How Can NIE Inform Sustainable Livelihoods Analysis and Actions? 2.1.4 NIE and Vulnerability

Institutions are both a source of vulnerability and are affected by it. Thus a weak institutional environment promotes vulnerability in the definition of property rights and in exchange. An important influence on the development of institutional arrangements is the way that they may reduce risk and vulnerability, but risk reduction may be achieved at a cost of overall productivity, and the more vulnerable that people are (in terms of the exposure to, and livelihood impacts of, a range of adverse events), then the more likely they are to choose low risk institutional arrangements at the cost of lower average productivity.

See Case Study 1

Such arrangements may involve exploitative patron-client relations with some form of social safety net, or adverse but guaranteed markets for inputs or products. Understanding institutional arrangements for access to key assets will often be critical for understanding peoples’ vulnerability.