlin 1073, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1073
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    1. repec:taf:jdevst:v:52:y:2016:i:3:p:377-395 is not listed on IDEAS
    2. Kurosaki, Takashi, 2017. "Household-Level Recovery after Floods in a Tribal and Conflict-Ridden Society," World Development, Elsevier, vol. 94(C), pages 51-63.
    3. McDougal, Topher & Caruso, Raul, 2013. "Wartime Violence and Post-Conflict Development Policy: The Case of Agricultural Concessions in Mozambique," NEPS Working Papers 1/2013, Network of European Peace Scientists.
    4. Azreen Karim & Ilan Noy, 2016. "Poverty and Natural Disasters: A Meta-Regression Analysis," Review of Economics and Institutions, Università di Perugia, vol. 7(2).
    5. Schicks, Jessica, 2014. "Over-Indebtedness in Microfinance – An Empirical Analysis of Related Factors on the Borrower Level," World Development, Elsevier, vol. 54(C), pages 301-324.
    6. Muntaha Rakib & Julia Anna Matz, 2016. "The Impact of Shocks on Gender-differentiated Asset Dynamics in Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 52(3), pages 377-395, March.
    7. Christopher B. Barrett & Teevrat Garg & Linden McBride, 2016. "Well-Being Dynamics and Poverty Traps," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 303-327, October.
    8. Goh, Amelia H. X., 2012. "A literature review of the gender-differentiated impacts of climate change on women's and men's assets and well-being in developing countries:," CAPRi working papers 106, International Food Policy Research Institute (IFPRI).
    9. You, Jing, 2014. "Risk, under-investment in agricultural assets and dynamic asset poverty in rural China," China Economic Review, Elsevier, vol. 29(C), pages 27-45.
    10. Alan Brauw, 2015. "Gender, control, and crop choice in northern Mozambique," Agricultural Economics, International Association of Agricultural Economists, vol. 46(3), pages 435-448, May.
    11. Solomon Zena Walelign & Mariève Pouliot & Helle Overgaard Larsen & Carsten Smith-Hall, 2015. "A novel approach to dynamic livelihood clustering: Empirical evidence from Nepal," IFRO Working Paper 2015/09, University of Copenhagen, Department of Food and Resource Economics.
    12. Newman Carol & Kinghan Christina, 2015. "Economic transformation and the diversification of livelihoods in rural Viet Nam," WIDER Working Paper Series 064, World Institute for Development Economic Research (UNU-WIDER).
    13. Andy McKay & Emilie Perge, 2011. "How strong is the evidence for the existence of poverty traps? A multi country assessment," Working Paper Series 2511, Department of Economics, University of Sussex.
    14. Mburu, Samuel & Kaiser, Micha & Sousa-Poza, Alfonso, 2017. "Livestock asset dynamics among pastoralists in Northern Kenya," Hohenheim Discussion Papers in Business, Economics and Social Sciences 25-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    15. Kurosaki, Takashi, 2015. "Household-Level Recovery after Floods in a Tribal and Conflict-Ridden Society," CEI Working Paper Series 2015-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    16. Swati Dutta, 2015. "Identifying Single or Multiple Poverty Trap: An Application to Indian Household Panel Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(1), pages 157-179, January.
    17. Newman Carol & Kinghan Christina, 2015. "Social Capital, Political Connections, and Household Enterprises: Evidence from Vietnam," WIDER Working Paper Series 001, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Asset-based approach; Mozambique; poverty trap; shocks; violent conflict;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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