• Introduction

Livelihoods and market development

This paper questions how development agencies and governments respond to situations in which poor households' livelihoods are intertwined through markets with socially, politically and geographically remote actors and processes. It aims to present a more coherent approach to answer this question by providing a conceptual and operational bridge between the ‘sustainable livelihoods approach’ (SLA) adopted by the Social Development division and the ‘making market systems work for the poor’ approach (M4P) adopted by the Employment and Income division.

This paper argues that a more cohesive approach is possible if SLA and M4P learn from one another through borrowing insights when it fits their main perspective. However, it also notes that resolving differences can be difficult as the M4P approach studies the intersection of people’s livelihoods and market systems from the direction of economic relations, whereas SLA is from a people-centred direction. It is suggested that each approach is valuable and neither can be given precedence.

Besides the fact that both the approaches agree that markets matter to the poor, two interrelated aspects which unite MP and SLA are analysis of institutions and sustainability objectives. Both M4P and SLA are concerned with institutions and the way these shape people’s engagement in market systems, though it's recommended that SLA needs to take more note of private and economic institutions. Whereas it's argued that M4P overlooks the role of social institutions in shaping market systems. Both M4P and SLA concentrate on addressing sustainability issues, but have differences in interpretation of sustainability in practice and thereby need clearer guidance on what sustainability, especially institutional sustainability, means in practice. 

 A clarification of common underlying principles in the following points of contact between SLA and M4P is required to achieve great cohesion between these approaches:

• achieving large-scale impact
• the concept of empowerment
• clarifying the role of participatory processes.

Furthermore, accounting for practical operational issues in achieving a more coherent approach across work in diverse fields is also suggested. Finally, the paper concludes by asking which specific ideas can help SDC’s F-department to build a more inclusive approach. It specifically suggests agreeing on basic principles, conceptual framework, operational guidance, building capacity and skill sets, and generating case-based learning reviews.

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