Poverty, risk and insurance in rural Madagascar

Despite good macroeconomic performance in the last decades (1997-2009), rural poverty remains very high in rural Madagascar. Two thirds of the rural population lives below the poverty line. Concerned with this situation, the Malagasy government has put rural poverty reduction as an important policy objective since the 2000s. However, the lack of an accurate diagnosis poverty determinants, namely on the underlying dynamics at work has led to very general policies. This policy are likely to miss their objectives since they are not enough specific of the rural Malagasy areas situation. Efficient poverty reduction policies need accurate evaluations of the causes of poverty persistence. This thesis proposes to fill, at least partially, the gap by providing in depth analysis of Malagasy rural poverty dynamics. The first chapter presents the recent Malagasy context and highlights the need for a deeper analysis of the cause of Malagasy rural poverty. The second chapter exploits dynamics methods to identify households that are more likely associated to a chronic or a transient form of poverty. This chapter also tests if poverty is likely to create a vicious circle and to lead to poverty traps. The second and third chapters focus on the role of risk in rural poverty persistence. The second chapter shows that climatic shocks have long-term impacts on households’ growth prospects while the third chapter show risk have important consequences on households’ income and consumption behaviours. Neglecting the role of risk on households’ behaviours is likely to decrease the impacts of others incentives, namely productivity-enhancing incentives provided by current Malagasy rural development policies. Our analysis thus provides rationales for decision makers to allocate more resources to risk- management tools in poverty reduction policies.(AGRO 3) -- UCL, 201