Working Paper
From Humanitarian Assistance to Poverty Reduction in Angola

The list of illnesses afflicting Angolan society is a long one: political instability, civil war, macroeconomic mismanagement, and the desperation born of poverty. A profound sense of uncertainty afflicts all levels of society-the government (and its opponents), entrepreneurs and rural and urban communities. Ordinary citizens are deeply sceptical of the country's political, economic, and social institutions, and regard high inequality as a sign that economic policy is largely run for the benefit of the wealthy. Uncertainty undermines government institutions, discourages long-term investment by entrepreneurs, and hinders community development. Therefore both uncertainty, and high and rising inequality, create low levels of trust in social institutions. The resulting loss of social capital undermines both economic performance and the effectiveness of national, sectoral, and community-level interventions in poverty reduction. Restoring confidence in social institutions will take considerable time. But some war-torn societies-Mozambique in particular-have shown that it is at least possible to make a start.