Both of the two key concepts in these guidelines - household livelihoods and institutions - are complex and difficult to define. The discussion of some of the key concepts below does not aim to offer the right interpretations or definitions of these terms - even experts have difficulties in agreeing about what they mean. It aims to help investigators to understand some of the alternative ways of interpreting households, livelihoods and institutions and to enable them to come up with a definition that they feel comfortable with and that is appropriate in their circumstances.
Household livelihoods, and the strategies that people use to create them, are at the core of development. People may be involved in different social and economic activities as individuals, but it is at the level of the household (see Box 1) that the real impacts of those activities are seen most clearly, and the well-being of the household is generally a key objective for most people, at least in rural societies.
How people define well-being varies. For poor households living in poor rural areas, well-being may mean just having enough to eat, shelter for the family and a basic level of security. For other groups, standards may be higher, but, whatever the definition, households will strive to achieve that level and sustain it. A livelihood is basically the means that a household uses to achieve that well-being and sustain it (see Box 2). Just how sustainable a households livelihood is will depend on many factors. For example, the activities that a household engages in to create its livelihood may degrade the resources on which it depends, making it unsustainable. But if a household has a diverse set of activities that does not damage the environment and ensures food and income throughout the year, that households livelihood is likely to be more sustainable.
BOX 1 - THE HOUSEHOLD
...a group of people who eat from a common pot, and share common stake in perpetuating and improving their socioeconomic status from one generation to the next. (FAO, 1992)
There can be no single definition of a household. Different cultures, and different social groups within cultures, will often think of the household in different terms. Households are usually based on family relationships, but they can often include people who have no kin relationship at all with other household members. Households may pool some of the resources available to individual members, but access to other resources may be different for different household members (for example, women may have less access to some resources than men). A whole household may be poor, but some household members may be poorer than others. In situations, for example where there is migration, some individuals may be members of more than one household. Usually, members of a household will have some common interest in improving their socio-economic condition from one generation to the next. So the meaning of a household always needs to be adjusted to local circumstances.
Poverty can be thought of as an inadequate livelihood outcome. It may be the result of the household having inadequate access to assets, like land, water, credit or social support. It may be caused by living in an area subject to acute vulnerability, where there is war, or drought or cyclones. It can also be caused by policies, institutions and processes that are not supportive of achieving an adequate livelihood. In some cases, the strategy that the household uses to combine the different livelihood elements at their disposal may not make the best use of them, leading to failure to provide an adequate livelihood.
BOX 2 - LIVELIHOODS
In these guidelines, livelihood does not just mean the activities that people carry out to earn a living. It means all the different elements that contribute to, or affect, their ability to ensure a living for themselves and their household. This includes:
The livelihood strategies that households develop to ensure their livelihoods will depend on how they can combine their livelihood assets, take into account the vulnerability context in which they live, and the policies, institutions and processes that affect them. The livelihood outcomes that households achieve with their strategies can depend on any or all of these elements.
The members of a household combine their capabilities, skills and knowledge with the different resources at their disposal to create activities that will enable them to achieve the best possible livelihood for themselves and the household as a whole. Everything that goes towards creating that livelihood can be thought of as a livelihood asset. These assets can be divided into the five different types shown in Figure 2. This division into five types of livelihood assets is not definitive. It is just one way of dividing up livelihood assets. Other ways may be developed depending on local circumstances. What is important here is that these are all elements of livelihoods that influence households directly or are potentially controlled by them.
Different households will have different levels of access to this range of assets. The diversity and amount of these different assets that households have at their disposal, and the balance between them, will affect what sort of livelihood they are able to create for themselves at any particular moment. These household assets can be thought of as a pentagon that may be relatively large, well-balanced and regular, implying a relatively strong asset base, or small and distorted, where there are either few assets available or where households are unduly dependent on just a few assets.
This asset pentagon can provide a useful starting point for household livelihood analysis, as it encourages investigators to take into account all the different kinds of assets and resources that are likely to play a role in household livelihoods. In the past, development workers often tended to focus very much on the physical capital (by providing new technology and infrastructure), the financial capital (by providing credit) and the human capital (by providing skills and training). But very often peoples access to natural capital and the key role of the social capital of households has not been properly taken into account. Using this pentagon as a guide can help investigators to get a more complete picture of the household and its livelihood assets.
Figure 2 Livelihood assets
For example, tribal peoples living in a remote forest area may have strong ties of kinship and mutual exchange (social capital), ample access to rich forest resources (natural capital) and an intimate knowledge of their local environment (human capital), but practically no financial or physical capital and limited access to formal education. The livelihood strategies they adopt will reflect this. They will use their knowledge to exploit a wide range of different natural resources in different ways, ensuring a supply of food, clothing, fuel and shelter through the year. Their ties of kinships and mutual exchange within their community will ensure that they are usually able to overcome episodes of vulnerability, such as sickness or the deaths in the family, without reliance on help from outside. But the physical capital available to them may be very specialized and appropriate to their local circumstances only. As a result they may have difficulty in adapting to any changes, such a those brought about by destruction of their forest environment or intrusion by outside influences. Similarly, their complete unfamiliarity with financial capital may leave them at a disadvantage if they find themselves involved in market transactions, even if they have products of potentially high market value.
Poor people in rural areas may have only their labour capacity (human capital) and the financial capital they can generate through their labour, but very limited direct access to natural capital, low levels of education and knowledge, and a very low social status that weakens their social capital base. The poorest households may have extremely reduced livelihood pentagons with extremely limited livelihood assets of any kind at their disposal.
A households access to adequate livelihood assets can be affected by many factors over which household members themselves may have little control. These factors might include:
Seasonal changes, which reduce or increase the availability of different resources at different times of the year;
Longer-term changes, or trends, which may affect different aspects of peoples livelihoods. These might include changes in population, environmental conditions, patterns of governance, economic conditions and technology. For example, changes in the economic environment due to globalization may create either more competition for households produce or new opportunities and markets for goods.
Shocks, such as natural disasters, wars or civil unrest, or episodes of disease or ill health, which may suddenly reduce households resource base or their access to key livelihood assets.
These are all factors that may cause households to become more or less vulnerable to poverty and can be thought of as the vulnerability context in which households operate. This context will influence the ways in which households choose to use the various assets at their disposal. For example, where the risks of drought or flooding are high, rural farmers may choose to plant less productive or less valuable crops in favour of crops that are more resistant to these types of risk.
BOX 3 - INSTITUTIONS, ORGANIZATIONS AND PROCESSES:
... Institutions are complexes of norms and behaviours that persist over time by serving some collectively valued purposes (Uphoff 1986)
They are the rules of the game of a society (North 1995)
Organizations are structures of recognised and accepted roles, formal or informal (Uphoff 1986);
[They] are the players: groups of individuals bound by a common purpose (...) (North 1995)
If structures [formal institutions and organizations] can be thought of as hardware, processes can be thought of as software. They determine the way in which structures - and individuals -operate and interact. (DFID, 2000)
The institutions referred to in the title of these guidelines consist of considerably more than the sort of formal, organized institutions that development workers usually deal with. In these guidelines, the term institution includes a broad range of organizations, policies and processes that may influence both the choices that households make about using their assets, and the types and amount of assets that they are able to access. Some of the different elements that make up this group are explained below.
Policies, usually decided upon at different levels of government, will affect how households are able to take decisions or make use of the livelihood assets at their disposal. For example policies for giving more responsibility to village-level institutions may give local people more influence over the decisions that affect them directly. Policies to protect the environment by controlling natural resource use may make it more difficult for poor people to gain access to resources they normally use to support their livelihoods. The process by which policies are formed may be as important as the policies themselves. Groups of people who are not consulted about policy, or are not represented in the mechanisms that lead to policy formulation, will have no way of influencing what policies are decided upon. As a result, they are more likely to be adversely affected by those policies. Policies are particularly important for people concerned with improving household livelihoods because policies can be changed.
Institutions are also processes that include a wide range of arrangements found in societies everywhere. These arrangements can be more or less organized (and may include organizations), structured or unstructured, visible or invisible. Some definitions of the terms institution, organization and process are given in Box 3. Box 4 discusses some of the distinctions that can be made between institutions and processes while Box 5 talks about the differences between institutions and organizations.
BOX 4 - INSTITUTIONS AND PROCESSES
When you say the word institution, most people think of formal, organized and visible organizations that have a value for society as a whole and affect large numbers of people. For example, the national legislature, parliament, big private corporations, religious institutions, marriage. But there are other forces, or processes, at work in most societies that are sometimes more difficult to identify clearly but can be equally important for large numbers of people and society as a whole. These are also institutions, because they have value for many people and affect their lives, but they are not always so visible or formal. This is because they do not usually dictate what is done, but how it is done - they are the rules of the game in society. Some of these may be formal and recognized - the law is a process, the idea of private property is institution and a process - but often they will not be written down anywhere. For example, there may be very few women in senior government posts, even though there are laws in place that ensure equal rights for women, because of deeply rooted prejudices against women in positions of responsibility. Even where women are promoted to potentially influential positions, they may be regarded as less deserving by their male colleagues because they are regarded as having been helped by legislation in support of equal rights for women. This may make it very difficult for them to work effectively, so perpetuating the negative attitudes of their male colleagues. These processes are part of what is called institutions in these guidelines, but they are a particular sort of institution with particular attributes.
These definitions of institutions are open to different interpretations and debate. In these guidelines, all of these different arrangements, whatever their attributes, are regarded as institutions of one kind or another. But people trying to understand institutions in the field so that they can develop programmes to improve the livelihoods of the poor need to have some way of characterizing different types of institutions. To do this, it is probably better not to worry about whether a particular arrangement can be called an institution or an organization or a process but to think of the different characteristics, or attributes, that different institutions (including organizations and processes) might have. There are at least three main sets of attributes that are likely to be important for investigators.
BOX 5 - DIFFERENCES BETWEEN INSTITUTIONS AND ORGANIZATIONS
Some institutions are more visible than others because they have a clear structure, they are formal, in the sense that they have clearly defined rules and regulations, and they are organized. By contrast, other institutions may be invisible because they do not have a very well-defined structure, they are informal, they may not have any written statutes and they may not have any obvious organization at all (at least not in the eyes of the outsiders investigating them). For example, the official government of a village may have an office and a series of people occupying well defined roles - the village chief, his secretary, and various other people who perform officially defined roles in the community according to formal rules and regulations laid down in the statute books and the laws of the country. This is a visible institution.
At the same time, in the same village, there may be a far more invisible form of community governance where the village elders are regarded as having the last word in the resolution of conflicts. The role of these elders will often not have any formal recognition, and it may not be well-defined or written down. As a result, the roles and responsibilities of the elders may change significantly over time. There may be little organization or hierarchy within this group even if they wield a significant amount of power within the community.
Objectives and activities
Some institutions have objectives that are practical and directly concerned with peoples day-to-day life and undertake activities of one kind or another to achieve those objectives. Other institutions are more concerned with establishing norms of behaviour and may not carry out any real activities at all. A law is a good example of an institution that sets down norms of action, but may not explicitly state what specific actions need to be carried out to make sure those norms are maintained.
Membership and participation
Some institutions are made up of a well-defined group of people (who either chose to become members or were born members) and have clear, exclusive criteria for membership. Others are more inclusive, often because they dictate how people in general should behave rather than what particular people should do.
These attributes can be visualized (see Figure 3) to help investigators identify and think about particular institutions and the characteristics they do or do not have and why. It may not be possible to locate institutions precisely along the different axes in this diagram, and it is very difficult to measure these attributes. Many institutions will have attributes from both extremes of these axes - for example visible and invisible elements. But this diagram can be a useful brainstorming tool - by visualizing institutions in this way, we can understand their attributes and characteristics better and find local institutions that we might otherwise ignore.
Figure 3 The Attributes of Institutions
Examples of relatively visible, exclusive and practical institutions are:
government departments and offices responsible for implementing policies and programmes and providing services to the people, as well as scientific centres such as agricultural research stations;
political parties usually set up to represent the interests of particular groups in society and influence new policies, laws and regulations either locally or nationally; political parties are usually as visible as possible(!), structured and organized, and they usually claim to be practical in their orientation - achieving concrete benefits for the groups they represent and society at large;
political assemblies that are responsible for approving laws, and the judiciary and enforcement agencies that may be more or less active in enforcing rules and regulations and protecting the rights of different groups or individuals;
private companies or corporations that own resources, provide services, operate marketing facilities, provide employment and produce wealth for their owners and commodities for consumption.
Households that have access to these institutions, or are members of them, may be able to obtain better access than others to the services they provide, the resources they control or the rights that they protect.
Examples of less visible, more informal and less practical institutions that have a more normative role and may be more inclusive in their membership and participation are:
rules of the game or the way things are done, either in society in general or within organizations and institutions; these rules may be informal (less structured/organized) and the result of accepted practice or habit, or they may be more formal and have almost the same weight as law, even if they are not framed in legislation; for example, by law, fishing on a particular area of water may be open to everyone, but in fact the right to control access may be recognized as belonging to a particular individual or community, and it may be accepted practice to pay that individual or ask for the permission of that community in order to fish there; another example might be where there are environmental regulations that limit development in forest areas, but people or organizations with influence are able to ensure that these regulations are overlooked to enable them to exploit those areas. Within organizations, other informal rules may be important, such as officials always agreeing with what their superiors suggest and being reluctant to take any initiative on their own;
markets for goods and services and how they operate; markets may be free, or regulated by government; they may be controlled by interest groups or individuals or they may be accessible to practically anyone;
language may play an important role, particularly in multi-lingual societies; where one language is recognized as the official language, either formally or through accepted practice, access to institutions and services of government may be more difficult for those groups that do not command that language or do not wish to use it;
the communication channels, and the way they are established and operate, and what type of information they transmit, including how that information is stored, accessed and used. These channels are important because information is not generally equally accessible to all, either because of the way it is communicated, the language used or the technology involved, and this can have an important influence on households ability to improve their knowledge and capacity;
the power relations between different groups of people in society, often defined by the prevailing culture or religion; for example, gender (what behaviour is acceptable for men and women), age (how the old and young are regarded and treated), class (how the social and economic status of different groups is generally understood) or caste (the various restrictions surrounding caste that influence what people of different caste groups can and cannot do to change their livelihoods).
Figure 4 - Institutional Attributes: Government Departments
Unlike those factors that form the vulnerability context, the factors that make up these policies, institutions and processes can be changed, but will usually require action at higher levels, such as the level of national government or society as a whole. Policies, major changes to organizational and institutional structures, and changes to laws and regulations are usually decided at this level. But it is extremely important to take these higher level factors into account when looking at livelihoods - it is no good proposing changes to local institutions if laws and policies do not allow those changes to take place.
Local institutions are those policies, institutions, and processes that are found in a specific geographical area and are more likely to directly affect the households living there. Many local institutions will not be limited to that area alone - the regulations surrounding the role of women may extend right through society, but they may be apparent in particular ways in a local area depending on the people involved and the local culture. Likewise, policies may be established at a national level, but they may be implemented in different ways in different areas.
Examples of how these different attributes might be encountered in real institutions can help us to understand this better. These are shown in Figures 4 and 5.
Figure 5 - Institutional Attributes: Traditional Land Tenure System
Taking account of the livelihood assets at their disposal, the vulnerability context in which they operate, and the policies, institutions and processes around them, households tend to develop the most appropriate livelihood strategy possible. These strategies may lead to more or less satisfactory livelihood outcomes - poverty is the result of unsatisfactory livelihood strategies, because the strategies are based on insufficient livelihood assets, they are vulnerable to shocks and changes, and/or the policies, institutions and processes they are subject to do not support them effectively.
The aim of the investigation described in these guidelines is to understand how this whole range of local institutions affects the livelihoods of people in a particular area. These linkages will be discussed in more detail, but the broad relationships between these different elements are represented in Figure 6. This framework can help investigators to develop questions about peoples livelihoods and to organize what they learn. Naturally, investigators will often encounter issues that may not fit neatly into this framework, but this does not mean that investigators are off track, or that the framework is inadequate. The framework aims to help investigators to think about livelihoods and institutions and the relations between them - it will not answer all the questions for them.
Figure 6 - A Sustainable Livelihoods Framework
The Sustainable Livelihoods Framework described above serves to explain some of the different linkages that can be encountered between local institutions and livelihoods. But in the framework, these linkages remain relatively abstract. What does a linkage mean in more concrete terms? A linkage here is taken to mean any way in which an institution influences or affects a livelihood strategy undertaken by a particular group or individual, or, vice versa, any way in which a livelihood strategy influences or affects an institution.
In terms of the livelihood framework described above, this may mean the way in which an institution affects the different livelihood assets or capitals that people use for their livelihoods - by controlling access to those assets, or by influencing how, where, when and by whom they are used. For example, an environmentally protected area, such as a park or game reserve, represents a particular type of local institution that could link with the livelihoods of people living in the area in several different ways. A protected area would itself be the product of several other institutions - such as the Ministry of the Environment; the legal system that allows protected areas to be created; the constitution of the country that mandates the government to protect the environment; and local pressure groups that have persuaded the government to set up the protected area. The creation of a protected area might strongly influence peoples access to natural assets within the area - households that went hunting for animals may no longer be able to do so; people who collected wild grasses, firewood or wild fruits may have their access to these regulated or stopped altogether; grazing of livestock may be prohibited inside the protected area. Peoples livelihood assets could be affected in other ways as well. The protected area might limit access to traditional religious sites or burial grounds that have particular cultural significance, having an impact on peoples social capital. If local people have to move their residence to outside the protected area, their physical capital will be affected. Being made to shift from an area they know well to an area where they are unfamiliar with the natural environment will reduce peoples human capital as their acquired knowledge and skills may no longer be relevant.
Even without directly affecting the assets that people use, an institution may also change the context in which people live in a way that will affect their vulnerability. In the case of the protected area, successful conservation of wild animals within the area might increase the vulnerability of people living outside to having their crops destroyed or their lives threatened. On the other hand, in the longer term it may reduce local peoples vulnerability to natural disasters like drought or flooding by protecting watersheds, wetlands and local microclimates.
A local institution may also interact with other institutions in ways that will affect the livelihoods of people. For example, the setting up of a protected area may mean that local government departments and NGOs are able to gain access to more funds from national and international donors to help local communities deal with their changed circumstances. But at the same time it might introduce new institutions into the area - such as the Parks Service, or environmental groups - that have roles and responsibilities that conflict with existing institutions. Responsibility for controlling ritual sites or decision on land-uses may pass from traditional village government or religious and ritual authorities to park managers.
The linkages in the example above are relatively simple, although they could have very complex impacts on peoples livelihoods. But linkages between local institutions and livelihoods can take many different forms, and it is precisely the potential complexity of these interactions that makes them important. It also makes it difficult to categorize linkages in a simple way. The relationship between a particular institution and a particular livelihood strategy will often operate on several different levels, all of which are significant.
Another example might illustrate some of these potential complexities and help readers to understand what a linkage means. People from a particular tribe or clan living on an island might only marry people from another lineage group situated on the mainland, this being a custom that constitutes a local institution. The linkages of this institution with peoples livelihoods could operate on several different levels. An integral part of marriage ties might be the exchange of rights of access to natural resources, like fish in the waters around the island. For people on the island whose livelihoods depend on fisheries, the constant acquisition of rights to fishing by people from the mainland through marriage to islanders might mean that more and more people are able to come and fish in local waters, eventually depleting the resource and reducing the viability of fisheries as a livelihood strategy. In return, this marriage institution is being influenced by the fisheries livelihood strategies of the mainlanders.
There would also be advantages to this arrangement. It might cement links of mutual aid with groups on the mainland who perhaps have different livelihood strategies than those living on the island. The ability to call on ties and obligations with these people in times of need - for food, money or water supply - might represent a means of diversifying, and so strengthening, islanders capacity to ensure an adequate and sustainable livelihood for themselves. This would significantly reduce their vulnerability to sudden shifts in the market or resource availability. Clearly, the links would operate both ways, with people on the islands obliged to help out their relatives by marriage on the mainland. On heir part, the mainlanders sponsor some children of their new relatives on the island to go to school on the mainland, providing them with food and putting them up in their houses.
This single institutional arrangement could have other effects and influences on peoples livelihoods. One or the other of the two social groups involved might have better political links with the ruling elite of the country. The benefits from these links might also be transferable to the other groups, encouraging more people to migrate to the capital where they are able to find work or positions in public administration. This in turn might ensure a regular flow of remittances to home villages, constituting an important alternative source of livelihood that might supplement, or even replace, natural resource use. Connections with government acquired through marriage links might also help to attract government services and resources that would not otherwise be accessible.
This institution of marriage off the island could also have important interactions with another institution -the market for local goods. As well as ensuring exchange of goods through relations of mutual self-help, the traditions linked with the marriage of islanders with mainlanders might also constitute a means of establishing vital marketing links - regular meetings or fairs where islanders and mainlanders sell their goods to each other (and identify possible marriage partners). Without these market outlets, peoples access to income or goods for exchange might be limited, negatively affecting their livelihoods.
Musa is unsure where to start. Her experience working in participatory development programmes for NGOs has given her a good grounding in understanding the livelihoods of the poor, but she does not have any specific experience in looking at institutions, and is even a little unclear about what the term institutions really means. Fortunately, one of her contacts sends her a set of FAO guidelines on Understanding Linkages between Household Livelihood Strategies and Local Institutions that she decides she can use as a basis for her study.
Musa has a team of three people working with her. Ravi is a specialist in rural communications who is also an ex-NGO worker with extensive experience in participatory development programmes. His skills as a facilitator at the field level are already well-proven, but he has never done any research work. Musa and Ravi have two field staff working with them. Diane is a former rural health worker who used to work for the Ministry of Health and has recently completed a one-year field extension course. She lacks experience in dealing with rural development issues other than health, but she is eager to try out some of the new skills she has learnt during her course. Her experience in the health sector included working on a health survey where she was also involved in some data analysis, so she has experience with computers and databases. Musas other field worker, Daniel, was selected above all because of his knowledge of the project area. He has never worked in rural development projects before but helped the project formulation mission as a translator and was highly recommended by them. Musa has already been impressed by his excellent rapport with local communities and his vast knowledge of the local culture but has noted that he has a tendency to assume that he already knows everything.
Musa feels confident that, once they get out in the field, this team can do the work, but she thinks that they will need help in designing the investigation and analyzing the results because none of them have really had to deal with institutions in the past. So she gets permission from the team leader to recruit at least one extra person with relevant experience. Musa mobilizes some of her NGO contacts, who put her in touch with a researcher, Dewi, at a university in the provincial capital. Dewi worked in the past on a foreign-funded research project looking at womens participation in local organizations. Since then, she has been preparing a PhD on womens institutions in the country and seems to have the understanding of institutional issues that Musa and her team need. Musa travels to the university and discusses the investigation with her, and Dewi agrees to join the team for a month as she cannot take more time off her studies and teaching responsibilities.
During their discussions of the study and their review of the guidelines provided by the FAO publication, they agree that Musa and her team should work with Dewi in preparing the study but will then carry out the initial community profile by themselves. After this, Dewi will join them in the field to help with the more detailed field work on livelihood strategies and local institutions. Dewis supervisor also proves helpful and arranges for Musa to have access to the university library to look up any relevant literature as well as recommending some useful titles that he himself is familiar with.
With this team at her disposal, Musa sets to work. Given the timeframe of two months, Musa allocates the first week for carrying out a review of the literature at the university, followed by a two-day session with the whole team, including Dewi, to plan the investigation in detail. They realize that this planning session will be particularly important as they all need to better understand the subject of the investigation. They decide to have this planning workshop at the university so that Musa and her colleagues will not be distracted by routine work demands and can concentrate fully on the preparation of the study. Immediately after this, Musa, Ravi, Diane and Daniel will head back to the field and carry out an initial community profile lasting a week. Then, Dewi will join them to analyze the results of the community profile and prepare the rest of the field work. Musa realizes that the timing of the rest of the field work will have to be flexible, but they aim to have enough information to begin final analysis after about two weeks so that Dewi will have time to help them prepare an outline of the final output.