Social Networks and Risk Management in Ghana’s Livelihood Empowerment Against Poverty Programme
Understanding how household consumption, investment and saving decisions respond to transfer income is critical to public policy. In developing countries, saving or otherwise investing in the future is difficult for poor households which often struggle to meet basic expenses, while high debt burdens are also obstacles to saving. Poor households in rural areas of developing countries typically manage risk via informal exchanges or transfers among extended family, friends and neighbours. Motivated by the community dynamics observed in the qualitative assessment of LEAP and the unpredictable and lumpy payments made by the programme during the evaluation period, the main interest of this paper is to assess within a quantitative framework the impact of LEAP on household risk reduction strategies via reintegration in, and strengthening of, social networks and reduction of debt exposure.
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