The New Role of Social Security in Rural Areas of Developing Countries

Abstract

In the 1990ies the ultimate target of social security has been widened: Social security aims at protecting people against life risks and helping them to take advantage of social and economic opportunities. Existing social security systems in rural areas of developing countries are often "second best solutions" and need reforms. Institutional innovations such as micro insurance schemes are a promising way of improving the risk management of rural households. The example of community based health insurance schemes in Senegal shows, that rural households can be successfully integrated into insurance schemes. This allows a better access to health care and is an essential prerequisite for increasing labour productivity. Moreover, it offers in the mid to long term the chance to shift to more risky but also more profitable production systems. The discussion of the appropriate design of social security in rural areas of developing countries has yet started. Many questions are still open as e.g. the willingness of rural households to pay for insurance products, the optimal design of micro insurance schemes and the measurement of the effects of social security on productivity. Agricultural economics research can make substantial contributions in answering these questions.