1. VULNERABILITY A Conceptual Framework by Professor Semboja, REPOA

2. Introduction Poverty vs Vulnerability  strongly linked in a risk/poverty chain  poverty is an outcome, manifested through hunger,illness, powerlessness, etc.  vulnerability is a process of impoverishment, a continuous forward looking state of expected outcome. It defines the probability of falling below an established benchmark welfare level in the future

3. Introduction (Ctd) PRSP recognizes vulnerability to unpredictable events  Linked to the risks of adverse weather, HIV/AIDS pandemic, orphanage, disability age and refugees  Notes the breakdown of the traditional systems and underscores safety nets as risk management instruments  But no details are given on the concept and its operationalization, within the context of the PRS

4. Introduction (Ctd)  This chapter attempts to develop the concept and an analytical framework for addressing vulnerability

5. Conceptual Description Vulnerability is a process of impoverishment, a forward looking state of expected outcomes. It usually defines the probability of falling below a benchmark welfare level in the future  It is forward looking  It is associated with welfare loss, usually below a socially defined minimum level

6. Conceptual Description (Ctd) The process/chain of vulnerability has three main components  The risks or, in most cases uncertain events. In some cases the events are certain, e.g. death from HIV/AIDS  Risk management/responses  The outcome, i.e. welfare loss

7. Risks Risks faced by individuals, households, and communities can be categorized into  Natural risks-floods, drought, earthquakes  Health risks-illness, disability, epidemics  Life-cycle risks-birth, maternity, age, death,  Social risks-crime, terrorism, domestic violence,  Economic risks-unemployment, harvest failure,  Political risks-riots, pol unrest, discrimination,  Environmental risks- pollution, deforestation,

8. Risks (Ctd) Some of these risks are systemic-arising from institutionalized economic, social, political and cultural settings. These shape the resource allocation and reward systems

9. Risks (Ctd) Not all households are susceptible to risks. It is a function of  The resource endowment-physical assets, nutritional status, education, access to information, cultural and behavioral practices. They determine capability to cope with risks  Effective entitlement-a working incentive or rewarding system. Otherwise the poorly endowed will be penalised-unemployment, volatile markets, etc.

10. Risks (Ctd) Therefore, existence of risk does not always lead to vulnerability. Only realized risks that generate adverse outcomes of the level that may push a household below an established welfare level lead to vulnerability. Thus, endowment level, effectiveness of the entitlement system, magnitude of the risk, frequency and timing matter

11. Risk Management Risk management-comprises response actions to risks, shocks and adverse outcomes generated. They fall into:  Ex ante risk management-actions taken before the risk is realized- e.g. case of malaria Risk prevention or reduction- e.g. eliminate malaria carriers mosquitoes Lower exposure to risk-take pills, use nets, migrate to drier areas to reduce exposure to malaria Risk mitigation-provide compensation against the expected loss-e.g. insurance. Moral hazard?

12. Risk Management (Ctd)  Ex post risk management- actions taken after the risk is realized. Coping responses-public safety nets, e.g. food aid, disposal of assets, child labour Three difficult policy questions arise  Whether to focus on ex ante or ex post?  Which combination of instruments? Child labour enhances both current Y and future child vulnerability

13. Risk Management (Ctd)  What role for which stakeholder? Vulnerable households are unlikely to invest in ex ante risk management A large part of the ex ante risk management may require socio- economic, political and cultural institutional changes. Governments are best placed to address these areas-through laws and regulations and information and education campaigns

14. Conclusion This framework is still a work in progress. Inputs from this meeting will be used to refine it further. Because the ongoing PPA is focusing on vulnerability, it will also form an important input for finalizing this framework, particularly in providing the Tanzanian context. But this framework will also strengthen the analytical framework for the PPA to enrich its relevance for poverty reduction.