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Commons as insurance: safety nets or poverty traps?

Published online by Cambridge University Press:  01 June 2009

PHILIPPE DELACOTE
PHILIPPE DELACOTE*
Affiliation:
INRA, UMR 356 Économie Forestière, F-54 000 Nancy, FranceAgroparistech, Engref, Laboratoire d'économie forestière, F-54 000 Nancy, FranceBeta, BETA-CNRS, Université de Nancy, Faculté de Droit Economie et Gestion, F-54 000 Nancy, France. Email: philippe.delacote@eui.eu
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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 low, 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 a potential solution to this poverty trap.

Type
Research Article
Information
Environment and Development Economics , Volume 14 , Issue 3 , June 2009 , pp. 305 - 322
Copyright
Copyright © Cambridge University Press 2009

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