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

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).

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)

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)

The UN High Panel (2012) calls for a New International Political Economy of Sustainable Development

Multi-disciplinarity & Trans-disciplinarity of Political Economy of International Sustainable Development Multi-disciplinary & Trans-disciplinary Economics, Mgt, Business etc Anthropology & Sociology Environment, Theology etc Technology, info studied Sustainable International Development Politics and Law Agricultural and rural studies etc. Development Studies Geography, policy Studies

Political Economy of International Sustainable Development:

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).

Livelihoods Assets Human Capital Social Capital Natural Capital The Poor Physical Capital Financial Capital

The Sustainable Livelihoods Framework P H The Poor Vulnerability Context Shocks Seasonality Trends Changes influence Policies Institutions Processes Livelihood Strategies Livelihood Outcomes

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 11

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

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

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

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

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

Livelihood Diversification and Poverty Reduction:… …are we on Course??

Conclusion: Livelihood Diversification Opens new Economic Pathways Survival rather than accumulation Risk prone Within the community/District Creates gender differentiation Income and Market differentiation Poverty Reduction Non-uniformity of outcomes of diversification Wealth disparity Wage labour production Marginal and compulsive alternatives Thrives on social capital Livelihood Sustainability Requires empowerment of state actors Requires formal institutional support Demands budgetary frameworks 18

Study Synthesis framework 19

Thank you.