In the absence of adequate support from formal social safety nets, rural households in Ethiopia have developed collective risksharing strategies to buffer them against adverse livelihood shocks, thus building their resilience capacities. Social capital and network based indigenous mutual support arrangements are the most important strategies that are institutionalized and widely practiced among rural households for centuries in Ethiopia to support households to cope with shocks. Nonetheless, resilience research and rural poverty alleviation policies have yet to fully recognize and embrace social capital as a tool to tackle poverty and vulnerability. Robust policy and academic studies on the role of indigenous welfare system with implications for social development policy making in Ethiopia are lacking. Using ethnographic techniques and simple descriptive statistics, we studied indigenous mutual support systems and how they shape the resilience trajectories of rural households against livelihood shocks within two selected PAs of Babille district of Oromia region. We found that mutual support practices are very effective in building coping resilience of households by smoothing consumption shocks. However, the traditional coping mechanisms often fail when the shock is systemic or covariate, when shocks last longer, and when a household has low level of human or finical capital.

Safety nets in Ethiopia are targeted and delivered in a context in which informal social capital practices also operate. But the role of social relations is largely overlooked in welfare programming. Understanding how social capital is mobilized and under which condition it enhances or constrains social safety net targeting may inform policy to design sustainable and inclusive welfare programs to improve household resilience. Using an ethnographic case study design, we studied the role of social capital in the implementation of a welfare intervention. Data were collected through observations and interviews with 30 households. Besides, data on household social network characteristics were collected using semi-structured interviews. The result suggested that greater access to social capital by a household enhances the efficiency of safety net targeting and delivery. Positioning the social transfer instruments within the broader sets of community social arrangements can optimize the allocation of scarce safety net resources and improves community relationships.

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