The research unit will pursue an integrated research approach that aims at maximizing interaction among the various fields of economics. This integration is to be achieved through two types of projects, namely (i) base projects and (ii) special projects (see Figure 1). The base projects aim at the establishment of the theoretical, methodological and empirical foundation of the research that will facilitate the implementation of the special projects. The organizational concept of the base projects is such that one member of the research unit takes the lead while the remaining members will participate. In contrast, the special research projects follow a tandem approach, i.e. combining subject matter expertise with country experience. The special projects will generate a better understanding of the various on-farm and off-farm sources of risk and their effects on the rural households’ vulnerability to poverty.

Two base projects are proposed. The first is a comprehensive theory and methodology subproject (#1). The major objective of this conceptual and empirical project is to work towards the development of conceptually sound and empirically tractable measures of vulnerability that also take into account the endogeneity of household structures as well as intra-household dynamics. This work will first of all provide an input for the design of a specialized household survey that allows for a better analysis of vulnerability than currently available surveys. The developed framework for the measurement of vulnerability will then be applied using existing household surveys from Thailand and Vietnam, as well as the newly created surveys, to provide an assessment of vulnerability in these rapidly developing economies. Here, the role of changing household structure and intra-household dynamics on vulnerability to poverty will be a specific focus of the empirical work. Furthermore, the output of this project will form an important basis for the work of other projects within the research unit, which focus on specific aspects and countries.

The project leader of the first base project will be Prof. Klasen of Göttingen University. In addition to advancing the conceptual and measurement issues, the project leader will also integrate the other members of the research unit through a series of workshops. The idea of this conceptual and methodological subproject is to develop and apply a framework for the measurement and interpretation of vulnerability and poverty that would then be used in the various other projects in the research unit that focus on specific issues and countries. The project activities will include a start-up workshop to be conducted in either of the two countries. The aim of this workshop will be to integrate the national research partners in the project. In Vietnam, the major partner organizations will be the Institute of Agricultural Economics of the Ministry of Agriculture, the Central Institute for Economic Management (CIEM), and the country office of the United Nations Development Programme (UNDP). In Thailand, major partners will be the Universities Chulalongkorn, Kasetsart, and Mahidol. Members of the research unit already maintain close research collaboration with all of the above mentioned partners.

The second base project (#2) will facilitate the organization and conduct of surveys among rural households in three provinces in Thailand and Vietnam respectively. The surveys will generate a panel data set from a total of 5,000 households, which will facilitate the integration of the three subject areas participating in the project, namely agriculture, development economics and finance, and economic geography. The project leader will be Prof. Waibel of Hannover University. Base project 2 will also supply data to all projects including base project 1 and carry out additional data analysis combining the data sets across countries and scientific disciplines. The joint questionnaire of the different participating scientists will elicit information on the households’ socio-economic status, intra-household arrangements, their resource base, and various income generating activities including on-farm. The households will be randomly selected and interviewed twice during the first three-year project. For further details see project proposal of base project 2.

Special projects are those carried out by individual members of the research unit (see Figure 1). PhD students enrolled at the participating universities will carry out this research and will be supervised by the participating scientists and logistically supported by the project manager of base project 2. The special projects will cover three broad thematic areas, namely, agriculture, credit and finance, and economic geography (see Research group ). Furthermore, each thematic area will consist of two projects, i.e. one in Thailand and one in Vietnam.

The first special project on agriculture will focus on intra-sectoral issues of farm production and marketing including agricultural factor and product markets of vulnerable rural households. The second special project on finance will concentrate on inter-personal and inter-temporal aspects of vulnerability, i.e. intra-household resource transfers and credits as well as inter-temporal aspects like savings and investments. Finally, the third special project will focus on inter-sectoral relationships such as off-farm income and inter-regional issues such as migration, covering the regional dimension of vulnerability. The social dimension of vulnerability, including issues like changes in fertility and health, will be covered by base project 1 and related data collection will be included in base project 2.

Two scientists respectively will supervise these projects, with alternate leadership by country and with a slightly different focus. For example, the focus of the agricultural project in Thailand will be on market risks relative to the production sources of vulnerability due to the high degree of market integration of the farming systems. In Vietnam, the agriculture project will focus on the production risks, with consideration of the market aspects. The project leader of the Thailand project will be Prof. Schmidt while the project leader of the Vietnam project will be Prof. Waibel. Likewise, the project on “finance” will look at the role of the financial sector in absorbing external shocks. Prof. Menkhoff will lead the project on Thailand while Prof. Klump will supervise the corresponding project on Vietnam. Again, the focus of these two projects will differ according to divergence in the degree of integration of rural households in the financial markets. For example, in Vietnam the role of informal credit markets will play a more dominant role.

Finally, in the field of economic geography the same model applies. In Vietnam, Prof. Revilla Diez will lead the project that investigates in a planned economy. In Thailand, Prof. Schätzl and Prof. Liefner will focus on the analysis of the heterogeneity of local development initiatives in a market economy. These are expected to differ markedly on the provincial or possibly even on the village level.