Health Policy 80 (2007) 218–235
Traditional risk-sharing arrangements and informal social
insurance in Eritrea
GebreMichael Kibreab Habtom
, Pieter Ruys
Tilburg University, Development Research Institute, The Netherlands
University of Asmara, P.O. Box 1220, Asmara, Eritrea
Tilburg University, Center for Economic Research, P.O. Box 90153, 5000 LE Tilburg, The Netherlands
In Eritrea neither the state nor the market is effective in providing health insurance to low-income people (in rural and informal
job sector). Schemes intended for the informal sector are confronted with low and irregular incomes of target populations and
consequently negligible potential for proﬁt making. Because of this there, are no formal health insurance systems in Eritrea
that cover people in the traditional (or informal) sector of the economy. In the absence of formal safety nets traditional Eritrean
societies use their local social capital to alleviate unexpected social costs. In Eritrea traditional risk-sharing arrangements are
made within extended families and mutual aid community associations. This study reveals that in a situation where the state no
longer provides free public health services any more and access to private insurance is denied, the extension of the voluntary
mutual aid community associations to Mahber-based health insurance schemes at the local level is a viable way for providing
modern health services.
© 2006 Elsevier Ireland Ltd. All rights reserved.
Keywords: Community-based insurance (CBI); Risk sharing; Solidarity; Reciprocity; Eritrea
there are no formal health insurance sys-
tems that cover people in the traditional (or informal)
Corresponding author. Tel.: +31 13466 2264;
fax: +31 13466 3280.
E-mail addresses: firstname.lastname@example.org (G.K. Habtom),
email@example.com (P. Ruys).
Tel.: +31 13466 2052; fax: +31 13466 3280.
Eritrea is an East African country, which is bordered with
Ethiopia in the south, with Sudan in the north and the west, with
Djibouti in the southeast, and with the Red Sea in the east. Eritrea got
independence from Ethiopia in 1993 after 30 years of armed strug-
gle. Eritrea’s population is estimated to be 3.7 million with annual
sector of the economy. Social insurance is still conﬁned
to a minority of the population (for e.g. state employees,
members of the armed forces, and employees of large
population growth rate of 2.6% [61,62]. The population pyramid fol-
lows an early development pattern: 43% of the population is under
15 years old, 6% above 65 years old and nearly 70% of the popula-
tion is composed of children and women in child-bearing age [1,2].
About 52% of the Eritrean population is under 18 years old and 17%
are under 5 years old . Eighty percent of the people live in rural
areas, and the population density ranges from 36.3 to 40.6 people
per sq. km . Agriculture is the main stay of the Eritrean economy
whereby 70% of the population depend for its livelihood; about 30%
of Eritreans are semi-nomadic or agro-pastoralists .
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