**1. Introduction**

Global concerns about multiple risks and uncertainties regarding market volatility, natural disasters, climate change, conflicts, forced displacement have had exacerbated by fears of potential disruptions [1]. In Sub-Saharan Africa specially Ethiopia, social risks have get apparent as one of the most human tragedies. Concerns about the social risk of conflict and mass migration, as well as the most heinous human tragedies, have recently surfaced. Many of the rural peoples in Ethiopia are in a state of crisis. The worst humanitarian crisis and terrible tragedy in Ethiopia are linked to institutional and structural problems for which the government is responsible. Government is responsible in this context means that government corrections may or may not really be a solution or failing to resolve a growing long tradition of institutional problems. These longstanding failures were referred to as institutional traps.

Institutional traps understood as an inefficient but stable institution (norm) [2]. The principal cause for the rise of institutional traps entails institutional inadequacies, security and leadership shortcomings, policies and regulatory inefficiencies, market and institutional failures [2, 3]. These traps, in turn, result in risks particularly in the areas where there is high insecurity. In view of that, Ethiopia's already fragile government systems have been plunged into chaos. As a result, Ethiopia is in a security bind, unable to guarantee basic human rights and address its people's immediate needs. In this sense, Ethiopia's greatest crises have been caused by institutional failures, the majority of which are the government's fault. Typical causes of governance failure are institutional and structural problems, which can often be traced back to a failed institutional reform (norm).

Traditional public policy and welfare economics have assumed that natural disaster, market failures and health problems are common, requiring the intervention of government in order to protect the society. Becks' [4], Risk Society Theory, natural disasters and health problems represented a major concern for the population and society. In this regard, the Cultural theory of Douglas, postulates that "risks caused by structural forces" [5], the governmentality perspective of Foucault [6], conceptualized risk from a new style of governance in modernity. In this regard risk is mainly understood as a concept entirely socially produced.

In the contemporary risk literature, the sources of social risks and risk management have not been well conceived and speculated from institutional perspective explaining institution as rule of the game and institutional arrangement as an intervention for social risk management. This implies that the study of social risks within the notion of institutionalism has been coming behind. Institutions are a part of the social order of society and they govern behavior and expectations of individuals, while at the same time they build social structures and improve social development. According to North [7], throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange. Fair institutions ensure that all people have equal rights and a chance to improve their lives, and access to justice when they are wronged [8]. Contrary, study from Latin American and Caribbean (LAC) countries show that the unmet demands of a large share of the population fuel an institutional trap that jeopardizes the sustainability of the social contract.

Most studies carried out in eastern Ethiopia, focused on the risks of climate change, conflict, food insecurity. Moreover, poor governance and weak capacity were also contributed to slow progress of drought-risk management in Ethiopia [9]. In study area smallholder households were extensively exposed to social risks of food insecurity and production loss [10], illegal and forced displacement and migration CISP [11]; price rises, illness, job loss, underemployment, deaths, and injustices. Empirically, in social protection landscape of Ethiopia, studies mainly focused PSNP of public arrangements of social risk management. Cash- and food-for-work Productive Safety Net Programme (PSNP), which constitutes a key part of the government's Food Security Programme (FSP). Nevertheless, the PSNP is not the only policy arrangement that aims to provide a form of social protection in rural Ethiopia [12]. The challenges in operationalization of national social protection policy in Ethiopia compounded with inadequate coordination arising from institutional capacity imbalance. This, in particularly, hampered by a lack of limited vertical interface, frequent changes of institutional arrangements, and imbalance between government agencies [13]. Overall, few studies have examined the institutional trap factors of social risks and social risk management arrangements.

*Sources of Social Risks and Risk Management Arrangements DOI: http://dx.doi.org/10.5772/intechopen.108037*

This book chapter argue that institutional traps caused from longstanding failures if not well managed can easily be transformed into social risks. Given this, the source of social risks in the emerging literatures has not explained by an institutional trap factors. Yet, if it is possible to be acquainted with a persistent institutional force, it can be considered the "institutional trap as a cause of social risks. The solution to this crisis is to design effective institutional arrangements (social risk management), but there is no consensus on what those institutional arrangements are. Moreover, the failure to establish, devise, and deliver adequate social protection solutions necessitates an understanding of contemporary institutional causes of social risks as well as the role of institutional arrangements in social risk management. Conceptualizing and assessing the matters of social risks from institutional perspectives may provide a means for simultaneously managing the multiple social risks through institutional arrangements would be significant to get lessons for the study area. The contributions of the present paper thus to provide an empirical account of institutional dynamics that may explain the underlying causes of a social risks and risk management arrangements in Ethiopia. The objective of this chapter thus examines the origins of societal risks, risk management arrangements, and methods for urging institutions to manage risk in Ethiopia.
