Economic SelfReliance

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Economic Self-Reliance

• Paul C. Godfrey
• Marriott School of Management
• Spring 2005

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Three Case Studies

• Alan
• Honduran
• Consulting engineer- business owner
• Owns home
• Multiple income sources
• Player in local construction markets

• Wilhelm
• East German
• Factory worker
• Ample apartment, food, and luxuries
• Multiple job training opportunities
• Cynical about capitalist system

• Jonas
• Honduran
• Electricians assistant
• Lives in cement block addition
• Provides family income
• Concerned about future education

What does it mean to be economically self-reliant?
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The grounding The natural environment

• Geography
• Climate
• Natural Resources
• Accessibility

Natural Environment
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An important intermediary The social context
Social Context

• Government Institutions
• Economic Markets
• Religious/ Community norms
• Family Structure

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The final element Individual characteristics

• Individual Initiative
• Tangible Asset Stocks
• Intangible Asset Stocks
• Risk Management

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Labor Frugality Economic Self-Reliance
LABOR
FRUGALITY
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Individual Initiative

• The degree to which individuals perceive
  themselves as key actors in their economic lives

• Two elements define

Individual Initiative
Desire (Motivation, Perseverance)
Ability (Self-Efficacy, Responsibility)
The Necessary Condition
The Sufficient Condition
Initiative puts the self in Self-Reliance
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Tangible Assets

• The level of excess tangible resources and the
  propensity to accumulate more

Tangible Assets
Non-Cash
Cash Monetary

• Savings
• Accumulated equity
• Liquefiable assets

• Food stocks
• Shelter
• Clothing and effects

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Intangible Assets

• The level of knowledge, training, and skill and
  the propensity to accumulate more

Intangible Assets
Informal Assets
Formal Assets

• Educational attainment
• Degrees
• Certificates
• Formal training

• Valuable skills
• On-the-job training
• Knowledge
• Experience

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Risk Management

• The degree to which risks are controlled or
  mitigated through insurance and
  insurance-substitutes

Risk Management
Informal Mechanisms
Formal Mechanisms

• Government programs
• Private contracts
• NGO infrastructure

• Personal resilience
• Family relationships
• Social networks

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Economic self-reliance and human growth
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Key Questions
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How does the nested model work?

• What are the key relationships between the
  different levels in the model?
• How does activity at one level affect the other
  levels?
• Are movements bi-directional?

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How do intervention paths differ?
ESR model
ESR interventions

• The ESR model suggests 24 paths for interventions
• A hypothesis Initiative must be 1 or 2 to
  promote ESR

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Current Research Initiatives

• Exploratory case studies
• 30 individuals
• 7 countries
• Develop robust ESR instrument
• Validate ESR instrument
• Refine ESR instrument through detailed case
  studies
• Multiple individuals
• Multiple cultural settings
• Use instrument to
• Assess ESR baselines
• Measure impact of interventions

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Questions and Comments