Collective action and vulnerability: Burial societies in rural Ethiopia

Dercon, Stefan; Hoddinott, John F.; Krishnan, Pramila; Woldehanna, Tassew. 2008. Collective action and vulnerability. CAPRi working paper 0083 https://doi.org/10.2499/capriwp83.

Collective action can help individuals, groups, and communities achieve common goals, thus contributing to poverty reduction. Drawing on longitudinal household and qualitative community data, the authors examine the impact of shocks on household living standards, study the correlates of participation in groups and formal and informal networks, and discuss the relationship of networks with access to other forms of capital. In this context, they assess how one form of collective action, iddir, or burial societies, help households attenuate the impact of illness. They find that iddir effectively deal with problems of asymmetric information by restricting membership geographically, imposing a membership fee, and conducting checks on how the funds were spent. The study also finds that while iddir help poor households cope with individual health shocks, but shows that the better-off households belong to more groups and have larger networks. In addition, where households have limited ability to develop spatial networks, collective action has limited ability to respond to covariate shocks. Therefore, realism is needed in terms of the ability of collective action to respond to shocks, and direct public action is more appropriate to deal with common shocks.