Recurrent shocks, poverty traps and the degradation of pastoralists' social capital in southern Ethiopia

This paper examines the long-term effects of shocks experienced by a traditional pastoral community, with the aim of testing the micro-level poverty trap hypothesis. It uses the instrumental probit technique to examine empirically the way that shocks, poverty traps, and the social capital base of the pastoral livelihood system are connected. The results strongly confirm that the likelihood of falling into permanent destitution is significantly associated with recurrent exposure to covariate shocks. The detrimental effects of shocks are transmitted through poverty traps that undermine the efficacy of the indigenous welfare system. Shock-induced poverty has significantly eroded trust and confidence in the traditional social support system and appears to have increased the dependence on aid agencies. These findings emphasize the importance of focusing on innovative risk management initiatives and substantial resource commitment to socioeconomic transformation in pastoral areas rather than unduly emphasizing conventional emergency response operations.