Ruchira Bhattamishra, EASOP, World Bank
Christopher B. Barrett, Professor of Applied Economics and Management, Cornell University
Robin Mearns, Lead Social Development Specialist, SDV, World Bank
Harold H. Alderman, Adviser, AFTHD, World Bank
Poor households in developing countries face a variety of economic shocks from such adverse events as illness and disability, crop failure and death of livestock. Community support helps cushion poor households from the negative effects of such shocks. Over time, communities have developed a variety of coping mechanisms, and networked forms of mutual assistance to spread risk, such as funeral societies, grain banks, and rotating savings and credit groups. The informational advantages that community members have related to moral hazard and adverse selection, among other advantages, can be leveraged via more formally-organized assistance programs of social funds and other CDD operations.
This session presented a recent study commissioned by the World Bank’s Social Protection Unit on the theoretical underpinnings and operational implications of community-based risk management. Following the presentation of study results, a panel of Bank staff and external experts offered responses, based on experience with social protection and community-based insurance project activities in AFR, EAP, ECA and SAR.
Provided conceptual overview of community-based risk management approaches to mitigating household shocks.
Identified formal and informal approaches to risk management, and implications for project design, including pro-poor targeting.
Discussed the strengths and weaknesses of social funds and CDD projects as platforms for operationalizing community-based risk management instruments.
"Community-based Risk Management Arrangements: Implications for Social Funds" (1.95mb pdf)
by Ruchira Bhattamishra and Christopher B. Barrett