Using an asset-based approach to identify drivers of sustainable rural growth and poverty reduction in Central America: a conceptual framework

How do assets influence rural growth? What is the connection between assets and livelihood strategies? This World Bank Policy Research Working Paper sets out a framework for analysing the significance of the quantity, quality and productivity of assets in driving rural growth in Central America, Latin America and the Caribbean.

The framework emphasises the linkages between assets, the context of policy, institutions, markets and risk which influence what they are worth and how they are managed, the livelihoods strategies employed by households, and well-being outcomes. It has much in common with the livelihoods framework in addressing how combinations of assets and the policy and institutional environment affect how households are able to respond to livelihood opportunities.

The paper notes that:

• this region is characterised by highly unequal asset distribution, high exposure to natural, economic and social risks, and an ongoing context of economic, political and institutional reforms, making an asset-based approach particularly useful
• how combinations of assets complement each other is an important factor in their value, what returns can be gained from them, and whether a household is able to exploit them effectively
  
• market-based reforms cannot quickly resolve decades of structural limitations facing the rural poor. A broader approach involves analysis of the quantity, quality and productivity of assets by different household types in different geographical areas so that policy to change the growth-generating potential of assets can be formulated
• use of combinations of quantitative and qualitative regional and household level research to capture the complex relationships between assets, context, livelihood strategies and well-being outcomes.