Sunday, February 5, 2012

Informal institutions in rural Ethiopia

The "barefoot hedge-fund manager" as described in the book poor economics ( face a multitude of risk : droughts, health, death both from family member but also animals, income. With the rare exceptions of weather insurances (provided nowadays still on experimental bases), the is no insurance company to take over all these risks. Therefore, many informal institutions have developed in the Ethiopian rural area in order to help smallholder to cope with these different risks. Some institutions support cost of funerals, some help when medicine is needed, some allow to exchange labor. It is a complex issue, as most of the informal institutions address more than one risk. An intern started working on my project, and makes a broad literature review and test some hypothesis on an existing farm household dataset.

During one of my field trip (see, I was invited to a Mehaber meeting. Mehaber is a religious based organisation. Every week farmers meet at the house of one of the members. Each member brings it contribution in food and in money. They share a meal and tela (local beer). They discuss and look for solutions for any emerging problem and conflict. If one farmer faces an individual problem, the Mehaber member can decide to support that member financially. In Adet, where i was invited to the meeting, the Mehaber also organised the collective management on grassland, and the cut and carry system. It suggests that some of these institutions are able to organize collective action around water management : another issue which the intern will try to investigate. 

Mehaber meeting near to Adet

find here a more recent post about informal institutions in Ethiopia  or check the institution tag.

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