The Long-Term Impacts of Short-Term Shocks: Poverty Traps and Environmental Disasters in Ethiopia and Honduras

• Authors: Michael R. Carter, University of Wisconsin; Peter Little, Emory University; Tewodaj Mogues, International Food Policy Research Institute; Workneh Negatu, Addis Ababa University
• Journal Title: World Development
• Volume: Volume 35, Number 5
• Publisher: Elsevier | 2007-05, Pages 835-856
• Type of Work: Article | Post-print: After Peer Review
• Publisher DOI: http://doi.org/10.1016/j.worlddev.2006.09.010
• Subjects: Economics, Finance; Agriculture, General
• Keywords: natural disasters; environmental shocks; poverty; long-term effects; Ethiopia; Honduras

Abstract

Droughts, hurricanes, and other environmental shocks punctuate the lives of poor and vulnerable populations in many parts of the world. The direct impacts can be horrific, but what are the longer-term effects of such shocks on households and their livelihoods? Under what circumstances will shocks push households into poverty traps from which recovery may not be possible without external assistance? In an effort to answer these questions, this paper analyzes the asset dynamics of Ethiopian and Honduran households in the wake of severe environmental shocks. While the patterns are different across countries, both reveal worlds in which the poorest households struggle most with shocks, adopting coping strategies which are costly in terms of both short term and long-term well being.