Policy Research Working Paper 10243

# **Abstract**

The Sudanese economy has faced several shocks over the years—sometimes resulting in devastating impacts on the economy and the welfare of Sudanese households. Poor households are often particularly vulnerable to shocks. The extent of the impacts of shocks on household welfare depends on the nature and severity of the shocks as well as households’ capacity to manage its risk of exposure to shocks ex ante and/or mitigate the impact of shocks ex post. This paper applies this framework to examine the impact of shocks on the welfare of Sudanese households and explore coping strategies typically utilized by households to mitigate the negative effects of shocks. The paper uses the 2009 National Baseline Household Survey (NBHS) and the 2014/15 National Household Budget and Poverty Survey (NHBPS) to document the main types of shocks that Sudanese households are exposed to and describe the profile of Sudanese households likely to be vulnerable and/ or resilient to shocks. To complement this analysis, the paper uses the most recent round of the data collected in 2014/15 (containing information on idiosyncratic shocks) together with data on covariate shocks such as rainfall and conflict obtained from other sources to estimate the impact of shocks on household welfare. Since the impact of shocks on household welfare is likely to be multidimensional, various indicators of household welfare such as consumption, poverty status, assets, dietary quality, and diversity are considered in the paper. Results from the analysis are used to highlight the state of social protection in Sudan and discuss the need for an expansion of the existing system. The prevalence of shocks in Sudan is most common among poor, agricultural, and rural households. Floods/droughts have the largest negative effect on the welfare of Sudanese households. The large negative effects of shocks on the welfare of Sudanese households (particularly those with low capacity to cope with shocks) highlight significant limitations in households’ ability to fully mitigate the impact of shocks.

This paper is a product of the Poverty and Equity Global Practice. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at aetangndip@worldbank.org; stouray@worldbank.org.

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