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Assets, Shocks, and Poverty Traps in Rural Mozambique

  • Lena Giesbert

    ()

  • Kati Schindler

    ()

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 endow-ments 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 ru-ral areas and limited new economic opportunities outside of the agricultural sector.

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Paper provided by GIGA German Institute of Global and Area Studies in its series GIGA Working Paper Series with number 150.

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Length: 40
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:gig:wpaper:150
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