A Capital Assets Framework for Analysing Household Livelihood Strategies: Implications for Policy

Recent analyses of poverty and well-being have broadened their focus from money-metric measures of income and consumption to livelihood strategies, in order to enhance understanding of the causes of poverty, the processes of increased well-being or impoverishment, household responses to opportunities, shocks and stresses, and the outcomes of policy interventions. The aim of this article is to assess the policy implications of adopting a household livelihood strategies framework for understanding poverty and deprivation. It will identify typical policy recommendations which emerge from a conceptualisation of household strategies as managing portfolios of capital assets, and briefly review experience with a view to assessing whether this analytical approach provides a satisfactory basis for poverty reduction policy. The discussion explicitly considers the characteristics of the household strategies adopted by, and the effects of policy on, the rural and urban poor.