Abstract

In times of crisis, risk pooling can enhance the resilience of individuals, households, and communities. Risk pooling systems are most effective when their participants adhere to several principles: (1) participants should agree that the pool is for needs that arise unpredictably, not for routine, predictable needs; (2) giving to those in need should not create an obligation for them to repay; (3) participants should not be not expected to help others until they have taken care of their own needs; (4) participants should have a consensus about what constitutes need; (5) resources should be either naturally visible or made visible to reduce cheating; (6) individuals should be able to decide which partners to accept; and (7) the scale of the network should be large enough to cover the scale of risks.

Reference

Lee Cronk (Rutgers), “Design principles for risk-pooling systems”, IAST General Seminar, Toulouse: IAST, September 17, 2024, 11:30–12:30, room Auditorium 4 (First floor - TSE Building).