MUTUAL INSURANCE AS AN ELUSIVE CONCEPT IN TRADITIONAL RURAL COMMUNITIES

During the last two decades, economists have paid increasing attention to the role of informal risk-sharing arrangements as a privileged way through which traditional rural communities can achieve a significant degree of protection against income fluctuations and other hazards be yond their control. This article however argues that when they enter i nto such arrangements members of these communities are guided by a pri nciple of balanced reciprocity (they expect a return from any contribu tion or payment they make) rather than by a true logic of mutual insur ance. More precisely, they do not conceive of insurance as a game wher e there are winners and losers and where income is redistributed betwe en lucky and unlucky individuals. None the less, traditional agrarian societies have proven able to develop a restricted range of sustainabl e forms of mutual insurance that avoid the aforementioned problem.