Poverty, institutions, peasant band conservation investment in Northern Ethiopia

The thesis consists of five papers:

• an in-depth analysis of poverty, its distribution, dynamics and its correlates within the framework of the role of economic reforms on poverty reduction in a remote, unstable and environmentally troubled region
• looks at the issue of the efficacy of a micro-finance program in reaching out to the poor and measures the impact of program participation
• examines the efficacy of food-for-work (FFW) programs in targeting the poor by emphasizing the role of FFW programs as means to provide safety nets to the poor. It argues that perfect targeting of such programs may not be attainable not only due to flaws in operational and institutional designs but also due to imperfections in factor markets
• examines farm households' decision to use purchased land quality enhancing inputs (e.g. fertilizer) and how this is affected by households' elicited risk preferences while controlling for institutional, plot, household and village level factors
• analyzes the role of tenure insecurity, resource poverty, risk and time preferences, and public conservation programs on private investment by focusing on medium and long-term land conservation measures

Main findings include:

• the credit program’s focus on providing production credit does not target the relatively worse-off households
• program participation has a positive and significant effect on the change in the level of income derived from self-employment (but insignificant effect on wage employment) underlining the importance of capital constraints to access to self-employment
• household labour endowment is an important factor in a household’s decision to participate in FFW. Poor, but labour rich, households are selected into the programs, which show efficient program targeting. However, once households have decided to participate in FFW programs, the intensity of participation is not strongly determined by the labour endowment of households. Asset holding of rural households seems to have influenced the amount of labour supplied, which may involve a serious leakage in targeting
• risk preferences do not seem to adversely affect households’ decision to use fertilizer
• collective investment organized by public led conservation programs is found to significantly stimulate private investment in land conservation. Plot level variables and households’ perceptions (including risk preferences) are important on returns from conservation investments, in terms of improved land quality and increased crop yield, in the decision to invest and intensify soil conservation