Sustainable Livelihoods and Poverty Reduction

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Sustainable Livelihoods and Poverty Reduction
Joseph Assan, PhD School of Natural
Sciences Trinity College Dublin Dublin, Ireland
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Definition of Sustainable Development

• In 1987 Brundtland report Our Common Future
  defined sustainable development as development
  that meets the needs of the present generation
  without compromising the ability of future
  generations to meet their needs (WCED 1987).

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What is Political Economy

• Political economy originally was the term for
  studying the economics of production, buying,
  and selling
• and their relations with law, custom and
  government
• as well as with the distribution
  of national income and wealth through the budget
  process of the state or international
  institutions.
• (Gregg et al. 2007)

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Contemporary Political Economy

• examines how political forces affect the choice
  of policies, distributional conflicts and
  political institutions
• The political-economy literature argues that
  economics alone cannot fully explain the enormous
  variance across countries in growth and more
  generally, in economic outcomes and policy
  choices
• Political-economy concepts assert that economic
  policy is the result of political struggle within
  an institutional structure with state and none
  state actors..
• Source Alisina, A. and Perotti, R. (1994)

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The UN High Panel (2012) calls for a New
International Political Economy of Sustainable
Development
Political Economy
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Multi-disciplinarity Trans-disciplinarity of
Political Economy of International Sustainable
Development
Multi-disciplinary Trans-disciplinary
Economics, Mgt, Business etc
Anthropology Sociology
Environment, Theology etc
Sustainable International Development
Technology, info studied
Politics and Law
Agricultural and rural studies etc.
Development Studies
Geography, policy Studies
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Political Economy of International Sustainable
Development
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Whose impact?
There is mounting evidence that Livelihood
Diversification (embracing both farm and non-farm
employment) activities have become an important
resource for households (Reardon 1995 Reardon et
al. 1998).
A livelihood is sustainable when it can cope with
and recover from stress and shocks and maintain
or enhance its capabilities and assets both now
and in the future, while not undermining the
natural resource base (Carney 1998).
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Livelihoods Assets
Human Capital
Natural Capital
Social Capital
The Poor
Financial Capital
Physical Capital
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The Sustainable Livelihoods Framework
Vulnerability Context Shocks Seasonality Trends Ch
anges
Policies Institutions Processes
Livelihood Strategies
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Micro-foundations of Development

• Understand the behaviour of state and non-state
  actors (decentralised government institutions,
  civil society groups and households)
• Identifying the constraints and barriers to
  sustainable livelihoods diversification, growth
  within micro economies
• Develop policies that will help inform policy
  makers as to how to reduce inequality

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Do rural households diversify for survival or
wealth accumulation?

• Diversification is a strategy for survival.
• A source of insurance against indebtedness and
  borrowing
• The amounts saved are observed to be small
• Capital for non-farm activities/consumption
• Still do not enjoy income security
• Diversification meets basic consumption needs
• Majority borrow regularly or occasionally

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Income shocks and household risk coping mechanisms

• Policy Implications
• Vulnerability to shocks is a dominant feature of
  household livelihoods
• Negative effect on welfare (income,
• wealth, health, etc.)
• Vulnerability to poverty
• Key challenge is maintaining satisfactory
  confidence on young people in the development
  dream

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Does livelihood diversification reduce economic
risk effectively?

• Diversification is not able to provide risk-free
  and assured incomes
• The production of new products and/or more output
  of already existing studied
• Most households and end up in financial crisis
• Raise some of their credit from friends and
  family and network groups such as susu groups

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Does livelihood diversification reduce economic
risk effectively?

• Patterns of risk aversion
• introduction of new risks
• failure to remove existing risks
• products encounter the challenge of marketing
• prevalence of income
• borrow in order to finance their diversified
  enterprises

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Income shocks and household risk coping mechanisms

• Policy implications
• Mechanisms to reduce the uncertainty associated
  with income generating activities will have
  welfare enhancing effects
• Could be achieved through extending existing
  formal insurance contracts and avenues
• cover weather related risks

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Livelihood Diversification and Poverty Reduction
are we on Course??
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Conclusion Livelihood Diversification
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Thank you.