Financial support from the Deutsche Forschungsgemeinschaft (DFG) under the grant ‘Driving Forces of Rural and Distributional Change in Sub-Saharan Africa: The Cases of Burkina Faso, Ghana, and Uganda’ and the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) is gratefully acknowledged. In addition, the GTZ provided very helpful assistance during a research visit in Burkina Faso. We are also indebted to Michael Grimm and an anonymous referee for useful comments.
Shocks, Structural Change, and the Patterns of Income Diversification in Burkina Faso*
Version of Record online: 11 MAR 2009
© The Authors. Journal compilation © African Development Bank 2009
African Development Review
Volume 21, Issue 1, pages 36–58, April/Avril 2009
How to Cite
Lay, J., Narloch, U. and Mahmoud, T. O. (2009), Shocks, Structural Change, and the Patterns of Income Diversification in Burkina Faso. African Development Review, 21: 36–58. doi: 10.1111/j.1467-8268.2009.00202.x
- Issue online: 11 MAR 2009
- Version of Record online: 11 MAR 2009
Abstract: This article investigates changes in income diversification patterns for the case of Burkina Faso between 1994 and 2003. Contrary to common beliefs, our empirical analysis shows that rural households are not increasingly diversifying their income portfolios. Beyond insuring against and coping with weather shocks, diversification behaviour reflects structural change. Higher returns to agricultural activities, in particular in the cotton and livestock sectors, appear to be the root cause for less non-agricultural diversification and some of our findings hint at better opportunities in the non-farm sector. Yet, average returns in the non-farm sector appear to remain relatively low and migration increasingly turns into a desperation-led strategy. Overall, structural change seems to be biased in favour of richer households. Regarding responses to droughts, we confirm earlier findings, especially that the poorest households are hit particularly hard, being forced to sell livestock, which is often their only asset.