Module 1: Poverty reduction with a livelihood focus
1.4: Arguments for a livelihoods perspective
1. Livelihood approaches and core principals of application
Livelihood approaches are conceptual frameworks that promote people-centred development. They are responsive and participatory, and they favour multidisciplinary and multilevel development interactions. Livelihood approaches generate a deeper understanding of the wide range of livelihood strategies pursued by people that poverty reduction measures address.
Livelihood approaches acknowledge the connections and interactions of the micro-cosmos of the livelihood of individuals, household and/or communities with the larger socio-economic, cultural and political context at the meso and macro levels. Livelihood approaches help to reconcile a holistic perception of sustainable livelihood with the operational need for focused development interventions. In other words, they give access to the complexity of poverty and livelihood while acknowledging the need to reduce complexity in a responsible way for drafting policies and designing programmes and projects.
The core principles underlying SL approaches are that poverty-focused development activities should be (Ashley & Carney 1999, p. 7):
- People-centred: sustainable poverty reduction will be achieved only if external support focuses on what matters to people, understands the differences between groups of people and works with them in a way that is congruent with their current livelihood strategies, social environment and ability to adapt.
- Responsive and participatory: poor people themselves must be key actors in identifying and addressing livelihood priorities. Development agents need processes that enable them to listen and respond to the poor.
- Multi-level: poverty reduction is an enormous challenge that will only be overcome by working at multiple levels, ensuring that micro-level activity informs the development of policy and an effective enabling environment, and that macro-level structures and processes support people to build upon their own strengths.
- Conducted in partnership: with both the public and the private sector.
- Sustainable: there are four key dimensions to sustainability - economic, institutional, social and environmental sustainability. All are important - a balance must be found between them.
- Dynamic: external support must recognise the dynamic nature of livelihood strategies, respond flexibly to changes in people's situation, and develop longer-term commitments.
Livelihood approaches can be applied to work with any stakeholder group. To be effective in poverty programmes the SL approaches must be underpinned by a clear commitment to poverty reduction, meaning that activities should be designed to maximise livelihood benefits for the poor.
Among the many approaches offered for livelihood-oriented development cooperation (see Hussein, 2002) we opt in this document for a blend between the UK Department for International Development (DFID) approach (Carney, Drinkwater, Rusinow, Neejes, Wanmali, & Singh, 1999) and the livelihood framework developed in the context of a collaborative Indo-Swiss research project on rural livelihood systems in semi-arid India (Baumgartner & Högger, 2004).
Framework for assessing core and context of livelihood systems
Module 2 of this document will introduce the two livelihood approaches on which the above graph is based.
2. More effective poverty reduction: Seven statements in favour of a livelihood focus
(1) Access to people's visions of "development and well-being"
People's visions of "development" are reflected in their livelihood strategies and in the livelihood outcomes they strive for. Thus "development" does not happen unless people participate in conceiving and realising "development". Each form of development cooperation therefore requires an adequate level of insight into and understanding of both the livelihoods addressed and the context with which they interact.
(2) Poverty reduction goes beyond material well-being
SDC's engagements in poverty reduction should enhance "the prospects of living a life in dignity". SDC's engagement is thus value-based. Living up to such a commitment requires a livelihood approach that can capture livelihood diversity in partner countries and provide operational guidance for conceiving and implementing poverty-oriented development support that takes livelihood diversity into account.
(3) Promoting coherence between poverty reduction concepts and definitions of poverty
SDC subscribes to the DAC definition and understanding of poverty, which are based on a capability approach (see Doc 1.2). Empowerment, understood as sustainable improvement of capabilities of the poor, thus becomes a key element of poverty reduction. Basically, capabilities are not given but acquired by human beings. Capabilities are embedded in livelihood systems. They become functional in pursuing livelihood strategies.
(4) Building on strengths and potentials - acknowledging contextual factors and forces
A livelihood focus in poverty reduction means to build systematically on strengths and potentials of the poor. A livelihood focus also acknowledges the role and impacts of contextual factors and forces resulting from policymaking, institutional change, external shocks and trends, etc. It therefore invites assessment of the extent to which the socio-economic, political and cultural context is conducive to alleviating poverty.
(5) Understanding multifaceted rationalities in people's decision making
Diversity of livelihood strategies is also a reflection of a diversity of rationalities guiding decision-making. Approaching poverty with a livelihood focus thus means examining explicit and implicit rationalities that shape livelihood strategies pursued by the stakeholders (Syöstrand 1992, Simon 1984).
(6) Perceptions of sustainability and sustainable livelihood are context-bound
Poverty reduction aims at more sustainable livelihood. The generally accepted definition of sustainable livelihood reads: "A livelihood is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future, without undermining the natural resource base" (Carney et al 1999, p.8). To become an operational guideline in development collaboration this definition also requires a context-related interpretation of sustainability that acknowledges the role of time, space, culture.
(7) Culture and spirituality as constitutive elements of development
Livelihood approaches help to integrate culture into development thinking and practise as an essential dimension. The holistic approach of a livelihood focus provides insights into "how culture matters" without promoting cultural determinism of development.
Spirituality, reaching beyond religious reference frames, forms part of inner development of livelihood. Worldviews, attitudes and goal setting, or livelihood strategies in general, are also informed by spiritual dimensions (Baumgartner & Högger 2004. Compare also Holenstein 2005). People-oriented development thus calls for approaches that further our understanding of the roles of these aspects of sustainable livelihood.
... it follows that an adequate and well-defined livelihood focus is a crucial pre-condition for aid-effectiveness!
3. Frequent misunderstandings regarding a livelihood orientation in development collaboration
Holistic analysis versus focused interventions?
CARE submitted the following statement to the DIFID's 1999 National Resources Advisers Conference (NRAC): "A frequent misconception concerning the livelihoods approach is that holistic analysis must necessarily lead to holistic or multi-disciplinary projects. Although projects with a strong livelihoods approach may often work across a number of technical disciplines, applying a livelihoods approach does not preclude projects being largely sectoral in nature. What is important is that a holistic perspective is used in the design to ensure that cross-sectoral linkages are taken into account, and that the needs addressed in project activities are really those which deal with the priority concerns of households and build upon the experience and traditional coping mechanisms they have evolved" (Drinkwater & Rusinow, 1999, p. 9).
Oxfam illustrated the above statement using a convincing metaphor: "A useful analogy is the 'acupuncture approach': a good acupuncturist uses a holistic diagnosis of the patient followed by very specific treatment at key points. Holistic diagnosis does not mean needles everywhere!" (Oxfam, NRAC 99, cited in Ashley & Carney, 1999). The assessment of the outcome of such a focussed treatment, however, calls again for a holistic perception, especially also for tracing unintended effects. The two statements illustrate the need for a holistic perception in development planning and as well as in monitoring the outcome and impact of development interventions. Compare Doc 3.5.
Livelihood approaches: Are they models - theories - frameworks?
Livelihood approaches, be it from DFID or other agencies (see Hussein, 2002), do not offer models or theories of livelihood systems. Instead, they suggest conceptual frameworks in line with Rapoport's (1985) definition and understanding:
"Conceptual frameworks are neither models nor theories. Models describe how things work, whereas theories explain phenomena.
Conceptual frameworks do neither; rather they help to think about phenomena, to order material, revealing patterns - and pattern recognition typically leads (thereafter) to models and theories".
Conceptual frameworks of livelihood systems, therefore, do not substitute subject matter based theories and methodologies for analysing economic, social, or religious dimensions of development issues. Rather, they suggest applying such subject matter competence in conjunction with a holistic perception of a livelihood system.
4. Examples illustrating a livelihood focus in the micro-macro interface
Millennium Declaration and Development Goals - a global commitment for local impacts
The Millennium Declaration (MD) is expected to enhance global resource allocation for fighting poverty. The Millennium Development Goals (MDGs) provide a generally accepted framework for global development efforts in eight selected goal areas. The MDGs are thus clearly goal-oriented and are - since they emanate from a top-down process - exposed to the risk of generating a predominantly goal-driven development without proper grounding in the realities of people's livelihoods.
The MDGs face their biggest challenge on the African continent, especially in countries of Sub-Saharan Africa. An uncritical orientation towards the MDGs when formulating PRSPs for countries of Sub-Saharan Africa may increase the risk of unrealistic goal setting exercises and an overtaxing of the absorptive capacity for increased aid flows, instead of developing context-related strategies in favour of more sustainable livelihoods.
There are valid reasons to assume that livelihood approaches must play an important role in assessing the specific nature of poverty and the absorption capacity of the poor. A pro-poor orientation also means acknowledging their visions and their criteria of well-being. In this way livelihood approaches provide a much needed complementary micro perspective for conceiving, implementing and monitoring pro-poor development, be it institutional change, new policy frameworks or programmes and projects.
Pro-poor growth in the interface between macro and micro perceptions
It is now recognised that pro-poor growth is an essential element for achieving sustainable poverty reduction (see Klasen, 2003). PRSPs are considered to provide useful platforms for conceiving strategies for economic growth that benefits the poor and poorest sections of the population over-proportionally, for instance by creating access to gainful employment. Yet, among the many hurdles at least two are generally acknowledged: Poverty is very often associated with a very skewed distribution of political power, which in turn allocates the gains of any economic growth once again to the rich and powerful members of a given society. Interventions in favour of good governance deal generally with this hurdle.
The second hurdle is also linked to distributional effects. In this case, however, the hurdle is part of precisely those livelihoods that should be favoured by pro-poor growth: Under conditions where actual dedications of resources for family welfare widely differ between husband and wife, a prevailing gender imbalance in decision-making within households can nullify or even reverse actual gains from pro-poor growth. An understanding of livelihood realities - and gender-related decision-making in poor households is part of livelihood realities - can provide essential insight and awareness for conceiving development interventions at the micro level, which are complementary to economic strategy formulation at the macro level.
Good Governance and decentralisation between constitutional and local reality
SDC supports decentralisation as an effective measure of good governance. Devolution of political decision-making to local levels, e.g., to communities, should promote effective political participation of citizens, women and men, in favour of local development - and thus also in favour of effective poverty reduction. It should lead to responsive and accountable local governance and give minorities a voice. Gender discrimination in political decision-making is expected to decrease. It may even be tackled directly by quota systems. A prominent example in this respect is the amendment of the Indian constitution that makes the membership of women in local governance conditional.
Constitutional amendments are just one side of the coin, leaving unfinished business. Local livelihood systems are conditioned by traditions of local governance, embedded in worldviews and power relations that can only be understood when we turn attention also to the micro-cosmos of villages or communities where decentralisation should become reality, be it in India, Africa or the Andes. External support of local governance, therefore, requires a livelihood perspective providing access to local forces and factors that may favour or hinder successful decentralisation processes.
Right-based approach: Empowering right-holders - strengthening duty-bearers
A livelihood focus can contribute to a more meaningful analysis of context and actors for right-based approaches in development cooperation. A right-based approach to development basically means to address simultaneously two separate, yet interacting, parties - the right holders and the duty bearers. Yet, moving from rhetoric to action may require a closer look into livelihood conditions of both parties. A right-based approach would appear appropriate, for instance, in the case of a forest officer, as an official duty bearer, denying a tribal farmer, as right holder, entitled access to forest products. Yet, that kind of interaction between right holder and duty bearer takes place not only in the interface of two different institutional set-ups, but is conditioned at the same time by the specific livelihood strategies of right holders and duty bearers. There is no lack of empirical evidence showing that policy changes at the macro level, informed by purely institutional focus, often remain ineffective (Geiser & Steimann, 2004). Giving proper attention to livelihood strategies of the stakeholders may help us to understand why, for instance, "not claiming rights" and "not delivering duties" may be rational behaviour. It follows that a crucial challenge of a right-based approach is to promote empowerment of the right holders while simultaneously doing justice to the duty bearers by focusing also on forces and factors conditioning their livelihoods.
- Ashley, C. & Carney, D. (1999) 'Sustainable livelihoods: Lessons from early experience'. London: Department for International Development DFID. (Available at http://www.livelihoods.org/info/docs/nrcadc.pdf)
- Baumgartner, R. & Högger, R. (eds.) (2004). In search of sustainable livelihood systems - Managing resources and change. New Delhi: Sage Publications.
- Carney, D., Drinkwater, M., Rusinow, T., Neejes, K., Wanmali, S. & Singh, N. (1999) 'Livelihoods approaches compared;. London: Department for International Development DFID. (Available at http://www.livelihoods.org/info/docs/lacv3.pdf)
- Drinkwater M. & Rusinow T. (1999). Application of CARE's Livelihoods Approach. Presentation for NRAC '99. (Available at http://www.livelihoods.org/info/nrac/care.pdf)
- Geiser, U. & Steimann, B. (2004) 'State actors livelihoods, acts of translation, and forest sector reforms in northwest Pakistan'. Contemporary South Asia, 13(4), pp. 437-448.
- Hussein, K. (2002) Livelihood approaches compared: A multi-agency review of current practice. Commissioned by the UK Department for International Development's (DFID's) Sustainable Livelihoods Support Office (SLSO). London: Overseas Development Institute. (Available at http://www.livelihoods.org/info/docs/LAC.pdf)
- Klasen, S. (2004) In search of the holy grail: How to achieve pro-poor growth? In Tungodden, B., Stern, N. & I. Kolstad (eds.), Towards Pro Poor Policies: Aid, institutions, and globalization. Annual World Bank Conference on Development Economics-Europe 2003. Washington, DC: The World Bank. (Available at http://econwpa.wustl.edu/eps/mac/papers/0401/0401005.pdf)
- Holenstein, A.-M. (2005) 'Role and significance of religion and spirituality in development co-operation: A reflection and working paper'. Bern: SDC.
- OECD (2001) 'The DAC Guidelines: Poverty Reduction'. Paris: OECD Publications Service. (Available at http://www.oecd.org/dataoecd/47/14/2672735.pdf)
- Rapoport, A. (1985) 'Thinking about home environments: A conceptual framework'. In Altmann, I. and Werner, C. M., Home Environments (pp. 255-86). New York: Plenum Press.
- Sjöstrand, S. (1992) 'On the Rationale Behind "Irrational" Institutions', Journal of Economic Issues, 26(4), pp.1007-40.
- Simon, H. A. (1984) Models of Bounded Rationality, Volume 1. Cambridge, MA: MIT press.