Annex 11

Inter-agency experiences and lessons

FROM THE FORUM ON OPERATIONALIZING SUSTAINABLE LIVELIHOODS APPROACHES

KEY LESSONS

1. -Agencies agreed strongly on the guiding principles that underpin sustainable livelihoods (SL) approaches.

2. -The SL framework is a diagnostic tool that has to be made context-specific.

3. -The tools and methods used to put SL approaches into practice are not specific to SL methodology.

4. -SL approaches add value to our work because they:

• shift the focus from resources to people and from livelihood constraints to people's strengths;
• emphasize the relationship between people's assets and their resilience in the face of external shocks, highlighting how poverty contributes to vulnerability;
• focus on the synergy between natural, physical, financial, human and social capital;
• stress outcomes rather than outputs;
• prioritize early diagnosis, demand-driven implementation and the establishment of feedback mechanisms;
• emphasize project design as an iterative process involving continual learning and adaptation on the basis of feedback from unfolding implementation;
• ensure economic, institutional, social and environmental sustainability through the adoption of exit strategies in the early stages of programme implementation;
• foster interdisciplinary teamwork;
• stress the interdependence between "real-life experiences" and the broader policy context as a basis for forging bottom-up micro-macro linkages to bring about policy changes;
• encourage innovative partnerships.

5. -The participatory approaches that underpin the SL guiding principles are not unique to SL approaches and need to be adapted.

6. -A participatory analysis of livelihoods, differentiated by socio-economic strata, gender and stages in household cycle, should be conducted early on to determine entry points; overinvestment in research and analysis should be avoided by building on existing secondary data and local institutional knowledge and relying as much as possible on pilot interventions accompanied by participatory process monitoring.

7. -Holistic diagnosis may result in interventions in a single sector or at a few key entry points, provided that they address the concerns of the poor.

8. -Initial entry points can be sectoral, and can then widen to include other sectors.

9. -Grassroots institutional capacity-building and risk-management capacity are crucial to sustainability.

10.-SL approaches must consider the interaction between livelihood systems at the micro level and their policy environment.

11.-SL-driven policy analysis must consider policy content and processes.

12.-SL approaches upstream are valuable, provided that they are linked to micro-level ground-truthing. Policy changes that are driven from below - that have a strong grassroots power base and are supported by civil society - are likely to be more lasting.

13. Certain issues need further clarification:

• SL approaches may help us to understand the poor, but do they help us reach them?
• What are the most effective entry points for SL approaches?
• What is the best way to analyse the policy context and to bring about policy changes?
• Does the SL framework give adequate guidance on how to prioritize possible project interventions?
• What outcome indicators can we use to assess the impact of SL approaches?
• What are the perceived omissions or inadequacies of the DFID SL framework?

BACKGROUND

This report synthesizes the main issues and lessons learned from the Forum. The Forum brought together several agencies that had been applying or developing sustainable livelihoods (SL) approaches in their work, including CARE, the Department for International Development (DFID), the Food and Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural Development (IFAD), the United Nations Development Programme (UNDP) and the World Food Programme (WFP).

The purpose of the Forum was to:

• enable development practitioners to assess the relative merits of a variety of SL approaches in programme/project design and implementation;
• strengthen the capacity of participating agencies to apply SL approaches;
• identify issues that need to be resolved if SL approaches are to be institutionalized.

The Forum was expected to provide participants the opportunity to:

• share experiences of applying SL approaches in a range of field projects;
• explore and plan how best to put SL approaches into practice.

The Forum followed the three-week web/e-mail conference "Operationalizing participatory ways of applying SL approaches", which served to familiarize Forum participants with SL concepts, guiding principles and the SL framework. Four theme papers were prepared as a basis for discussion during the Web/E-Conference1, and theme moderators prepared guidance notes to support them.

The Forum was organized around a series of case studies in order to focus discussion on concrete issues related to operationalizing SL approaches. Each agency prepared and presented one or more of its own project experiences as a basis for analysing the strengths and weaknesses of SL approaches. Case studies were selected that typified the range of situations confronted by development agencies. These ran the gamut from drought-prone areas of Mali, to upland watersheds in Latin America, to flood-prone lowland paddy areas in Bangladesh, to cold grasslands in Mongolia. Four of the eight case studies concerned sustainable natural resource management (watershed management, land husbandry, soil and water conservation, integrated pest management). The remaining four were examples of dryland agriculture, artisanal fisheries, livestock and household food security (see Table 1). Four mini-case studies dealt with cross-cutting issues: gender, rural micro-finance, institutional restructuring and the design of a sectoral regional project.

Forum participants were split up into groups of seven to eight members, each with well-defined terms of reference. The groups had to: (1) understand the project as designed, then apply the SL framework and assess what might have changed if SL principles had been used; (2) analyse how the project evolved during implementation, then apply SL principles and discuss what difference this might have made to implementation; (3) examine project outcomes and consider whether the application of SL approaches would have resulted in substantially different outcomes; (4) suggest ways of redesigning the project in the light of SL approaches and identify constraints likely to emerge in implementing the redesigned project; and (5) draw out lessons regarding the value added by SL approaches and flag any issues needing further clarification.

At the end of the second day, each case study group reported back to the plenary group, which then prioritized the most important unresolved issues. New "issue groups" were formed to discuss these and report back to the plenary group.

Unresolved issues

1. What are the best entry points for SL approaches?
2. Do SL approaches add value for implementation?
3. If SL approaches help agencies understand the poor, do they help reach them?
4. Do SL approaches always need a policy dimension?
5. How much diagnosis and when?
6. Are SL approaches culture-bound?
7. Can SL approaches work in authoritarian regimes?
8. What do SL approaches imply for donor agencies?

Participants then broke up into agency-specific groups to discuss the implications of SL approaches for operations in their own agencies.

As a postscript to the Forum, after the closing session, an inter-agency managers' meeting endorsed recommendations from the Forum on the question: "Where do we go from here?"

TABLE 1

Summary of case studies for the Forum

LESSONS LEARNED

What are SL?

The need to clarify what SL approaches are emerged as a central concern of the Forum. There was consensus that SL approaches comprised two elements: the SL guiding principles and the SL framework. The tools and methods used to put sustainable livelihoods into practice are essential but not specific to SL approaches.

The SL guiding principles. These are a guide to the main concerns of sustainable livelihoods. They are the defining characteristics of development interventions that have been designed to address issues identified through the use of the SL framework. But they are only guiding principles. They neither prescribe solutions nor dictate methods, not least because the guiding principles themselves prioritize flexibility and adaptation to the diverse nature of local conditions. SL guiding principles2 are to:

1. Be people-centred:

• SL approaches start by analysing people's livelihoods and how they change over time.
• SL approaches engage the active participation of the target population throughout the project cycle.

2. Be holistic:

• SL approaches acknowledge that people adopt multiple strategies to secure their livelihoods.
• Livelihoods analysis is applied across sectors, geographical areas and social groups.
• SL approaches recognize multiple actors (the private sector, ministries, community-based organizations and international bodies).

3. Be dynamic:

• SL approaches seek to understand the dynamic nature of livelihoods and the influences on them.

4. Build on strengths:

• SL approaches build on people's perceived strengths and opportunities rather than focusing on their problems and needs. They support and enhance existing livelihood strategies and coping mechanisms of the poor. (Even the poorest households have potential.)

5. Use micro-macro links:

• SL approaches examine the influence of macro-level policy and institutions on livelihood options and highlight the need for policy to be informed by insights from the local level and by the priorities of the poor.

6. Aim for sustainability:

• Sustainability is important if poverty reduction is to be lasting. Sustainability of livelihoods rests on several dimensions.

The SL framework. The SL framework is an analytical tool for understanding livelihoods systems and strategies and their interaction with policies and institutions. However, it needs to be made context-specific. This will often imply changing or adding elements to reflect local social, cultural, political and economic realities.

A wide range of diverse tools and methods may be used to design and implement projects that can contribute to achieving sustainable livelihoods. These methods, however, are not exclusive to SL approaches.

Consensus on the SL guiding principles

Participants acknowledged that reaching consensus on the guiding principles of SL approaches is a major strength:

• There is a need to get away from different "terminologies"; a shared vision is more important.
• The SL guiding principles make it easier for each agency to emphasize the aspects relevant to its own mandate and operations.

TABLE 2

Tools and methods useful for SL approaches

How do SL approaches add value to our work?

Forum participants agreed that the use of the SL framework and the incorporation of the guiding principles into development policy, planning and implementation could add value in a number of ways:

1. SL approaches shift the focus from resources to people and from problems, constraints and needs to perceived strengths, opportunities, coping strategies, and local initiative.

2. SL approaches encourage early diagnosis and the establishment of feedback mechanisms within projects that can lead to a better identification and understanding of poverty and the development of diverse strategies for addressing it. (These strategies do not necessarily involve working exclusively with the poor.)

3. SL approaches require a more systematic assessment of the vulnerability and assets of people, which makes it easier to identify more appropriate entry points.

4. Applying the SL framework reveals how the inability to cope with shocks and stresses increases the vulnerability of the poor. Making the relationships between vulnerability and poverty explicit was held to be an extremely important contribution.

5. Use of the SL framework helps agencies focus on outcomes rather than outputs. Striving to achieve outputs reduces flexibility and may succeed at the cost of the sustainability of the processes. Participants acknowledged that working towards process outcomes rather than outputs could address both concerns.

6. The focus on synergy between different types of capital also adds value. Projects that strengthen human and social capital in synergy with physical, natural or financial capital are more likely to bring about sustainable outcomes.

7. SL approaches also improve the relevance of interventions with a poverty focus. This may involve partnership with organizations that were previously "invisible" to decision-makers.

8. The SL framework provides a valuable structure for promoting and integrating interdisciplinary teamwork; indeed, the guiding principles provide a common language, and the framework assists agencies in structuring information from different disciplines.

9. Providing essential information on how prevailing structures and processes affect people's livelihoods, SL approaches ensure that policy and institutional aspects are not neglected.

10. The use of SL approaches can encourage the design of open-ended, flexible development interventions. In fact, the guiding principles espouse a process of continual learning and analysis throughout the life of a project or a programme. This implies that any "diagnosis" emerging from SL approaches must necessarily be dynamic and iterative.

11. When dynamic and iterative diagnosis is built into a project, it increases that project's capacity to react and adapt to new needs and changing conditions and to tailor interventions to suit the poor.

12. These built-in, participatory feedback mechanisms can also contribute to improving the design and implementation of projects, making them more relevant to livelihood issues encountered at the local level. In several of the projects analysed during the Forum (Bolivia, Honduras, INTERFISH, Zambia), practitioners relied on such mechanisms to adjust the design of their projects and improve their implementation.

13. SL approaches add value to implementation when they bring about a continual process of demand-driven implementation, participatory feedback and implementation readjustment.

14. Since SL approaches are holistic and call for flexibility, they allow for a greater capacity to respond to contingencies.

15. SL approaches recognize the need for partnerships because people's livelihood strategies are multisectoral and no one agency can be an expert in all fields. This points to the need to identify the core competencies and comparative advantages of agencies. The emphasis on building new and innovative partnerships across projects, line agencies, NGOs, civil society, the private sector and donor agencies was viewed as an important contribution of sustainable livelihoods approaches.

Overarching lessons

Participation and SL approaches. Participatory approaches are essential to operationalizing the guiding principles, but they need to be adapted, developed and used, as well as internalized and, institutionalized by all stakeholders.

The participatory element of SL approaches, and the resulting focus on people's livelihoods, is a powerful contributor to sustainability. The first phase of the WFP project in Ethiopia was implemented under a coercive and authoritarian regime. Project interventions attempted to address land degradation, but activities were implemented through coercive "mass mobilization". With the fall of the Derg regime in 1991, communities started to revolt against the system. This led to widespread destruction of communal woodlots and physical conservation structures. The few community woodlots that were untouched were those that the communities had specifically requested and whose species composition they had selected.

Sustainability. Within the SL framework, sustainability must be looked at holistically, and it should concern:

• economic sustainability;
• institutional sustainability;
• human and social sustainability;
• environmental and agro-ecological sustainability.

Working at multiple levels. It is crucial to ensure that micro-level institutions/organizations influence the development of policy to secure an effective enabling environment, and that macro-level structures and processes support people to build on their own strengths.

TABLE 3

Household typology - Bolivia case study

Develop a shared vision of change. The poor have problems and weaknesses. They also have strengths and opportunities, and they often have clear aspirations of where they want to be in the future. It is important to help them to bring about this vision.

"Buy into" SL approaches. Policy-makers and implementers at all levels, as well as the private sector, must "buy into" SL principles and processes. Indications from several projects, including DELIVERI and Honduras, point to the crucial role that internal champions can play in facilitating this process.

Skills, attitudes and knowledge. The use of SL approaches requires new skills, attitudes and knowledge that need to be introduced across organizations, agencies and staff at all levels.

Other lessons learned: diagnosis and design

Participatory diagnosis of livelihoods is essential prior to designing a project and selecting entry points. Projects that had failed to undertake a holistic analysis of livelihood systems prior to design often adopted strategies and entry points that were largely irrelevant to the local population, especially the poor. For instance, natural resource management (NRM) projects in Bolivia and Pakistan had to expend a lot of project staff time and resources on raising awareness of their NRM initiatives because these did not correspond to the communities' felt needs.

Inappropriate entry points. Agencies should be wary of committing themselves to a narrow or commodity-based institutional entry point unless communities have been consulted or a participatory analysis of livelihoods has been carried out. Institutional commitments can make it difficult to change the project's entry point once implementation has begun.

Data produced from livelihood analyses should always be disaggregated by gender, age and socio-economic stratum. To ensure that project interventions address the concerns of the poor and build upon their strengths, it is essential that diagnostic studies start from a disaggregated analysis of the asset base and livelihood systems of different socio-economic strata, and develop a household typology.3 Different socio-economic categories within a community can have widely different livelihood strategies.

Importance and timing of diagnosis. The Forum consensus was that initial diagnosis, followed by continual reassessment in the light of changing experience, is essential for the following reasons:

• Project planners cannot rely exclusively on secondary data; they need to understand the historical evolution of livelihood systems and coping strategies through the eyes of local people, especially the poor, as a basis for defining the project strategy.
• Even process projects that are demand-driven need to examine the supply side. They need to understand the range of support that beneficiaries are likely to request in order to identify which local institutions (public-sector, private-sector or NGOs) have the capacity to provide the services.
• Joint diagnosis can be a way of establishing a joint learning process and building local ownership of a programme or project. "The process of finding out educates and informs all stakeholders" - Mongolia case study group.
• Participation in diagnosis can be a way of building consensus among financing agencies, implementing agencies and intended beneficiaries. "Consensus among stakeholders who have competing priorities" - Mongolia case study group.
• Direct dialogue helps to increase the accountability of implementing agency staff to the intended beneficiaries.

The Forum consensus was that projects building on 10 to 15 years of experience - which includes analyses of livelihood systems and action research-cum-evaluation - should avoid overinvestment of time and resources in diagnosis. Instead, project planners should rely as much as possible on secondary data and pilot interventions, coupled with participatory process monitoring and adjustment during project implementation.4 Whereas, when entering a new area, a more substantial diagnostic process would be required up front. Diagnostic tools, however, must be adapted to the local and cultural context.

The holistic analysis may lead to one or more focused interventions. Once the holistic analysis is completed, a decision can be made on the scope of the entry point, e.g. how wide or narrow it should be, and within which sector, level or group it should lie. It is essential, however, that the needs of the poor be addressed.

Initial entry points may begin by addressing a community's priorities in one sector, and take in other sectors as the programme matures. This allows sequential movement into areas that require more community awareness, such as projects or programmes related to natural resource management (NRM).

Projects or programmes should take advantage of opportunities arising from decentralization to overcome the problems of sectoral entry points. When all government services come under the authority of the district, project funds channelled to the district level or below (bypassing the central ministries) can be allocated to one or another sector on the basis of emerging demand from communities. Decentralized services need not be provided by the line ministries but may be contracted to a wider range of service providers such as the private sector, NGOs or other civil-society organizations.

NRM projects may exclude certain vulnerable poor groups (e.g. landless, sharecroppers) by focusing on land-based interventions or activities. SL approaches can help in identifying alternative interventions that support the livelihood strategies of the poor. A possible strategy would be to identify those households that do not participate in project activities and, through participatory approaches, identify their members' needs and strengths. Additional initiatives that address those identified needs can then be introduced if they fall within the project's mandate. Alternatively, the needs of the poorest could be addressed indirectly through policy and institutional reform (employment creation, strengthening local institutions). For example, the Bolivia project could have influenced land tenure policies to address the felt needs of the landless and sharecroppers. Instead of working exclusively to improve the sustainability of farming practices, the project could have explored alternative options for earning non-farm income, thereby reducing pressure on the land. Another alternative could have been to initiate a different but related project, specifically targeting the functionally landless segments of society.

The Bangladesh INTERFISH project used farmer field schools to introduce fish farming in paddy fields. Although the project empowered smallholders, with such an entry point it could not reach the poorest households, most of which had no paddy lands. To justify the project's poverty focus, the project management referred to its target group as "tomorrow's poor" (i.e. "the self-sufficient small farmers who are considered to be vulnerable to any crises or shocks of the rural economy").

Since reaching the landless poor requires a different entry point and strategy, DFID is funding a complementary project, Strengthening Household Access to Bari Garden Extension (SHABGE). This project will assist functionally landless women and men farmers to improve household food security by increasing the productivity of land that is normally devoted to vegetable and fruit-tree production. Beneficiaries comprise households that have a total of one acre (0.40 ha) of land or less, including the land upon which the house is built.

Yet another alternative would be to establish partnership agreements with other agencies or donors to cover areas outside the project's mandate or objectives.

Efforts should be made during the design stage to negotiate with the communities to include the marginalized/poorest groups. Establishing the rules of the project through a participatory process - and possibly putting them in writing - could provide the project with the mandate for ensuring that the rights of the poor are respected. Communities requesting partnership in the project would then have to agree on the approach.

The IFAD-supported P4K project in Indonesia aims to alleviate poverty by establishing savings and credit groups for landless and functionally landless people. "The rules of the game" of P4K require community members to identify which of the people requesting project support fall below the locally defined poverty threshold. Once identified, these individuals are offered a nurturing period of savings and training, during which they may borrow against the savings of the group. Having repaid their loans at least three times, they are considered to have "graduated" and can then borrow from a commercial bank. As the 1997/98 financial crisis showed, P4K participants were found to be better equipped to resist the shock of the crisis than the rest of the population in the same community.

Choice of partners is crucial. Municipal- or district-level (multisectoral) organizations can make good local partners for SL approaches but may limit opportunities to influence policy at higher levels.The help of line ministries is needed to advocate macro-level policy changes.

Other lessons learned: implementation and monitoring

The majority of the Forum and Web/E-Conference participants had serious reservations about the contribution of SL approaches to implementation. They felt that much of the value added at implementation was not specific to SL approaches but derived from applying the lessons learned from good practice over the past two or three decades in implementing participatory projects and systems-oriented approaches (such as farming systems research or household food security).

Lessons from implementation should guide redesign. The iterative process is likely to reduce risk and improve accuracy of design. The Bolivia, Honduras, Malawi and Zambia projects all benefited from ongoing redesign, which fed into and was informed by the implementation process. This took different forms, ranging from full-fledged yearly participatory assessment by communities (e.g. the Honduras case) to more traditional participatory monitoring. Other projects (e.g. Ethiopia, INTERFISH, Mali, and Mongolia) also underwent partial redesign at mid-term review or at the beginning of successive phases.

Need for an evolutionary and responsive management. Most successful sector-based initiatives, or single-entry point projects or programmes, owe much to an evolutionary and responsive process approach. This has enabled them to respond to livelihood needs outside the original sector, either by adding new components to the existing project or by forging partnerships with other projects. This was the case for the Bolivia, Honduras and Zambia projects, and to a lesser extent for the Ethiopia project.

Need for holistic outcome indicators. Indicators that better capture the anticipated impact of projects on livelihood outcomes have yet to be identified. Holistic problem analyses carried out prior to designing a programme should indicate what the true cross-sectoral links are likely to be, and so help to identify the minimum set of impact indicators to measure.

Institutional capacity-building at the grassroots level. Capacity-building and empowerment featured prominently in most of the projects analysed (e.g. Bangladesh, Bolivia, Honduras, Malawi, Mali, P4K, Zambia and the latter phase of the Ethiopia project). The strengthening of human and social capital through institution-building at the grassroots level and enhancement of technical skills featured prominently.

The farmer field school (FFS) groups promoted by INTERFISH are emerging as solid village institutions that can address community concerns and priorities over and above the technologies adopted through experimentation. The self-help groups fostered under the food security and nutrition project in Zambia to develop and implement community action plans are coalescing into apex organizations (associations or federations) that are able to press for better delivery of government services as well as to support community-led initiatives. Similarly, in the DELIVERI project in Indonesia, the initial focus of the farmer groups - in community livestock action planning - was livestock problems. The grounding provided in participatory planning allowed some groups to broaden their remit to address new issues such as the:

• establishment of a savings and credit scheme;
• creation of an association to access inputs for rice production;
• emergence of a small enterprise financed from enhanced poultry production.

Capacity-building for risk-management. "Capacity-building efforts must focus on service delivery as well as risk-management. Institutions that are not able to manage risk effectively can quickly become overwhelmed, seriously jeopardizing their ability to continue to provide services. It is this risk-management aspect that is often overlooked in institutional strengthening efforts".5

In the absence of a proper analysis of the vulnerability context, the Mali project gave insufficient attention to building local capacity to manage risk. The impact was apparent both at the individual level (in the inability of farming households to reduce the risk of crop failure) and at the collective level (in the vulnerability of village associations and village development funds to credit default in the event of crop failure).

In Mongolia, with the privatization of the herder collectives (negdels), all the risks of herding have been transferred to the herders in a risk-prone environment. Services that the negdels used to provide (e.g. marketing, trucks and tractors for seasonal migrations and emergencies, equipment for haymaking) have largely collapsed. Furthermore, herders do not insure their animals, as they lack cash and see the terms as unattractive. As a result, they have reverted to traditional risk-minimizing strategies by having multispecies herds and cooperating with other households in groups, or khot ails, for herding in order to cope with the higher labour demand that comes with mixed herds. A new FAO Technical Cooperation Programme (TCP) project aims at strengthening local institutional capacity to manage pastoral risk in the Central Asian grasslands.

Exit strategies. A coherent strategy for phasing out external support should be developed at the beginning of implementation. Examples of exit strategies adopted in the Lempira Sur project in Honduras are:

• Communities are being assisted to organize themselves, define their development priorities and negotiate these through the local government structure (municipality). They are taught that projects are transitory and all organizational structures must respond to their perceived needs and not to the priorities of the project.
• Project messages were integrated in school curricula so that they would continue to be taught after the project ended.
• Local extensionists are supported to invest in their own farms so that they can make a living from them after the project.
• To ensure service provision after the end of the project, a multiservice cooperative has been created for former project employees and the leadership has been trained to bid and execute contracts.
• No one is paid to adopt technologies; if adoption is not based on perceived direct benefits, then it is not sustainable.
• The same applies to grassroots leaders: lead farmers are not paid; their incentive has to come from pride in the productivity of their farms.
• The project is designed to be seen by the communities as another offer. They are not part of the project; they negotiate with the project, as they should do with any other external source of assistance.
• The project management is assisting in the design of a national strategy that will enable organized communities to access poverty funds from the multilaterals (IFAD/IDB/WB, etc.).
• The project is working with various environmental funds to develop a complementary financial framework based on the provision of environmental services by the local hillside farmers.
• The most sustainable of all, but the most difficult, is the integration of farmers into the market economy through diversification, agro-industrialization, etc.

The poor in charge. Moving decision-making and finance closer to the poor is an important strategy. In this regard, decentralization, if properly implemented, is an enabling condition for creating effective linkages among public-sector institutions, communities and civil society. These linkages are essential for making livelihoods genuinely sustainable, and for properly institutionalizing the SL approach.

Legal status of grassroots organizations. Legal recognition of grassroots organizations can be vital to their sustainability. In 1996-1997, the Bolivia project helped small self-help groups amalgamate. The groups, previously fostered under the project, were transformed into full-fledged community organizations (Organisationes Territoriales de Base), which, under the new Ley de Participation Popular, could obtain legal status and become grassroots partners in local development. This legal recognition allowed these organizations to:

• access municipal funds to finance small community infrastructures and establish a rotating credit scheme (which was used to finance individual income-generating activities as well as private investments for improving land husbandry practices);
• obtain official incorporation of their community action plan into the municipality development plan.

The role of stakeholders. Regular technical auditing and review, with the full involvement of project stakeholders at all levels, can facilitate transparency and accountability (Honduras case study group).

Other lessons learned: policy

Content and processes. Participants acknowledged the need to focus on the processes of policy-making/change rather than on the content of policy alone, in order to empower people to influence policy.

Scaling up. To influence the policy environment and make it supportive of sustainable livelihoods, the feedback mechanisms from the grassroots need to be scaled up to reach policy and decision-making levels of institutions and administrations.

Capacity-building. Policy-making that enhances SL approaches, implementation and monitoring relies on pluralistic governance structures and processes. Capacity-building for grassroots and civil-society organizations should be built in at all levels as an integral part of the SL approach. In this regard, as was pointed out in the Web/E-Conference, there is also a need to develop suitable capacity-building tools and training approaches that civil-society organizations and SL beneficiaries could use to strengthen their capacity to analyse policies.

Monitoring the impacts of policy. The impacts of policy need to be monitored in order that their effects on livelihood strategies be understood. In this regard, civil society and SL beneficiaries should also play a key role in monitoring policy impacts.

How do we redesign projects?

Forum participants emphasized that agencies did not need to wait for new projects or programmes in order to begin using SL approaches; there is much to be gained by applying SL principles to ongoing projects.

If SL approaches had been adopted at formulation, what difference would it have made?

There was broad consensus in the Bolivia, Ethiopia, Mali and Mongolia working groups that the projects would have benefited had SL approaches been adopted from the outset. In the Ethiopian case study, SL approaches might have led project planners to reconsider the project's basic assumption that land degradation was the main cause of food insecurity. The understanding gained might have resulted in a very different project.

In the case of the Mali project, holistic diagnosis would have drawn out the community's development priorities. This would have avoided inappropriate entry points, provided the project with a greater poverty focus and encouraged greater ownership of the project among the community. However, broadening the scope of the project would also have increased the risk of implementing agencies finding themselves unable to cope with such a complex project.

The Mongolia case study group concluded that, although a conventional project design would have been quicker, cheaper, easier and more acceptable to the Government and funding agencies, its disadvantages would have outweighed its potential advantages. The SL design would have been slower, more costly and riskier, but it would have resulted in a more flexible and focused project of greater relevance to the livelihood systems of herders with poor or average incomes.

If SL approaches had been adopted at implementation, what would have changed?

The Mali case study group concluded that a redesign along SL principles would have redirected the aim of the project towards reducing the vulnerability of farmers to drought-induced crop failure. Greater awareness of the socio-economic make-up of the community would have increased the chances of reaching women and the poor. The feedback that farmers would have been able to give to management would have accelerated the joint learning and adaptation process. Had the need for an exit strategy been considered from the start, planners would have given higher priority to building sustainable village organizations that could have functioned independently once the project had ended.

TABLE 4

Benefits and risks of SL diagnosis and design - Mali case study group

GREY AREAS

Participants agreed that there were still many areas that needed further clarification. These included:

• SL approaches may help us to understand the poor, but do they help us reach them?
• What are the most effective entry points for SL approaches?
• What is the best way to achieve policy changes?
• If the SL framework helps us widen the range of possible project interventions, does it give adequate guidance on how to prioritize them?
• What indicators can we use to assess the impact of SL approaches?
• What are the perceived omissions or inadequacies of the DFID SL framework?

There was substantial agreement on what the unresolved issues were, but no consensus on how to address them. Participants thought that more discussion, informed by feedback from applying SL approaches to project or programme implementation, would throw light on these areas.

TABLE 5

A comparison of conventional and SL project designs - Mongolia case study group

SL approaches and poverty

Do SL approaches always imply a focus on the poorest? There was little consensus on this issue. Agencies committed to poverty alleviation are interested in SL approaches because they are seen as a way of contributing directly to meeting internationally agreed upon development targets6. Other participants felt that the sectoral mandates of certain agencies would restrict their ability to reach the poorest7.

TABLE 6

Can SL approaches add value to design? - Mali case study group

SL approaches may help us to understand the poor, but do they help us reach them? Five of the case studies seem to indicate that there is a fundamental issue regarding targeting any project interventions to the poorest. They point out that the projects have been successful with the "middle poor" and upwards.

The consensus of Forum participants was that it was still too soon to answer this question. The only SL-type projects analysed were DELIVERI, Honduras, and Malawi. The remainder shared only some SL elements. However, the groups felt that none of them succeeded in reaching the poorest sectors of the communities with which they worked.

Although the projects reached people who were poor by international standards, in the local context these people could have been characterized as the "middle poor" or "borderline non-poor" (Bangladesh, Bolivia, Mali and Mongolia). The Honduras project promoted technologies suitable to different socio-economic strata, including those that were of interest to and were adopted by poor tenant farmers, yet it is not clear that it reached the poorest.

As illustrated by the Pakistan mini-case, the existing pattern of incentives for line agency staff may not reward them for focusing on the poorest.

There can often be trade-offs between sustainable natural resource management and reaching the poor.

"It is important to bear in mind that natural resource management interventions that have public benefits do not always have direct benefits for the poor. If the poor are not involved in project activities, then consideration must be given to add components that address their livelihood needs. These needs may be addressed by other partner organizations and not directly by the project."

- Tim Frankenberger, CARE

When projects take land or natural resource-based activities as their starting point, the implication is that they will work mainly with households owning or managing that resource. In spite of diagnostic studies and PRAs, the two participatory upland watershed management projects in Bolivia and Pakistan bypassed the landless poor because their strategies were land-based. Because the Bangladesh INTERFISH project was based on integrating fish and rice farming, it could not reach the functionally landless. According to its project document, the primary beneficiaries of the DFID/FAO 25-country West Africa artisanal fisheries project are to be: "the resource users in artisanal fishing communities, particularly the poorer groups, including small-scale traders and processors (mostly women) and consumers. Through a `process approach' these beneficiaries will be helped ... to identify, implement and evaluate development activities that correspond to their own needs and aspirations". It will be important to monitor whether the project manages to reach the poorest households, whose members do not own boats but eke out a living by shore fishing, fish processing, crop farming, working as casual labourers or working on other people's fishing boats.

What are the best entry points for SL approaches?

There was consensus that SL projects or programmes should be either single-sector or multisectoral. A range of options that can be applied, depending on where the project is in the programme cycle, is more important. Ongoing projects can incorporate SL perspectives during critical moments of the project cycle, such as during mid-term reviews or evaluations. This would help to clarify whether other factors, beyond the sector-specific constraints already being addressed by the project, could help or hinder it in achieving its objectives. The main grey areas for entry points are:

Who selects the entry point (government, donors or poor people)? Ideally, the intended beneficiaries - rather than the government or donors - should select the entry point. This will require a change from the current practice, whereby governments and donors select the entry points before beneficiaries can be consulted. Currently, agencies are not entirely free to empower communities to generate their own project ideas and are expected to respond to government requests. Before any beneficiary consultation can begin, the project must feature in the government's public expenditure programme. If a project enters the pipeline as a livestock project - as occurred in Mongolia - it may be difficult to change the institutional entry point from the livestock department, even if the project title is changed.

What is the best level of entry point for SL approaches? Some of the DFID participants at the Forum stated that you could start at any level, but it was more cost effective to work at the highest level possible. The higher the level, the higher the leverage to reorient policies, institutions and processes in order to make them more responsive, client-oriented and people-centred. However, that view is not supported by the experience of the Malawi project. This project focused its efforts at the top, attempting to mainstream SL approach concepts in all relevant national development plans and programmes (household food security, employment and sustainable NRM), but found it difficult to bring about concrete livelihood improvements at the village level.

SL approaches and policy

Do SL approaches always need a policy dimension, and if so, what is the best way of bringing about policy change? The consensus among participants of both the Forum and the Web/E-Conference was, yes, SL approaches always need to consider the interaction between livelihood systems at the micro level and the policy environment in which they operate. Understanding these relationships is critical both at initial diagnosis and during project implementation. However, SL type projects need not have an explicit policy objective.

There is also emerging consensus that using SL approaches upstream may add value, if they are appropriately linked to micro-level ground-truthing.

The DELIVERI project in Indonesia is an example of an institutional reform project whose strategy was to use information gained from piloting new approaches at the village level to press for policy changes at the provincial level and above. Conversely, DFID's approach to the Uganda Agricultural Advisory Services Project may illustrate the danger of donors embarking on a high-level policy dialogue aimed at institutional change without adequate ground-truthing at the level of livelihood systems diagnosis.

Participants acknowledged that although all agencies needed to be aware of linkages between livelihood issues and macro policies, not all agencies had a comparative advantage for policy dialogue at the national level. Agencies with a comparative advantage at the community or district level could also make a valuable contribution in their own right. They could also increase their influence on policy by establishing partnerships with other agencies that had a tradition of policy dialogue.

An important debate centred on the ethics of attempting to effect changes in policy. Although some DFID participants emphasized that it was more cost- effective to go directly to the top (to the Minister or even to the President) to influence policy, other participants at the Forum and Web/E-Conference emphasized the need to change the policy-making process to make it more bottom-up and demand-driven. They cautioned that policy changes imposed from the top down were unlikely to be lasting because they depended too much for their implementation on continuity at the top and were likely to be reversed when the Minister or head of government changed.

Policy is not exclusively owned by governments but is the outcome of a pluralistic consultation and negotiation process. Policy changes that are driven from below - that have a strong grassroots power base and are supported by civil society - are likely to be more lasting.

As the Forum discussions and Web/E-Conference contributions highlighted, there is clearly a need for further discussion on which institutions to target, and at which level - local, meso or macro - in order to establish SL-enhancing policies.

What indicators can be used for impact assessment?

There was consensus that new types of outcome indicators are needed to assess the impact of SL approaches. Standard output-type indicators fail to capture the most important changes, such as project-assisted increases in the problem-solving capacity of beneficiaries. In particular, more work needs to be done on capacity-building indicators. Currently, we have few examples of indicators for measuring institutional improvements8.

There was less agreement among Forum participants on how to address the problem of relevant indicators. What is the best way to capture a project's impact on human and social capital development? How holistic should impact evaluations be? How can one avoid collecting too much unnecessary data? By involving the intended beneficiaries in selecting impact indicators relevant to their own priorities, the Bangladesh project was able to limit the range of outcome indicators monitored. But if donors are to compare project impact across villages, they cannot rely exclusively on the location-specific criteria suggested by beneficiaries. They will also need a minimum set of standardized criteria.

"The indicators that are used for monitoring and evaluation must be clearly linked to the problem analysis and the objectives. The project should not collect unnecessary data that are not clearly linked to the objective or the problem analysis. Programme information systems should be set up to capture both the intended and unintended consequences of program activities. These lessons learned can be derived from participatory monitoring systems and other aspects of the M&E system. Capturing the lessons learned will be critical to programme improvements. One of the key problems that implementing agencies have is allocating time and resources to document the lessons learned.

"To measure the impact of a livelihood programme, it is important to measure both criteria relevant to communities as well as normative criteria. Criteria derived from participatory approaches are the changes that are meaningful to communities. If these changes do not occur then the project has not brought about the kinds of improvements that are significant to the community. These measures may be very location-specific. Normative measures are important for targeting and allowing for cross-regional comparisons. Such measures are critical for donors and governments that need to make resource-allocation decisions across regions or across countries. Thus, both types of information need to be included in SLA M&E systems."

- Tim Frankenberger, CARE

Revision of the DFID SL framework

Several different versions of the SL framework have been developed. All are intended as tools to help people investigate livelihood strategies and understand them better. The frameworks were never intended as blueprints for analysis. Developers of the frameworks emphasize that no framework can contain every factor that affects livelihoods, and that the frameworks should be adapted and developed as practical experience is gained in working with SL approaches.

Nonetheless, Forum participants made several important observations about the framework and perceived inadequacies of its present form, which they felt could benefit from further development.

Making people visible. While the first principle of SL approaches is that they are "people-centred", people are not "visible" in the current framework. The fact that they are central to SL approaches could be made more explicit.

Levels of analysis of assets. The level at which livelihood assets are to be analysed is not immediately clear. It is important to distinguish between individually owned assets, such as land and livestock, and community assets, such as forests, grazing land, wells, roads and schools. Some means of distinguishing among these different levels needs to be introduced into the framework.

Socio-economic differentiation. It was also felt that the framework did not highlight differences between socio-economic strata within communities in their resource base, livelihood strategies and living standards. Members of poor households tend to be more vulnerable to external shocks than those of non-poor households because they own fewer assets. Policies, institutions and processes at the national level can result in highly skewed asset ownership. The poor usually have fewer livelihood options than the non-poor.

Incorporating historical and dynamic elements. Participants also felt that the SL framework was rather static. It was not immediately clear how dynamic elements, such as historical changes that did not necessarily contribute to vulnerability, might be incorporated into the analysis. It would be useful to emphasize the livelihood trajectories (ascending or declining) of different socio-economic categories of the population.

The framework needs to be sufficiently flexible to identify social networks that bind different livelihood systems together (Forum and Web/E-Conference). In many rural societies, socio-economic strata are bound together in interdependent livelihood systems, primarily where richer households with capital turn to poorer households for labour. Thus, livelihood analysis requires an understanding of how people depend on cross-strata social networks for asset-sharing, renting and co-ownership (e.g. of land, livestock, and fodder). Patron-client relations and reciprocal agreements for sharing labour or capital are important coping strategies for poor people in times of illness or other stresses and emergencies. Moreover, they lend legitimacy to the "rich" in positions of local authority. Horizontal social networks are also pivotal for addressing critical capital shortages among the poor, particularly through traditional labour-sharing and other reciprocal arrangements.

Cultural dimensions. The SL framework is based largely on experience from English-speaking countries. French- and Spanish-speaking practitioners experience some difficulty in working with terms such as livelihoods, which cannot be translated easily into one word in their languages. At the same time, there is a significant body of experience in Spanish- and French-speaking countries that deal with the same issues but, perhaps, have conceptualized them in different ways. A way of incorporating this experience into the framework and generating more culturally appropriate forms of the framework needs to be developed. Although sustainable livelihoods can be translated into Spanish as sistemas de vida y desarrollo sostenible, there seems to be no adequate French equivalent. In fact, none of the possible French translations below captures the concept fully.

Incorporating the political dimension. Most participants felt that, while the framework helped practitioners focus on policies, institutions and processes, the political dimension of these structures and processes needed to be made more explicit. Experience from the case studies suggests that projects or programmes attempting to address livelihoods in a holistic way will need to engage in the political sphere in order to have positive and sustainable impacts. Political elements that need to be reflected include:

• democratization;
• transparency and governance;
• the impacts of structural adjustment;
• the impacts of globalization.

These all have clear political dimensions and potential impacts on livelihood strategies. Modifications to the framework should make it easier for people to incorporate these dimensions into their overall analysis. The impact of macro-level processes on livelihood trajectories needs more emphasis. In its SL framework, UNDP uses a hexagon rather than a pentagon, with the additional segment representing political capital.

Means of analysing policy, institutions and processes. The focus on policy, institutions and processes was seen as a valuable element of the SL framework, but practical methods that might be used to analyse this area were felt to be lacking and needing development.

The SL framework helps to suggest possible project actions but does not provide adequate guidance on how to prioritize among them.

The measurement of assets within the framework does not allow for comparison between livelihood systems or for quantification against targets.

The SL framework is not easy to explain. DFID and CARE report that although governments, technicians and project staff readily grasp the SL guiding principles, it is much more difficult to communicate the SL framework to such an audience. CARE has addressed the problem by using participatory workshops for staff training. Each workshop starts from the SL guiding principles, and participants are encouraged to derive their own framework on the basis of the principles. DFID has found that beginning with the detailed framework, it is not easy to get messages across, but building up to the framework by drawing on examples allows it to be well understood.

IMPLICATIONS FOR DONOR AGENCIES

Increased programme flexibility

The consensus of the agency-based discussion groups was that their unnecessarily rigid requirements for gaining project approval presented major barriers to creating programmes that were flexible and demand-driven - i.e. characteristic of programmes adopting a sustainable livelihoods approach. Although agencies have begun to address these issues, further changes are needed.

IFAD. IFAD emphasized the need for better diagnosis, more flexible project designs, better continuity between diagnosis, design and implementation and well-focused supervision of projects.

IFAD participants believed that employing SL concepts and approaches could add value to IFAD projects by reinforcing the importance of concepts already understood at IFAD but not always put into practice. Areas where improvements are possible include refining operational approaches to effective poverty alleviation, household food security, grassroots capacity-building and participatory development. In addition, the value of placing these in a holistic framework was recognized.

IFAD recognized opportunities to promote SL approaches in improving flexible and participatory elements of project design and implementation. These included IFAD's strong commitment to building strategic partnerships with like-minded organizations; its ongoing emphasis on adopting the dynamic logical framework approach and, in particular, more fully integrating it into design and planning; and direct supervision of 15 projects, which provides opportunities for participatory process monitoring.

IFAD delegates also recognized the great potential for future partnerships with the other agencies represented at the Forum. These included: tapping DFID expertise in project design and monitoring; working with FAO on improving diagnostic and monitoring processes and continued collaboration on FIVIMS; benefiting from WFP's experience in vulnerability analysis and targeting; targeting with UNDP one or more countries to introduce SL approaches into the CCA/UNDAF process; and accessing CARE International's multilingual field and training experience for IFAD project staff and country-based pilot projects.

DFID. For DFID, the main challenge is to integrate SL approaches in those parts of the agency that are not concerned with natural resource management. SL approaches have been slow to penetrate fields such as economic policy, infrastructure, health and social development, which have adopted sector-wide approaches. The main capacity constraint is a shortage of practitioners with appropriate skills to implement SL approaches.

WFP. WFP has already introduced some SL concepts into its work, namely people-centred approaches, poverty focus, vulnerability analysis, gender analysis, asset creation (broadly defined to include human capital) and partnerships. However, certain aspects of SL approaches need more work, such as:

• M&E (reviewing systems to use assets as the common unit of accountability and feedback);
• ways of incorporating feedback into project management;
• activity selection (selecting activities by target groups rather than governments or donors and intersectoral work arising from livelihood systems diagnosis rather than existing institutional links);
• training.

Internalization of SL approaches

The final work of the Forum was to formulate strategies for internalizing SL principles and approaches within the work of each of the agencies.

UNDP institutionalization strategy

1. Perform self-critical diagnosis based on external evaluation.
2. Develop UNDP synthesis of UNDP SL achievements and potential (glossy) publication.
3. Sensitize administrator through moral persuasion.
4. Organize high-level technical workshop on SLA, co-hosted by Rockefeller and UNDP in collaboration with DFID and FAO.
5. Have PM/Ns brief UNDP divisional directors on outcome of this workshop.
6. Redefine UNDP/HQ SL team.
7. Produce series of papers on policy/institutional dimensions of SLA in collaboration with DFID.
8. Become member of or help establish effective SLA policy networks - multilaterals, bilaterals, academic.

WFP and SL approaches. The priority concerns are:

• Incorporate lessons from pilot activities in activity design and management.
• Develop minimum information sets based on livelihood elements.
• Advocate policy change through UNDAF.
• Adapt key livelihood elements to recovery and rehabilitation (IDPs).

In the application of livelihood elements to FAAD (Food Aid and Development) policy implementation, WFP will:

• build livelihood elements into FAAD Task Force work plan, emphasizing capacity-building;
• build livelihood elements into its Vulnerability and Analysis Mapping (VAM) work plan;
• mobilize additional resources for WFP/counterparts' capacity-building;
• ensure that its gender analysis tools and methods are SLA compatible;
• networking/share with partners its SLA lessons and experiences.

FAO internalization strategy. The FAO Strategic Framework (2000-2015) approved by the 1999 FAO Conference includes sustainable livelihoods as one of its goals, therefore, it is mandatory.

• SL principles (rather than a particular framework) should be more widely and systematically incorporated into FAO's normative and field programme.
• There are different stakeholders with different needs within FAO.

How can FAO internalize the guiding principles?

1. Include initiatives in the Medium Term Plan (MTP) currently being developed (for 2002-2007) and move quickly to consolidate potential interdepartmental initiatives.

2. Work toward strategy for impact at multiple levels:

• Continue to develop strategy to engage senior management.
• Strengthen linkages between headquarters and the regional and country level. (Pull in regional and subregional officers, multidisciplinary teams, using SL approaches as a means of working together - facilitate dialogue, share experiences and capacity-building; involvement in pilot sites; exchange of information).
• Develop country strategies that include FAO, United Nations agencies, donors, NGOs, CBOs government and Rome agency collaboration (FAO, IFAD, WFP).
• Use DFID, UNDP and CARE experiences and frameworks. (Don't reinvent the wheel.)

3. Build on FAO's existing initiatives:

• Make IWG-PA a driving force for internalization.
• Create inter-agency committees (e.g. FIVIMS).
• Use UNDAF.
• ACC network on Rural Development and Food Security.

4. Improve communications and learning opportunities:

• E-mail network with interested officers and partners.
• Incorporate principles in websites, briefings and seminars.
• Training in developing partnerships.

5. Develop partnerships both within and outside FAO:

• Potential initiative: joint pilot projects - country-level, multi-partner for the implementation of sustainable livelihood principles (action research).