Sustainable livelihoods guidance sheets: section 5

This is the fifth part of a seven part series of Guidance Sheets on sustainable livelihoods. The focus of this section is on policies, institutions and processes (PIPs). Effective PIPs are recognised as essential in sustaining livelihoods. Together, they shape poor people’s livelihood options. Although the importance of policy and institutional issues is widely recognised, approaches to reform are generally poorly understood. This section focuses on the concepts, methods and tools needed to help design and manage development interventions that promote pro-poor policies and institutions.

Taken together, policies, institutions and processes form the context within which individuals and
households construct and adapt livelihood strategies (section 4.11). As such, the PIP dimension of the SL framework embraces complex issues concerning participation, power, authority, governance, laws, policies, public service delivery and social relations as influenced by gender, caste, ethnicity, age and so on. In effect, they determine the freedom that people have to transform their assets into livelihood outcomes.

Policies, institutions and processes determine, among other things:

• poor people’s access to various assets (such as land or labour)
• the benefits poor people are able to derive from different types of capital (through markets)
• the environment for private sector investment
• the extent to which poor people are able to engage in decision-making processes
• individual and civil society rights.

The ways of identifying entry points for policy reform are examined in section 5.2. In sections 5.3, 5.4 and 5.5 the paper goes on to outline ways in which pro-poor policy and institutional reform may be supported. Those parts of section 5 focus on policy and institutional reform processes, and do not explicitly address issues concerning the reform of organisations. This is because organisational reform processes are already relatively well documented. In contrast, the paper argues, policy and institutional reform processes are relatively poorly understood, and yet not only directly shape poor people’s livelihoods, but are also essential for improving the performance of organisations that interact with poor people.