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The Vulnerability and Resilience of Households in Vanuatu and Solomon Islands to Global Macroeconomic Shocks

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The Vulnerability and Resilience of Households in Vanuatu and Solomon Islands to Global Macroeconomic Shocks THE VULNERABILITY AND RESILIENCE OF HOUSEHOLDS IN VANUATU AND SOLOMON ISLANDS TO GLOBAL MACROECONOMIC SHOCKS A thesis submitted in fulfilment of the requirements of the degree of Doctor of Philosophy (Economics and Finance) by P. Lachlan McDonald MIntRel. University of Melbourne BEcon. (Hons) / BCom. Monash University School of Economics, Finance and Marketing College of Business RMIT University March 2014 ii DECLARATION I certify that except where due acknowledgement has been made, the work is that of the author alone; the work has not been submitted previously, in whole or in part, to qualify for any other academic award; the content of the thesis is the result of work which has been carried out since the official commencement date of the approved research program; any editorial work, paid or unpaid, carried out by a third party is acknowledged; and, ethics procedures and guidelines have been followed. P. Lachlan McDonald 4th March 2014 RMIT University iii ACKNOWLEDGEMENTS So many people have assisted me with this research thesis. I’ve been incredibly privileged to have had such a large and supportive group of people around me. This research began as an idea between my supervisor Associate Professor Simon Feeny and my former manager at Oxfam, May Miller-Dawkins. I thank them for taking a chance on an ex-Central Banker and giving me the opportunity to manage this research project. I also need to thank the many people that have been involved in this research in one way or another. I received considerable support from the fellow academic researchers and volunteers on the project and from the in-country Oxfam offices in both Port Vila and Honiara. Without their assistance I could not have organised the field work. I also want to thank the research teams who toiled in the field and tolerated a big-bearded Australian researcher with a vision. The teams did a spectacular job in assisting me collect the empirical data. This truly is a remarkable one-of-a- kind data set and without their assistance it could not have happened. I would also like to acknowledge the financial support of AusAID. The twelve communities surveyed were also incredibly gracious in their hospitality and willingness to participate in this research. I sincerely hope that the outputs of this research can improve the lives of these people and their compatriots. Importantly, I want to thank my supervisors, Associate Professor Simon Feeny and Dr Alberto Posso. I’ve enjoyed working together, travelling together and getting to know both of you better. You have also helped me deepen and broaden my knowledge of economics. Your guidance over the journey has been enormous. Thanks also to my parents, who have been ever-supportive throughout my studies. Finally, and most sincerely, I want to thank my wonderful partner, Emma Peppler. You have been a pillar of support throughout this journey. You’ve been instrumental in almost every facet of the project, from helping with the initial survey design, to being directly involved in numerous field trips and, ultimately, casting your legal-eagle eye over the finished product. Thanks for always being there when I’ve needed someone to talk to and thanks for putting up with me when I’ve been much less communicative. This truly would not have been the same project without you. Lachlan McDonald iv PUBLICATIONS AND AWARDS ORIGINATING FROM THE PRESENT THESIS Authored book chapters: • McDonald , L. “Coconut trees in a cyclone: vulnerability and resilience in a Melanesian context”, in S. Feeny (ed.) (2014), Household Vulnerability and Resilience to Economic Shocks: Evidence from Melanesia , Ashgate: London • McDonald, L., V. Naidu and M. Mohanty, “Vulnerability, resilience and dynamism of the customary economy in Melanesia”, in S. Feeny (ed.) (2014), Household Vulnerability and Resilience to Economic Shocks: Evidence from Melanesia , Ashgate: London • Clarke , M., S. Feeny and L. McDonald, “Vulnerability to what? Multidimensional poverty in Melanesia”, in S. Feeny (ed.) (2014), Household Vulnerability and Resilience to Economic Shocks: Evidence from Melanesia , Ashgate: London . Conference Papers: • McDonald, L. (2013) “Household Vulnerability to Poverty in Vanuatu and the Solomon Islands”, paper presented at the 9th Australasian Development Economics Workshop (ADEW), Australian National University, Canberra, June 2013. • Feeny, S. and L. McDonald (2013) “Multidimensional Poverty and Vulnerability in the Solomon Islands and Vanuatu”, paper presented at the Oceania Development Network (ODN) Conference on Addressing Inequality and Promoting Inclusive and Sustainable Development, University of the South Pacific, September, Suva, Fiji. Working Papers: • Feeny, S., L. McDonald, M. Miller-Dawkins, J. Donahue and A. Posso (2013) “Household Vulnerability and Resilience to Shocks: Findings from the Solomon Islands and Vanuatu', SSGM Discussion Paper 2013/2 . ANU College of Asia & the Pacific, School of International, Political and Strategic Studies, State, Society and Governance in Melanesia Program. • Feeny, S. and L. McDonald (2013) “Household Vulnerability and Resilience to Economic Shocks: Findings from the Solomon Islands and Vanuatu”, Oxfam Australia, Melbourne. Prizes: • 2013 Best Conference Paper by an HDR Candidate Award, School of Economics Finance and Marketing, RMIT University. v vi TABLE OF CONTENTS DECLARATION ........................................................................................................................... iii ACKNOWLEDGEMENTS ........................................................................................................... iv PUBLICATIONS AND AWARDS ORIGINATING FROM THE PRESENT THESIS ...............v TABLE OF CONTENTS ............................................................................................................. vii LIST OF FIGURES ...................................................................................................................... xii LIST OF TABLES ....................................................................................................................... xiii LIST OF ABBREVIATIONS ..................................................................................................... xiv ABSTRACT ...................................................................................................................................1 CHAPTER I – INTRODUCTION AND OVERVIEW ..............................................................3 1.1. Introduction ...........................................................................................................3 1.2. Vulnerability as a lens ...........................................................................................5 1.2.1. Vulnerability in development economics ..............................................................8 1.2.2. The essentiality of resilience ...............................................................................10 1.3. Vanuatu and Solomon Islands – an overview .....................................................12 1.3.1. The unique vulnerabilities of Vanuatu and Solomon Islands ..............................16 1.4. The effects of recent global macroeconomic shocks ...........................................20 1.5. The vulnerability and resilience of households in Vanuatu and Solomon Islands .............................................................................................................................24 1.6. An outline of this thesis .......................................................................................26 CHAPTER II – DATA AND METHODOLOGY ....................................................................29 2.1. Introduction .........................................................................................................29 2.2. Data ......................................................................................................................30 2.2.1. Household survey ................................................................................................30 2.2.2. Other sources of data ...........................................................................................34 2.3. Field work and sampling methodology ...............................................................34 2.4. Details of the communities surveyed ...................................................................38 2.4.1. Communities in Vanuatu .....................................................................................38 2.4.2. Communities in Solomon Islands ........................................................................40 vii CHAPTER III - MULTIDIMENSIONAL POVERTY IN VANUATU AND SOLOMON ISLANDS ......................................................................................................................................45 3.1. Introduction .........................................................................................................45 3.2. Literature review ..................................................................................................46 3.2.1. Poverty measures and their applicability to PICs ................................................46 3.2.2. Alternative measures of poverty in the Pacific context – the role for multidimensional poverty analyses .....................................................................51 3.2.3. Alternative approaches to poverty measurement: the Multidimensional Poverty Index (MPI) .........................................................................................................52
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