Development Management: Sustainable Livelihoods And Markets For The Poor

Introduction

This paper serves to compare, contrast and investigate the contemporary development strategies: The Sustainable livelihoods approach and making markets work for the poor approach. The history, background, principles, strengths, weaknesses and application will be discussed to understand each approach separately. Thereafter, the approaches will be discussed, compared and concluded. The topics will be discussed with the prominent principles, and general strategies and ideas being highlighted.

Sustainable livelihoods approach

The sustainable livelihood approach focuses on pro- poor development through sustainable living and assets promoting wellness. The emergence of the approach appeared in literature around the 1990’s, where approaches towards human wellbeing and sustainability became primary focus. This appearance was evident in the Brundtland Commission Report in 1987 and the first UNDP Human Development Report in 1990. A contradicting augment is made by Solesbury (2009), that the emergence of the approach was evident before the 1990s, where the cross-disciplinary livelihoods concept has influenced rural development. An early example of this is seen from developmental work in Zambia in the 1940’s. The policy was adopted during the mid-1990s by Department of International Development (DFID), with the aim to redefine it’s internationally development role of government in 1997. The initiation of the Sustainable Livelihoods Resource Group accelerated the development internationally.

Core principles

The Sustainable livelihoods approaches are based upon the sole purpose of poverty reduction (through objectives, scope and priorities for development), the lifestyles of the poor, and the importance of structural and institutional issues. These principles draw off assets and capital influences. SLA stresses on understanding and facilitating the link from the micro to the macro, rather than working only at community level. This approach was in response to the immediate focus of government and donor contribution on resources and facilities or services, rather than people themselves. DFID core SL principles are:

• People centred: sustainable livelihood will only be achieved if the focus and strategies are adapted to the requirements and participation of the poor.
• Responsive and participatory: poor people must be the identifiers of priorities and requirements.
• Multi level: ensuring that micro levels inform the development of policy and macro level processes and structures support people.
• Conducted in partnership: inclusive of the public and the private sector.
• Sustainable: cover the 4 dimensions of sustainability, being: economic; institutional; social; and environmental.
• Dynamic: the approach must be flexible and adaptable to achieve its purpose of poverty eradication.

Strengths and weaknesses

According to Carney (2002) the strengths of the SL approach are: understanding the complexity of poor people lives, thus approaches are in response to their needs; the provision of sustainable opportunities considering issues they are faced with; the flexibility of the approach is able to respond and adapt to any context and evolving agendas; the approach is people-focused and encourages bottom level participation in conjunction with upper level assistance; it concerns multidisciplinary influences; it decentralises power to assist the poor ; and encourages international participation and knowledge. The weaknesses are: the SL approach draws on tools that are used in conjunction with existing frameworks; the asset and capital variables are not fixed; and it does not fully cover crucial aspects such as vulnerability, gender issues, bias and markets.

Case study

The LADDER (Livelihoods and diversification directions explored by research) project headed by the Overseas Development Group of the university of East Anglia in Uganda, Tanzania, Malawi and Kenya. The project identifies the different livelihood circumstances between the poor and advantaged, and analyses factors within the institutional environment which are not beneficial to households. The qualitative research gave way to a quantitative survey of approximately 4000 households in 7 villages over 4 countries. Another project was carried out by the Institute of Development Studies’ Sustainable Livelihoods in Southern Africa which focuses on natural resources available to the poor, affected by policies and institutions. Both policies have the goal of using ground research to inform and challenge the existing policy. the projects include the assets, analyse a village-based livelihood for grounded research, and put emphasis on ‘institutional blockages’ to livelihood analysis.

Markets for the poor (M4P) approach

Markets for the poor strategy has a purpose of enhancing sustainable growth of those whom fall into the poor sector through the improvement of the outcomes reached by entrepreneurs, employees or consumers of the markets. The M4P was initiated through the work of New Institutional Economics (NIE). The NIE approach questions the relevance of a perfectly competitive market, stating that information is incomplete, unequal, costly to acquire and costly to use. Markets are institutions that enable exchange through reduced cost and risk of transactions. New thinking and research were introduced in the late 1990s in ‘Making Markets Work Better for the Poor’. The original M4P framework encourages better analysis and understanding of the role of markets in achieving pro-poor growth in conjunction with the SLA framework for a more people-based approach. The approach identifies tools and possibilities for pro-poor market development with the integration of larger private markets. Markets play a crucial role by allocating resources to create incentives for investments and trade. They aim to change the structure and characteristics of isolated markets to increase and enable participation of the poor. Markets supporting the poor enables sustained growth which could lead to the reduction of poverty in the country. Assets need to be acquired in order to reduce market vulnerability.

Core principles

The main principles of the M4P approach are: sustainable development and growth through pro-poor market strategies; enabling poor with tools to participate in markets; providing guidance to reduce risk or vulnerability; to incorporate private markets as a support structure for pro-poor markets; and to enable competition between pro-poor/ public and private markets for equal possibility of results and returns.

Strengths and weaknesses

Weaknesses are: high risk and vulnerability in markets, market strategies do not take bias and constraints into account, in rural areas development of products and services are insufficient, thus growth may be stunted, there is exclusivity within markets, and social isolation of rural areas may pose a threat to development through networks.

The strengths are: M4P aims at long term sustainability, provides a platform for poor markets to develop and integrate into larger scale markets, provides public-private market tools for growth, it encourages empowerment and provides an opportunity for the poor to benefit from investments and returns.

Case study

PrOpCom aims to reduce discounts on the CIF price for Nigerian cashews, which provides an incentive for producing cashews for snacks instead of for the culinary market. This requires institutional change of an agreed standard for well-dried cashews that can be sold to the snack market, training purchasing agents of exporters to pay premiums for well dried cashews, broadcasting information on standards/premia for well-dried cashews; how to dry cashews, establishing markets for training purchasing agents – intervene pre-delivery by establishing training curricula, post-delivery to accredit purchasing agents, supporting nurseries that supply better genetic material, supporting less developed exporters of raw and processed cashews to increase competition in the purchase of cashews.

Conclusion

Mutual aim of poverty reduction through sustainable livelihoods, however the strategies differ. SLA highlights the importance of poor people’s access to physical, natural, human, social and financial assets or capitals, and the returns from these assets. The SLA approach achieves results through sustainable people-orientated growth and the M4P achieves its aim through economic development. The approaches reduce the complexity through decentralised adaptable strategies of achieving the objectives. This comparison of methods can be seen in the case studies discussed. The M4P approach integrates sustainable livelihoods as its core aim, which is achieved through economic growth within pro-poor markets. The approaches and further research are focused on bottom approach, although are integrated with institutes and higher sectors. The approaches are continuously evolving to maximise efficiency and effectiveness and are often merged with other approaches to fill gaps or deficiencies.