Burkina Faso

Burkina Faso, as a country of study, is of particular interest as it is one of the most economically underdeveloped countries in the world, with a per capita gross domestic product (GDP) of $704 USD in 2014 and an overall majority living in rural areas. A low level of education and employment, particularly among women, characterize these rural areas. The national level of literacy of men is twice that for women, whereas female literacy is less than ten per cent in the rural areas. The institutions are still underdeveloped and access to social services is scarce. There are inequalities in terms of who has access to these scarce services. Those who need social services the most (such as the poor in rural areas) have less access to it acording to estimates from the National Institute of Statistics and Demography (INSD, Institut National de la Statistique et de la Démographie) of Burkina Faso. This has led to urbanization. The urban areas move towards service and low-level manufacturing, while rural areas continue to be dominated by small-scale subsistence farming. Burkina Faso is a landlocked country in West Africa, as presented by the Figure.

Irrigation systems for agriculture in the country are lacking, which makes the agricultural sector highly weather dependent. Despite these harsh conditions, the agricultural sector constitutes about one third of its gross domestic product and employs around 80 per cent of the working age population. The principal subsistence crops cultivated are mainly sorghum, millet, and maize. Maize is also used as cash crop. Otherwise, cotton is the main cash crop followed by peanuts, sesame, cowpeas, and paddy rice (which is cultivated in some restricted areas of the country). Due to the climate, most of the population of Burkina Faso is concentrated in the center and south of the country, which is also why the northern regions are the poorest. The households are credit constrained through the limited access to formal financial services. However, in the households with access to credit, it is usually the heads of the households, mostly men, who have this access. This implies that gender norms are still persistent in the country. Estimates from INSD show that on average, there are approximately six children born per woman, with a life expectancy estimated to be between 57 and 59 years old. INSD further estimates that around 50 per cent of the population is under 20 years old. This demographic trend, together with the large share of urbanization, will increase the competition for urban jobs, creating challenges for the institutions to create more opportunities in the urban, non-agricultural occupational sector. As the institutions are still underdeveloped, an individual’s willingness to take risk in order to seek occupational opportunities increases.

Burkina Faso and its neighboring countries have experienced major climate changes in the past decades in terms of very warm periods and droughts. If this trend were to continue, in combination with high population growth, it would have a very large economic impact. This includes reduced access to food and water. Food and water scarcity will also lead to health issues because of the lack of nutrition and sanitation, giving rise to infectious diseases. Estimates from INSD show that around 43% of the individuals in Burkina Faso suffered some form of food insecurity at certain times in 2014. It is considered that mothers and children are those with less resilience to shocks; if a mother were obliged to provide for her child through, for example, having access to water, it implies less time put towards labor.

In summary, these effects could, in the future, cause global migrant flows due to the salient uncertainty disrupting the livelihoods of populations, not just in Burkina Faso but the rest of sub-Saharan Africa as well. Therefore, it is of utmost importance to understand what determines and shapes individual risk preferences and, hence, decision making over time.