Public arrangements for dealing with risk are relatively scarce and have very limited coverage in the developing world for economic and other reasons. For this reason, there is a great deal of public intervention in risk coping. With this new risk management strategy, the Bank would offer developing countries, in consultation with their poor communities, help in tailoring their social protection plans to fit their own assessment of where they might be vulnerable. It may be they need access to basic medical care, or clean drinking water, or ways to stop their farms being flooded every year. If we can help them be proactive about reducing their exposure to risk in the first place, communities can do more to shield themselves from preventable misfortune, and thereby lead more secure lives.
Risk management can take place at different moments both before and after the risk occurs.
The goal of proactive measures is to prevent the risk from occurring, or, if this cannot be done, to mitigate its effects. Coping also requires government support since poor people are typically less able to weather crises on their own and, therefore, often experience irreversible negative effects. For this reason, there is a great deal of public intervention in risk coping. Reducing Risk Reducing the probability of downside risk is a powerful instrument of social risk management. Many risk reduction efforts remain outside the scope of social protection, such as maintaining macroeconomic stability, creating sound financial markets, adopting growth-oriented policies, and establishing preventive measures against natural disasters.