Risk and vulnerability analysis in World Bank analytic work : FY2000-FY2007

This paper takes stock of the World Bank's risk and vulnerability analysis from FY2000 to FY2007. It complements recent assessments of Social Protection and Labor (SP&L) sector's lending and analytic activities on labor markets, pensions, social safety nets, and social funds. The review of 155 papers shows how risk and vulnerability have become part of the Bank's understanding of poverty as a dynamic concept, which considers not only the characteristics of poor households at a specific point in time but also of those at risk of becoming poor following specific shocks (e.g., from a sickness in the family to the effect of a natural disaster). In terms of policy, the paper highlights the importance of measures to prevent vulnerable groups from falling into poverty and to help them cope with the aftermaths of shocks. The Social Risk Management (SRM) strategy provides a conceptual and methodological framework for the paper, which highlights the richness and diversity of risk and vulnerability practices in the Bank's work by region and presents a variety of best practices. It points to rising levels of insecurity among poor and vulnerable groups despite global progress in reducing poverty, and it identifies strong linkages between extreme poverty and risk in low income countries. Addressing risks for vulnerable groups hence emerges as a key concern for inclusive and sustainable globalization. It concludes by calling for continuously improving the treatment of risk and vulnerability in poverty assessments, for complementing these analyses with freestanding studies of specific risks, for improving the collection of relevant data, and for developing the policy use of the analyses conducted.