Making Development Less Risky
Life at the bottom of the world’s income distribution is massively risky. Poor households lack basic buffers—savings accounts, health insurance, water tanks, diversified income sources, and so on—against drought, pests, disease and other hazards. Even modest shocks, such as a temporary dry spell or a routine infection, can be devastating.These risks have knock-on effects. To take one prime example, the expected economic return on the use of fertilizer is very high in Africa, yet impoverished farmers cannot obtain it on credit because of the potential for a catastrophic loss in the event of a crop failure....