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Assets, Shocks, and Poverty Traps in Rural Mozambique

Author(s): Lena Giesbert, Kati Schindler
Publisher(s): German Institute of Global and Area Studies (GIGA), Hamburg, Germany
Date of publication: Nov 2010
Issue number: 150
Pages: 40
Series: GIGA Working Papers

Description: 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.

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	Assets, Shocks, and Poverty Traps in Rural Mozambique Author(s): Lena Giesbert, Kati Schindler Publisher(s): German Institute of Global and Area Studies (GIGA), Hamburg, Germany Date of publication: Nov 2010 Issue number: 150 Pages: 40 Series: GIGA Working Papers Description: 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. General note: © Lena Giesbert and Kati Schindler Download: English - Download the full-text document (709 KB)

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Assets, Shocks, and Poverty Traps in Rural Mozambique