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Food Aid and Informal Insurance Stefan Dercon, University of Oxford Pramila Krishnan, University of Cambridge Download the Paper (PDF format) - July 31, 2003 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing. ABSTRACT: Abstract Households in developing countries use a variety of informal mechanisms to cope with risk, including mutual support and risk-sharing. These mechanisms cannot avoid that they remain vulnerable to shocks. Public programs in the form of food aid distribution and food-for-work programs are meant to protect vulnerable households from consumption and nutrition downturns by providing a safety net. In this paper we look into the extent to which food aid helps to smooth consumption by reducing the impact of negative shocks, taking into account informal risk-sharing arrangements. Using panel data from Ethiopia, we find that despite relatively poor targeting of the food aid, the programs contribute to better consumption outcomes, largely via intra-village risk sharing. SUGGESTED CITATION: Stefan Dercon and Pramila Krishnan, "Food Aid and Informal Insurance " (July 31, 2003). The Centre for the Study of African Economies Working Paper Series. Working Paper 183. http://www.bepress.com/csae/paper183