Disaster Financing and Poverty Traps for Poor Households: Realities in Northern India

March 2011 (VOL. 29, NO. 1)

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This paper addresses household-level disaster financing strategies of the poor in developing countries within the context of current poverty trap discussions. It presents findings on risk perceptions and loss financing practices in relation to floods and droughts in Uttar Pradesh, India. The study found that, due to financial shocks, the risk of households falling below the subsistence level and into a poverty trap is high. In this context, the paper links current approaches in household welfare-driven disaster risk financing to the survey results and provides policy recommendations.