Commons as Insurance: Safety Nets or Poverty Traps?

Environment and Development Economics, Vol. 14, No. 3

Posted: 26 Sep 2007 Last revised: 31 Aug 2014

Date Written: 2009

Abstract

Common property resources are often used by households of developing countries as insurance in case of economic stress. The aim of this paper is to consider the potential poverty-trap implications of this use. If the capacity of the resource is small, or if the population in need of insurance is too large, the households are trapped in CPR extraction activity and cannot get more than their subsistence requirement. In this context, cooperation between households and the introduction of a cooperative insurance mechanism may sustain an equilibrium outside the poverty trap and relax pressure on the resource. Moreover, private insurance schemes could also be potential solution to this poverty trap.

Keywords: Commons, Insurance, Poverty trap

JEL Classification: D23, Q15, Q23

Suggested Citation

Delacote, Philippe, Commons as Insurance: Safety Nets or Poverty Traps? (2009). Environment and Development Economics, Vol. 14, No. 3, Available at SSRN: https://ssrn.com/abstract=1016801

Philippe Delacote (Contact Author)

LEF-ENGREF-INRA ( email )

14 rue Girardet
Nancy, 54042
France

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