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Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras

Author

Listed:
  • Michael Carter

    (University of Wisconsin)

  • Peter Little

    (University of Kentucky)

  • Tewodaj Mogues

    (International Food Policy Research Institute)

  • Workneh Negatu

    (Addis Abeba University)

Abstract

Droughts, hurricanes and other environmental shocks punctuate the lives of poor and vulnerable populations in many parts of the world. The direct impacts can be horrific, but what are the longer-term effects of such shocks on households and their livelihoods? Under what circumstances, and for what types of households, will shocks push households into poverty traps from which recovery is not possible? In an effort to answer these questions, this paper analyzes the asset dynamics of Ethiopian and Honduran households in the wake of severe environmental shocks. While the patterns are different across countries, both reveal worlds in which the poorest households struggle most with shocks, adopting coping strategies which are costly in terms of both short term and long term well-being. There is some evidence that shocks threaten long term poverty traps and that they tend to militate against any tendency of the poor to catch up with wealthier households. Policy implications are discussed in terms of access to markets and the design of government safety net programs.

Suggested Citation

  • 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, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpdc:0511029
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    References listed on IDEAS

    as
    1. Valdes, Alberto & Lopez, Ramon E., 1999. "Fighting Rural Poverty In Latin America: New Evidence And Policy," 1999 Annual meeting, August 8-11, Nashville, TN 21581, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Quisumbing, Agnes R., 2003. "Food Aid and Child Nutrition in Rural Ethiopia," World Development, Elsevier, vol. 31(7), pages 1309-1324, July.
    3. 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.
    4. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
    5. Mogues, Tewodaj & Carter, Michael R., 2004. "Social Capital and the Reproduction of Inequality in Socially Polarized Economies," Staff Paper Series 476, University of Wisconsin, Agricultural and Applied Economics.
    6. Boucher, Stephen R. & Barham, Bradford L. & Carter, Michael R., 2005. "The Impact of "Market-Friendly" Reforms on Credit and Land Markets in Honduras and Nicaragua," World Development, Elsevier, vol. 33(1), pages 107-128, January.
    7. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
    8. Morris, Saul S. & Neidecker-Gonzales, Oscar & Carletto, Calogero & Munguia, Marcial & Medina, Juan Manuel & Wodon, Quentin, 2002. "Hurricane Mitch and the Livelihoods of the Rural Poor in Honduras," World Development, Elsevier, vol. 30(1), pages 49-60, January.
    9. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
    10. Tewodaj Mogues & Michael Carter, 2005. "Social capital and the reproduction of economic inequality in polarized societies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 3(3), pages 193-219, December.
    11. Peter Little & M. Priscilla Stone & Tewodaj Mogues & A. Peter Castro & Workneh Negatu, 2006. "'Moving in place': Drought and poverty dynamics in South Wollo, Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 200-225.
    12. John Hoddinott, 2006. "Shocks and their consequences across and within households in Rural Zimbabwe," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 301-321.
    13. Tewodaj Mogues, 2005. "Shocks, Livestock Asset Dynamics, and Social Capital in Ethiopia," Development and Comp Systems 0512006, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. World Bank, 2008. "Ethiopia - A Country Study on the Economic Impacts of Climate Change," World Bank Other Operational Studies 8030, The World Bank.
    2. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011 44, Verein für Socialpolitik, Research Committee Development Economics.
    3. Alejandro de la Fuente, 2007. "Climate Shocks and their Impact on Assets," Human Development Occasional Papers (1992-2007) HDOCPA-2007-23, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    4. Tewodaj Mogues, 2005. "Shocks, Livestock Asset Dynamics, and Social Capital in Ethiopia," Development and Comp Systems 0512006, University Library of Munich, Germany.
    5. Barnett, Barry J. & Barrett, Christopher B. & Skees, Jerry R., 2008. "Poverty Traps and Index-Based Risk Transfer Products," World Development, Elsevier, vol. 36(10), pages 1766-1785, October.
    6. Fisher, Monica & Chaudhury, Moushumi & McCusker, Brent, 2010. "Do Forests Help Rural Households Adapt to Climate Variability? Evidence from Southern Malawi," World Development, Elsevier, vol. 38(9), pages 1241-1250, September.
    7. Jacques Christophe Diderot Julien, 2005. "Medición del impacto del huracán Mitch en el bienestar de los hogares de Nicaragua," DOCUMENTOS CEDE 006736, UNIVERSIDAD DE LOS ANDES-CEDE.
    8. World Bank, 2007. "Ethiopia - Accelerating Equitable Growth : Country Economic Memorandum, Part 2. Thematic Chapters," World Bank Other Operational Studies 7866, The World Bank.
    9. Murendo, Conrad & Keil, Alwin & Zeller, Manfred, 2010. "Drought impacts and related risk management by smallholder farmers in developing countries: evidence from Awash River Basin, Ethiopia," Research in Development Economics and Policy (Discussion Paper Series) 114750, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics.

    More about this item

    Keywords

    Ethiopia; Honduras; Shocks; Drought; Hurricanes; Assets; Poverty traps; Asset smoothing; Social capital;

    JEL classification:

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

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