Sources of Social Risks and Risk Management Arrangements

Abstract

Ethiopia’s major crises have been caused by institutional failures for which the government is mostly responsible. Institutional and structural flaws are typical causes of governance failure, and they may frequently be traced back to a failed institutional change. The source of social risks in the emerging literatures has not explained by an institutional trap factors. This chapter examines the origins of societal risks, risk management arrangements, and methods for urging institutions to manage risk in Ethiopia. A simple random sampling method were employed to select a total of 382 sampled households from 10 sub-districts. Structured interview schedule, focus group discussion, and key informant interviews data collection tools has been employed. The data were analyzed using principal component analysis and qualitative approach. The result of the qualitative analysis shows social risks faced by households caused from governance failures, institutional disincentives, elite’s exploitations, and inefficiency. The result from principal component analysis reveals that market based, informal and public arrangements was identified as institutional arrangements having high factor loadings The imply that institutional arrangements are crucial interventions in managing social risks. Thus, this study suggests a well-designed institution and institutional arraignments for managing risks and removal of the underlying sources of social risks.

1. Introduction

Global concerns about multiple risks and uncertainties regarding market volatility, natural disasters, climate change, conflicts, forced displacement have had exacerbated by fears of potential disruptions [1]. In Sub-Saharan Africa specially Ethiopia, social risks have get apparent as one of the most human tragedies. Concerns about the social risk of conflict and mass migration, as well as the most heinous human tragedies, have recently surfaced. Many of the rural peoples in Ethiopia are in a state of crisis. The worst humanitarian crisis and terrible tragedy in Ethiopia are linked to institutional and structural problems for which the government is responsible. Government is responsible in this context means that government corrections may or may not really be a solution or failing to resolve a growing long tradition of institutional problems. These longstanding failures were referred to as institutional traps.

Institutional traps understood as an inefficient but stable institution (norm) [2]. The principal cause for the rise of institutional traps entails institutional inadequacies, security and leadership shortcomings, policies and regulatory inefficiencies, market and institutional failures [2, 3]. These traps, in turn, result in risks particularly in the areas where there is high insecurity. In view of that, Ethiopia’s already fragile government systems have been plunged into chaos. As a result, Ethiopia is in a security bind, unable to guarantee basic human rights and address its people’s immediate needs. In this sense, Ethiopia’s greatest crises have been caused by institutional failures, the majority of which are the government’s fault. Typical causes of governance failure are institutional and structural problems, which can often be traced back to a failed institutional reform (norm).

Traditional public policy and welfare economics have assumed that natural disaster, market failures and health problems are common, requiring the intervention of government in order to protect the society. Becks’ [4], Risk Society Theory, natural disasters and health problems represented a major concern for the population and society. In this regard, the Cultural theory of Douglas, postulates that “risks caused by structural forces” [5], the governmentality perspective of Foucault [6], conceptualized risk from a new style of governance in modernity. In this regard risk is mainly understood as a concept entirely socially produced.

In the contemporary risk literature, the sources of social risks and risk management have not been well conceived and speculated from institutional perspective explaining institution as rule of the game and institutional arrangement as an intervention for social risk management. This implies that the study of social risks within the notion of institutionalism has been coming behind. Institutions are a part of the social order of society and they govern behavior and expectations of individuals, while at the same time they build social structures and improve social development. According to North [7], throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange. Fair institutions ensure that all people have equal rights and a chance to improve their lives, and access to justice when they are wronged [8]. Contrary, study from Latin American and Caribbean (LAC) countries show that the unmet demands of a large share of the population fuel an institutional trap that jeopardizes the sustainability of the social contract.

Most studies carried out in eastern Ethiopia, focused on the risks of climate change, conflict, food insecurity. Moreover, poor governance and weak capacity were also contributed to slow progress of drought-risk management in Ethiopia [9]. In study area smallholder households were extensively exposed to social risks of food insecurity and production loss [10], illegal and forced displacement and migration CISP [11]; price rises, illness, job loss, underemployment, deaths, and injustices. Empirically, in social protection landscape of Ethiopia, studies mainly focused PSNP of public arrangements of social risk management. Cash- and food-for-work Productive Safety Net Programme (PSNP), which constitutes a key part of the government’s Food Security Programme (FSP). Nevertheless, the PSNP is not the only policy arrangement that aims to provide a form of social protection in rural Ethiopia [12]. The challenges in operationalization of national social protection policy in Ethiopia compounded with inadequate coordination arising from institutional capacity imbalance. This, in particularly, hampered by a lack of limited vertical interface, frequent changes of institutional arrangements, and imbalance between government agencies [13]. Overall, few studies have examined the institutional trap factors of social risks and social risk management arrangements.

This book chapter argue that institutional traps caused from longstanding failures if not well managed can easily be transformed into social risks. Given this, the source of social risks in the emerging literatures has not explained by an institutional trap factors. Yet, if it is possible to be acquainted with a persistent institutional force, it can be considered the “institutional trap as a cause of social risks. The solution to this crisis is to design effective institutional arrangements (social risk management), but there is no consensus on what those institutional arrangements are. Moreover, the failure to establish, devise, and deliver adequate social protection solutions necessitates an understanding of contemporary institutional causes of social risks as well as the role of institutional arrangements in social risk management. Conceptualizing and assessing the matters of social risks from institutional perspectives may provide a means for simultaneously managing the multiple social risks through institutional arrangements would be significant to get lessons for the study area. The contributions of the present paper thus to provide an empirical account of institutional dynamics that may explain the underlying causes of a social risks and risk management arrangements in Ethiopia. The objective of this chapter thus examines the origins of societal risks, risk management arrangements, and methods for urging institutions to manage risk in Ethiopia.

2. Sources of social risks and risk management arrangements

2.1 Institutional traps as a sources of social risks

Social risks and deprivations suffered by the poor have resulted from a long tradition of institutional traps. Given this, the causal instruments of social risks were related to the nation of institutional traps. In this case, institutions, primarily institutional traps further trigger the impossibility of access to social risk management. Such interlinked traps are particularly relevant in a rapidly changing pastoral landscape, which poses new and increasingly complex social risks. In this subsection, four institutional traps that caused social risks were generated by employing focused group discussion and key informant interviews. These are governance failures, institutional disincentives, elite’s exploitations, and inefficiency.

2.1.1 Governance traps of social risk

Respondents explained governance failures, administrative injustices, and the resulting human rights violations committed by various actors (civilian administrative officials, polices, and federal military) contributed to social risks in the study areas (Table 1). This was explained in terms of territorial centralization of government context and delayed government intervention to maintain social stability and partial federal security treatments, especially from 2016 to 2019. For instance, on September 01, residents of Mieso woreda engaged in daylong fighting with members of the “Liyu Police”. The clash left “more than 30 people dead and several others injured. The government became very weak and fragile as of post-September 2017 in Oromia and Somali regions where many fatalities occurred, scores injured, thousands displaced, and livestock worth millions of Birr driven away. One informant from Dire Kale kebele of Gumbi-Bordode district stated “when cattle were looted, rape, and killings committed by bandits openly supported by the Liyu Police, federal army and police not intervene immediately”. These show how imperfect political agency together with army bias and weak accountability strengthen each other and undermine or disrupt the chance of cooperation between elites and communities. According to Ortiz et al. [14], the presences of natural resources weakens or corrupts government, leads to a lack of transparency and accountability, and provoke internal conflicts, which lead to additional scope for mismanagement. This risk is referred to as “governance risk”.

No.	Indicators	Consequences/risks
1.	Delay and weak government intervention	Spark insecurity/instability and erupted deadly conflicts
2.	Absence of state cooperation (Oromia and Somali region)	Worsened security issues and lawlessness including contraband trades; Contributes to the eruption of conflicts mobilized and forced them to bear arms
3.	Worsened supremacy of law	prevalence of criminal activities and peoples to acquire arms at a soaring price
4.	Worsened supremacy of law	prevalence of criminal activities and peoples to acquire arms at a soaring price

Table 1.

Risks induced by governance and administrative injustices.

According to the leader of Fayo kebele of Mieso district, there were recurrent occurrences of insecurity; the causes pressed out are failure of negotiation and agreement to end “border hostilities” between Oromo and Somali. He further stated citing the agreement signed by presidents of Somali and Oromia regional states to end “border hostilities” in April 2017. After three months, the locals have increasingly become resentful of the extrajudicial stretch by members of the “Liyu Police”. This implies the failure of interstate cooperation was the root factor for the eruption of deadly conflicts in the woredas and thereby contributed to the absence of supremacy of law. Similarly, land grabs eviction of farmers around Finfinnee and the fears that a plan to expand the capital into the Oromia region is giving for the birth of Oromo political protests. In response to this, in the study area, the government inhumanely cracking down on people, attacks committed by local militia, Afar Special Police Forces, special Militia (Liyu. Hayli) of the Somali region, and the Ethiopia Defense Forces, since the beginning of 2015, resulted in for 102 civilian causalities, mass migration, displacement, and massive human rights abuse. The public’s trust in the government continues to be historically low, mainly for protesters victims of extrajudicial killing by security forces, labeling protesters as terrorists and anti-development forces.

Massive displacement and the sudden deportation of Oromo is another challenge in the study area. They were displaced and deported from the Somali region, Djibouti, and currently settled in Bordode, Asabot, and Mieso as well as in new settlement sites across the Oromia region. Migration from study area through the eastern migratory routes transiting through Djibouti, Somaliland, and Yemen, and the sudden arrival of deported migrants and the linked risks of abuse such as violence, rape, and outright murder, and risks of dehydration, starvation, extortion, robbery and sexual abuse was reportedly expressed by women returnee during focused group discussion. The driving forces are a) conflict; b) political threats (opposition/protest in Oromia region presented a severe threat to regime interests) and c) lack of government willingness to redress incidences of insecurity for the last two decades has contributed for social risks to happen.

2.1.2 Institutional disincentives

Institutional indicators of livelihood include ownership and rights over productive assets, access to rural financial markets, and access to credit services. In certain circumstances, access to and effective arrangements is the most important incentive for pastoralists in securing a livelihood. Observing experiences of diverse parts of the world, Bonfoh et al. [12] argue that mobility is vital for many pastoral communities in securing their livelihoods. In the study area, respondents revealed that the ineffectiveness of rules or arrangements were institutional traps resulted in livelihood risks. Lack of property rights to access credit and pasture depletion and rangeland degradation are strong factors that drive the households and members of the household’s movement to search for better livelihood means. The weakening adaptive capacity of customary institutions in the face of adversity, and threats or significant sources of stress result in the rise of new arrangements of land use that leads to resource degradation and disputes between users. Constraints to sustainable pastoral development include little and misdirected public and private investment, weak resource rights, a lack of human capital, an ineffective pastoral voice, and poor governance [15].

The evidence of findings on sources of livelihood risks that comes mainly from focus group discussants in the study area entails pasture depletion, limited livelihood; disputes over pasture and water resources; increased input costs; migration; and food insecurity. This was directly triggered by the weakness of institutions and arrangements. For instance, depletion of pasture and water resources destabilize the pastoral livestock production system and in turn declined yield and also affected livelihood outcome. One of the kebele leaders in the area responded that their matter was not only limited to pasture depletion and water shortage but also the limited capacity of our customary institutions and inadequate or absence of legal instruments for pasture management. Poor are vulnerable households, communities, and those highly entrapped by risks of livelihood. Finding of Sujakhu et al. [16] indicated that limited adaptive; lack of human capital and natural capital limits livelihood diversification options and the opportunity for a higher income. Lower revenue and savings were also other factors that limit financial capital.

Furthermore, interviewers addressed that remoteness and incidences of insecurity restrict access to financial services and market-based social protection of food security; and inequitable access to productive assets again restrained livestock production performance and coupled with the nature of communal ownership of land in the pastoral area together. Where livelihood diversification becomes challenging following Tenaw [17] study, the inability of pastoral and agro-pastoral communities to diversify their livelihoods was due to poor asset base, lack of financial facilities, lack of awareness and training, lack of rural infrastructure, and lack of opportunities. Increased input costs, migration, and food insecurity are also other risks that lead to losses of livelihood assets. Undoubtedly, weak social institutions restrict formal credit access and prolonged inadequate access to income can lead to livelihood risk.

The expansion of cultivated lands and increased competition for natural resources resulted in increased security and transhumance problems pastoralists’ face. Indeed, pastoralists fall to reach their potential due to legal, economic, social, and political disincentives and barriers to the mobility of livestock and communal management of rangelands. In the area, the emerging land-use system (dryland agriculture) and lacking legal ownership of rangeland restricted livestock mobility to seek pasture and water and in turn, mobility seems to be a source of livelihood insecurity. Haller et al. [18] argues that pastoral commons are under increasing pressure from overuse, land management policies, the persistent misconception of pastoralism, and combined with increasing land alienation and fragmentation.

Institutional disincentives producing unjustly high livelihoods risks mainly relate to institutional failures as explained by respondents. These include the absence of operational capacity, bad governance, limited access to credit, and unpleasant interactions between cultivators and pastoralists. This study coincides with that of Azlina and Bakar [19] that highlighted that institutional disincentives depressed livelihoods and local hostility toward park establishment. This was due to the failure of institutions (institutional arrangement of TSMP) to provide incentives conditions for instance promoting alternatives livelihoods, integrating local customary institutions, and building trust and social capital among stakeholders.

2.1.3 Elites and security forces exploitation

Elites dominance and biased in the study area described as a cause of social instability through control over natural, economic, political, social, organizational, symbolic (expertise/knowledge) resources, stand in a privileged position to formally or informally influence decisions and practices that have broad societal impact. This can be done through the elite’s networks. Elite networks are a set of elite actors that jointly control and share resources. Networks may be local or national and they are increasingly transnational and often tightly connected across the various level. Weak institutions allow government officials to engage in self-serving opportunism that increases transaction costs for others and dissipates government funds, thus making the social policy less predictable. Moreover, the damage to economic prosperity and the risks to human development and welfare in failing states and those in which corruption is deeply embedded among ruling elites. The massive human welfare problem, resource constraints, and weak public institutions pose a dilemma for state-based social security systems. Because formal social security schemes primarily help those who are already privileged by having secure jobs and steady incomes and exclude those whose needs for social protection are the greatest, an extension of social security schemes may be regressive and contribute negatively to the security of the very poor [20].

Weak governance adversely affects socio-political stability, income and employment opportunities, and sustained settlements of people. People can be dissatisfied with their life if they lose their lives, lose use and ownership rights over tangible and intangible resources that determine their collective identity and dignity. Corrupt practices or the failure of institutions that protect legitimate rights, weak governance, weakness collective action, and weak political representations in policy-making processes exacerbates social discontents, political unrest, and economic instability. Following Oromo Protests torch has been committed local officials including security. In both districts, instability and social discontent over the local governments are explained. Recently, rising levels of citizen dissatisfaction with public services and institutions lead to socio-political instability across the globe. Understanding the underlying causes of multifaceted social discontent, civil unrest and protests help address the structural sources of discontent. Referring to the work of Sebastián et al. [21] structural challenges, lack of trust in institutions, and inclusivity in dialog considered drivers of social discontent that undermine citizens’ prospects of well-being.

2.1.4 Inefficient social protection arrangements

One of the main reasons why social welfare institutions exist is taking care of people and to pool and redistribute social risks. This includes community organizations, political groups, and churches. However, they also include information resources such as friends, neighborhood networks, and social support groups. Welfare institutions of households of the study area and the natural ecosystem over which subsistence livestock production performed for their immediate subsistence needs rather than demands of a market are closely linked to each other. Informal welfare of afosh/idir, guza/debo, hirpha, free use of pack animals; gift-giving and credit without interest from social networks; transfers from mutual support networks revealed as common institutions, were pastoralists and agro-pastoralists mainly relied on upon response to multifaceted risks and also serves as social-economic problems solving arrangements. Drivers are lack value-added marketing, depletion of pasture together with water and scarcity of grazing land, interferences of brokers in livestock marketing, pastoral communities’ dissatisfaction with public social goods, and service delivery induced by corruption. Lacks adequate access to social protection in rural encompass a lack of legal entitlements, informal nature, and type of employment, low contributory capacity. Fiscal constraints and weak administrative capacity have also limited the reach of social protection programs to poor rural areas [22].

2.2 Institutional arrangements for social risk management

This subsection presented and discussed types of institutional arrangements for social risk management. To discuss institutional arrangements for social risk management, one needs to understand the categories/types of the existing institutional arrangements in the study area that households’ used to manage social risks. Institutional arrangements understood as the Institutional arrangements are the combination of formal constraints, informal rules, and their enforcement characteristics [23]. Institutional arrangements for social risk management is defined as institutional arrangements for dealing with risk through informal (family or community-based), market based and publicly-provided mechanisms [24]. It is also explained as an informal, market, and public based arrangements that help individuals and households to help manage social risks. Informal arrangements for social risk management: These include marriage, mutual community support, and savings in real assets such as cattle, real estate, and gold. Market-based arrangements for social risk management: These include financial assets - cash, bank deposits, bonds, and shares - and insurance contracts. Publicly mandated or provided arrangements: These include social insurance, transfers, and public works.

Smallholder crop and livestock producers’ perceptions of institutional arrangement for social risk management for 22 variables were run using the principal component analysis to determine the number of components and to produce dependent variables for the multivariate regression model used for determinants of institutional arrangements for social risk management. A summary of the analysis is given in Table 2 indicated that the KMO = 0.89 was greater values as the value is well above the acceptable limit of 0.5. The Barlett’s Test of Sphericity produced a p-value = 0, which is smaller than 0.01 and thus indicates a significant correlation structure supporting the appropriateness of component analysis for the data. Three components with Eigenvalues greater than 1 indicate relatively large amounts of variance with a cumulative percentage of 76.39 were presented and summarized in Table 2. Component loadings greater than 0.50 and high communalities were considered for the interpretation of the principal components.

Institutional Arrangement	Mean	SD	Factor loadings
			Comp1	Comp2	Comp3	Communality
1. FREEOXEN	2.57	1.542	0.65	0.52		0.78
2. FREPACK	1.88	2.895		0.73		0.54
3. GIFTGIV	1.71	1.904		0.93		0.88
4. MUTALSUP	2.60	1.746		0.73		0.62
5. CUSTTENU	1.68	1.810		0.95		0.91
6. COMMFINC	2.68	1.696	0.73			0.76
7. MULTCOOP	2.44	1.532	0.84			0.72
8. MFI	2.58	1.461	0.88			0.81
9. RUSACCOP	2.65	1.503	0.91			0.87
10. VSLA	2.58	1.484	0.83			0.77
11. LABORMKT	2.48	1.577	0.76			0.72
12. MICRENTP	2.60	1.525	0.83			0.77
13. CANTFRM	2.62	1.433	0.87			0.76
14. RETAILER	.90	1.090		0.77		0.61
15. POS	2.13	1.715	0.76			0.68
16. CASHPW	2.42	1.661	0.71			0.60
17. FOODPW	2.99	1.389			0.89	0.86
18. CASHPER12	2.49	1.788	0.59		0.71	0.89
19. FODTER12	2.88	1.406			0.88	0.91
20. CASHTEM6	1.42	1.770		0.86		0.88
21. FODTEM6	1.41	1.736		0.87		0.83
22. RESETLE	1.53	1.887		0.80		0.64
Eigenvalues			9.29	5.82	1.70
Variance explained%			35.11	27.46	13.82
Cumulative %			35.11	62.57	76.40

Table 2.

Mean, standard deviation and varimax factor of institutional arrangement.

Note: The correlation was suitable analysis (P < .001; KMO = 0.895).

Component 1 was named ‘market arrangements’. The idea of naming market arrangement comes from the loadings of saving and lending services from rural savings and credit cooperative (RUSACCOP); contract farming/marketing (CANTFRM); marketing linkages and services from multipurpose cooperatives (MULTCOOP); saving and lending services from microfinance institutions (MFIS); micro and small-scale enterprise (MICRENTP); and saving and lending services from village savings and loan association (VSLA). As can be observed from results presented in Table 2, component 1 is strongly relevant to risk impact sharing mechanisms represented by an array of the market (saving, credit, lending service, and marketing). Additionally, high loadings of multiple scopes of teamwork were noticed. This component accounts for nearly 35.1% of the total variation. Individual households will also take advantage of market-based institutions such as money, banks, and insurance companies when they are available. However, given these instruments’ limitations due to market failure, their usage will be initially restricted but will rise with financial market development. Because formal market institutions are reluctant to lend to households without secured earnings, microfinance is also an important instrument of social risk management.

Component 2 is called ‘informal arrangements’ because of the significant loadings of risk management arrangement related to free use of pack animals (camels or donkeys) (FREPACK); gift-giving and credit without interest from social networks (GIFTGIV); transfers from mutual support networks (MUTALSUP); customary land tenure systems reduce risk of social conflicts (CUSTTENU); and resettlement with access to enough farmland (RESETLE). On the component ‘informal arrangement’, relatively high loadings of an arrangement of gift-giving and credit without interest from social networks, and customary land tenure systems were accompanied with high loadings of arrangements that are required by informal arrangements of social risk management. Using free use of pack animals, transfers from mutual support networks and resettlement with access to enough farmland, all of these instruments are needed in case of risk management through an informal arrangement. Component two explains about 27.46% of the total variation of households’ informal risk management arrangements. Informal arrangements have existed since the dawn of humankind and still constitute the main source of risk management for the majority of the world’s population. In the absence of market institutions and public provisions, the way that individual households respond to risk is to protect themselves through informal (family or community) or personal arrangements (self-protection and self-insurance).

According to an understanding generated from key informants and focused group discussants, informal arrangements are organizations/groups of people for solidarity, predominantly instituted to govern their relationship through customary laws that serve people in solving their various political and social, economic, and environmental matters. These include afosh/idir, farmer’s association, guza/debo, and hirpha are mutual help for households exposed to and severely affected by different risks.

Afosha/Idiris traditional organization of people for solidarity, mainly established to celebrate funerals and support the families of the deceased. Discussants described afosha as a helpful arrangement that provides bits of help and a service (food, credit, and moral incentives) during the wedding, funerals, loss of property crisis faced members, and also provides non-members in case they faced social problems, for example, supporting displaced people. In lining with this, the work of the Oromia regional task force [25] on a program of the plan on adaptation to climate change reported that community-based organizations (such as Afosha/Idir), support members during emergencies and also provide credits during the crisis. Other studies also narrated “afosha” generally used for solidarity purposes among neighbors: support a family after death, wedding expenses, and maintenance of the mesquite [26]. Others argue that ‘Idir’ and ‘Afosha’ are mainly established to formalize funerals and to help support the families of the deceased and also used for labor sharing and development purposes [27].

Farmer associations arranged on matters concerning natural and productive resources, sociopolitical and economic as well as development issues of their kebeles that influence the livelihoods of fellow/member villagers at village levels. According to focused group discussion participants, road construction, natural resource management and decision on kebeles administrative are issues and tasks undertaken by the household’s participation. Aregu et al. [27] claims that farmers’ association as a semi-autonomous entity that is directly involved in decisions regarding the land, water, natural resources, and other productive, social, and political issues that affect the lives of all community members.

Guza is labor sharing arrangement and non-reciprocal workgroup that comes together to help each other through labor sharing for farmland preparation, house construction, and other works. This arrangement was considered as helpful according to participants of focused group discussion. It provides help to households’ during family labor shortage and in case of death, illness faced households’ labor force and member leave to attend education, and also migrate/move to other places far from family for a socio-economic purpose. On the contrary Borchgrevink et al. [28] argued that there is a change that the caller/landowner is no longer responsible to provide the food and drink. This implies that the guza institution was reconstituted so that each member of the work team brought their food, drink, and khat, and the team rotated, working on each other’s land.

In the study area, social assistance (Hirpha/gargaarsa) is another arrangement of mutual help for households. This social assistance arrangement is a mechanism for managing risks. In Mieso and Gumbi-Bordode district pastoralists supported displaced people and people who lost their property due to damages as a result of border conflicts and vulnerable sections of member villagers through hirph/gargaarsa arrangement. This implies that hirpha/gargaarsa is one of the mechanisms in which vulnerable people are supported because of customary laws urge mutual support systems. Confirmatory with the understandings generated from participants of focused group discussion, one study in Madda Walabu, argued that Hirpha is the main coping strategy for resilience from shocks and extensive support system for specific vulnerable members of their community such as orphans, the disabled, and women with many unproductive children [29].

Component three was labeled ‘public arrangements’ with high loadings for three of transfer aspects: food transfer from public work project/program (FOODPW), cash transfer from permanent direct support (12 months) program (CASHPER12), and food transfer from permanent direct support (12 months) program (FODTER12). They seem to be more helpful in response to income and food insecurity shocks. Public arrangements are interventions or mandates of the government to provide (social) insurance programs for risks such as unemployment, old-age, work injury, disability, widowhood, and sickness. On the other hand, governments have a whole array of instruments to help households to cope after a shock hits, such as social assistance, subsidies on basic goods and services, and public work programs [30]. Public arrangements for dealing with risk came into being with the development of the modern welfare state but are relatively scarce and have very limited coverage in the developing world for fiscal and other reasons. When informal or market-based risk management arrangements do not exist, break down, or are dysfunctional, the government can provide or mandate social insurance programs for risks such as unemployment, old-age, work injury, disability, widowhood, and sickness [31]. Institutional and governance risks refer to those posed by interacting with financial institutions, the government (regulatory environment), and conflict. Poor governance may affect the capacity of people to access and maintain assets, services, and utilities. It may also lead to increased transaction costs associated with investments.

In the study area, the most widely used public arrangements are limited to a productive safety-net program. The Productive Safety Net Programme (PSNP) in Ethiopia was set up in 2005 by the government as part of a strategy to address chronic food insecurity. The PSNP provides cash or food to people who have predictable food needs in a way that enables them to improve their livelihoods and therefore become more resilient to the effects of shocks in the future [32]. PSNP was launched to smooth consumption of chronically food insecure households by providing transfers of cash and/or food during lean months to address both the immediate and underlying causes of food insecurity.

As per the result from key informants, benefiting from a productive safety net program of social protection is difficult due to bias and corruption on the poor to be included and part of PSNP. This was mainly correlated with the lack of transparency in client selection from local governments, development agents, and expertise working on food and nutritional security position in the districts. Moreover, one of my key informants (development agent) serving on the position of animal science at kebele/sub-district level seriously pointed out the challenges they faced from beneficiaries and local government agents during the implementation of PSNP particularly on the selection of target group. From the side of households/communities, most households refused to register their wealth correctly and increase the number of family members for the sake of grasping PSNP opportunity. Whereas, unfair use of power by members of local government working at the community level that, resulted in the exclusion of poor people from PSNP benefits. This means that local leaders and members of the governmental body decided beneficiaries without the active involvement of the community. The result of discussions of focused group discussion and from most focused group discussion showed that relational and favors approaches/arrangements in the productive safety-net program together with lack of community participation and political intervention in the productive safety-net program considered as a challenge that undermined the possibilities of poor households’ inclusion.

Along with this, the study that was undertaken by Weltaji et al. [33] indicated that the practice of PSNP was challenged by a lack of monitoring and evaluation of structures, low payment, and limited awareness of beneficiaries. While, the study from Berlie [34] argued that premature graduation, lack of transparency in targeting, and delay transfer of safety nets were the major challenges encountered by the beneficiary female-headed households. Poor geographical, administrative, and community targeting and also the process of targeting the poor is froth with nepotism, corruption as demonstrated by the high inclusion ratio of non-poor households in the program [35]. Other challenges that negatively affect the program include weak institutional linkages and a lack of active community participation in the decision-making process.

3. Conclusion

In this chapter institutional traps that caused social risks and institutional arrangements for social risk management in pastoral and agro pastoral areas has examined thoroughly. In view of that, governance failures, institutional disincentives, elite’s exploitations, and inefficiency were explored as major institutional traps causes of social risks. Risks of human death, loss of property and new version of gun attacks against people and a long run cumulative effects of socio-political instability, border issues, government armed forces attacks and lack good governance has intensified and resulted for over 1 million Oromo people displacement from Somali regions and Djibouti in general and thousands of people displaces, more hundred injured and deaths of many people was also evidenced in the study area.

To manage such social risks, households in the study area used an informal, market, and public arrangement. The findings imply that institutional arrangements are crucial interventions in managing social risks. Thus, this study suggests a well-designed institution and institutional arraignments for ensuring tenure security and removal of the underlying sources of social risks and challenges thereby help the creation of sustained social protection in the area.

In this regard, future research should focus on exploring a more sustainable social risk management strategy through institutional perspectives and could investigate how social risk management arrangements be institutionalized in the day to day life from a dynamic perspective.

Conflict of interest

The authors declare no conflict of interest.