Urban Livelihoods

A People-centred Approach to Reducing Poverty

Tony Lloyd-Jones, Carole Rakodi, Carole Rakodi, Tony Lloyd-Jones

• Publisher: Routledge
• Year: 2014
• Print ISBN: 9781853838606
• eBook ISBN: 9781136548451
• Topic: Architecture
• Subtopic: Urban Planning & Landscaping

One of the most promising approaches to poverty reduction in developing countries is to encourage sustainable livelihoods for the poor. This takes account of their opportunities and assets and the sources of their vulnerability. Based on recent and extensive research, this volume thoroughly assesses the value of the livelihoods approach to urban poverty. The book reviews the situation and strategies of the urban poor and identifies the policies and practical programmes that work best. Lasting improvements depend not just on economic development, but on political commitment and structures that are responsive to the claims and needs of different groups of poor people.

Part 1

Livelihoods and the
Poverty Context

The two chapters in Part 1 provide a starting point for the remainder of the book. First, the recent origins of a livelihoods approach to analysis, policy identification and project planning are discussed and its component concepts reviewed. Second, some of the main characteristics of urban areas are identified to provide a context for the more specific chapters that follow.

Chapter 1

A Livelihoods Approach –
Conceptual Issues and Definitions

Carole Rakodi

INTRODUCTION

The increased attention being paid to livelihoods in both research and policy follows from a wide recognition that few rural or urban households, especially poor households in middle- and low-income countries, rely on a single income-generating activity (farming or wage employment) to support themselves. Drawing on Chambers and Conway (1992), a livelihood is defined as comprising ‘. . . the capabilities, assets (including both material and social resources) and activities required for a means of living’ (Carney, 1998, p4). Coupled to this definition, and based on the recognition of the importance of the natural resource base to rural livelihoods and the vulnerability that so frequently characterizes the position of poor rural households:

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, while not undermining the natural resource base (Carney, 1998, p4).

Drawing on a decade or more of research on peasant agriculture, including the responses of peasant farmers to external shocks and trends, policy change and particular interventions, the concept of livelihoods goes beyond notions of ‘poverty’ and embodies a number of important additional elements. Research on urban poverty in the 1990s, stimulated by the adverse impact of recession and stabilization and structural adjustment policies on many urban groups, and seeking to develop a more appropriate conceptualization of urban poverty than that traditionally used, drew on this rural work. Many of the concepts were found to be appropriate and were adopted and adapted in work on urban poverty. Others have proved more problematic.

In this chapter, the key concepts will be introduced to provide a starting point for the discussion in the remainder of the book. Before introducing the concept of a household livelihood strategy and the elements of a livelihoods framework, poverty, deprivation and well-being are discussed. A livelihoods approach to development draws on a conceptual framework which may be used as a basis for analysing, understanding and managing the complexity of livelihoods, enabling complementarities and trade-offs between alternative supporting activities to be assessed and providing a basis for identifying policy objectives and interventions (Carney, 1998). Current users of such a framework are in broad agreement on its key components, although precise conceptualization varies and emphases differ. Because the initiative for this publication came from DFID (and also for convenience) our starting point will be the framework currently being used in the DFID approach, but it will be subject to critical appraisal and the frameworks being used by other organizations and researchers will be referred to where appropriate. The emphasis on sustainable livelihoods in particular needs careful consideration in an urban context and so the final section of this chapter will review some conceptual and definitional issues raised by the question of sustainability.

Contributors to this volume use many of the concepts introduced here, as well as a livelihoods framework, as their starting point. Some focus on one or more concepts or components of the framework, others consider it as a whole. Following their critical analysis of the applicability of a livelihoods framework for analysis and policy in the urban context, the final chapter will reflect on the key issues arising out of the analysis and identify how our conceptualization might be further improved as a basis for research, policy and action.

POVERTY, DEPRIVATION AND WELL-BEING¹

Households or individuals are considered poor when the resources they command are insufficient to enable them to consume sufficient goods and services to achieve a reasonable minimum level of welfare. The value of goods and services consumed, whether purchased, gifts or self-produced, is expressed in monetary terms, enabling the definition of a poverty line (PL). This may refer to either absolute or relative poverty: the former is based on the cost of a basic food basket, with (the poverty line) or without (the food poverty line) other necessities, for a particular country or subnational area at a particular date; the latter refers to consumption equal to a proportion of total or average consumption. Conventional PLs are widely used because it is generally accepted that ‘inadequate command over commodities is the most important dimension of poverty, and a key determinant of other aspects of welfare, such as health, longevity and self-esteem’ (Lipton and Ravallion, 1995, p2553). Moreover, they provide indicators suitable for making comparisons in time and space. Many refinements have been developed, but methodological problems still abound. In addition, there are a variety of conceptual problems.

Consumption is generally considered to provide a better (more appropriate and more accurately measured) indicator than income. Adjustments for variations in the cost of living, the value of home production or goods/benefits received in kind, and for inflation can now be built into estimates of household consumption. The extent to which these methodological refinements improve the accuracy of poverty estimates depends on the quality of the data: it is difficult to estimate consumption in economies which are only partly monetized, in which households consume their own production, where household and business accounts are not separated and unsold goods consumed within the household, and in which many of the business activities of women and children are underreported. Also the income from illegal activities is not reported and expenditure on items such as alcohol is reported unreliably.

Furthermore:

• Levels of access to publicly supplied goods and common pool resources are important components of welfare, vary between households, but may or may not be included in estimates of consumption (see also Maxwell, 1999).

• Minimum consumption requirements are typically based on the food expenditure necessary to attain some recommended food energy intake, but there is little reliable evidence on the energy requirements of different groups of people.

• The definition of ‘non-food necessities’ varies between countries, subnational areas, sociocultural groups, households and individuals.

• Poverty-line analysis has neglected the dynamics of poverty and has failed to distinguish between transient and persistent poverty, and between different household trajectories: impoverishment, stability or improved well-being.² However, the methods used do not allow for unequal distribution of consumption between household members, scale economies, changing household composition, problems in identifying ‘households’ and their ‘heads’ , or the flow of resources between coresident households and other family members.

A further problem with PL analysis is that indicators based on household consumption do not capture all dimensions of poverty, especially from the viewpoint of poor people themselves. Research on the perceptions and definitions of poverty used by the poor shows, first, that poverty is not defined solely in terms of low incomes, but uses broader concepts of deprivation and insecurity; and second, that any attempt to place monetary values on these aspects of personal, household and social deprivation involves so many arbitrary assumptions that it is likely to be meaningless.

Deprivation occurs when people are unable to reach a certain level of functioning or capability. Chambers (1989), for example, includes physical weakness, isolation, vulnerability and powerlessness in addition to lack of income and assets. Baulch (1996) identifies a pyramid, starting from income poverty as the most measurable, to access to common pool resources, state-provided commodities, assets, dignity and autonomy. Difficulties arise, first, in reaching a common understanding of ‘deprivation’ (let alone equivalent terms in other languages) (Moore et al, 1998), and, second, in measuring non-monetary components of poverty and weighting them against monetary components (Maxwell, 1999).

Defining a household as poor in terms of consumption may not capture all deprived households and individuals. First, although income poverty is generally important in poor people's own perceptions of ill-being, other aspects of material poverty and ill-being which arise from social relationships are also important and may offset stable or increasing incomes (Moore et al, 1998). Therefore national household sample surveys may not identify women, for example, as a disproportionately poor group, but if deprivation includes social subordination, reduced life chances and excessive workloads, all or specific categories of poor women are undoubtedly deprived (Booth et al, 1998).

The concept of deprivation therefore adds further dimensions to income poverty which are highly relevant to the situation of poor people. Commonly used indicators of deprivation were initially derived from analyses of the characteristics of poor individuals and households based on household sample surveys, and this may be one appropriate way of deriving such indicators. However, definitions of who is considered poor in terms of income and consumption were framed and these indicators initially selected by the non-poor and outsiders. The categorizations may not coincide with the perceptions of the poor themselves, with respect to either who is considered poor, or how their poverty and dependence is understood. In addition, the approach casts the poor as passive victims. The concepts discussed below seek to address some of the main shortcomings of a money-metric understanding of poverty and externally defined indicators of deprivation. In addition, they move beyond outcomes – states of poverty, deprivation or well-being – to processes of impoverishment, increased welfare, exclusion or inclusion.

HOUSEHOLD STRATEGIES

For some time now, work on rural poverty has revolved around the belief that households aim at secure livelihoods. Households, it is suggested, have access to a portfolio of assets, both tangible (stores of cash and food, and resources such as land, physical investment or skills) and intangible (claims on others and the government, and access rights, for example, to services). They make decisions about how the portfolio is used: for example, for earning, by disposal, to fulfil kinship obligations and responsibilities, to develop mutual support networks, or by changes to diet. The strategy open to a household depends both on the portfolio held and on the household's capability to find and make use of livelihood opportunities. The latter, in turn, depends in part on the household's composition (Chambers, 1989; Chambers and Conway, 1992). The strategies adopted aim: to cope with and recover from stress and shocks, by stinting, hoarding, protecting, depleting or diversifying the portfolio; to maintain or enhance capability and assets; and to provide sustainable livelihood opportunities for the next generation. Faced with shock, stress or risk, households devise coping strategies to protect their social reproduction and enable recovery. These may be ineffective if, in the long term, consumption declines and/or assets are lost permanently, or if successive calls on particular strategies deplete the natural, social or financial resources on which households or communities call. Poverty is thus characterized not only by a lack of assets and inability to accumulate a portfolio of them, but also by lack of choice with respect to alternative coping strategies. The poorest and most vulnerable households are forced to adopt strategies which enable them to survive but not to improve their welfare.

As in rural areas, so in urban areas: households seek to mobilize resources and opportunities and to combine these into a livelihood strategy which is a mix of labour market involvement; savings; borrowing and investment; productive and reproductive activities; income, labour and asset pooling; and social networking (Grown and Sebstad, 1989). Both material and human resources are available. Households and individuals adjust the mix according to their own circumstances (age, life-cycle stage, educational level, tasks) and the changing context in which they live. Economic activities form the basis of a household strategy, but to them, and overlapping with them, may be added migration movements, maintenance of ties with rural areas, urban food production, decisions about access to services such as education and housing, and participation in social networks.

Few households in poor countries are able to support themselves on the basis of a single business activity (farming or non-farm) or full-time wage employment. Given limited capital and skills, a poor person's scope for developing an enterprise with ample profit margins is limited and, in any case, the risk of relying on a single business is too great. Farm incomes or wages, moreover, have often fallen further and further behind the minimum required to support a family as recession and structural adjustment policies have bitten.

The ‘livelihoods’ concept is a realistic recognition of the multiple activities in which households engage to ensure their survival and improve their well-being, as will be explored further below (see also Ellis, 1998). Since it rests on the two further concepts of ‘household’ and ‘strategy’ , however, some initial caveats relating to these terms need to be noted.

A household is commonly defined as ‘a person or co-resident group of people who contribute to and/or benefit from a joint economy in either cash or domestic labour’ – that is, a group of people who live and eat together. Many urban families do indeed fit this definition, are comprised of single people or nuclear families, with or without additional ‘permanent’ resident relatives, and identification of the ‘...

Table of contents

• Front Cover
• Title page
• Copyright
• Contents
• List of Tables, Figures and Boxes
• List of Acronyms and Abbreviations
• About the Authors
• Foreword by Clare Short
• Preface: The Sustainable Livelihoods Approach and the Department for International Development
• Dedication
• Acknowledgements
• Introduction
• PART 1 LIVELIHOODS AND THE POVERTY CONTEXT
• PART 2 UNDERSTANDING THE SITUATIONS AND STRATEGIES OF POOR PEOPLE
• PART 3 THE POLICY IMPLICATIONS OF URBAN LIVELIHOODS ANALYSIS
• PART 4 URBAN POVERTY REDUCTION: LESSONS FROM EXPERIENCE
• PART 5 CONCLUSIONS
• Index