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3.2 Linking livelihoods

We now move onto a discussion of how livelihoods are linked, both via the pillars of development that we have just discussed and by various processes of co-ordination.

Development at different levels of social organisation

Our capitals/assets diagram also draws attention to the fact that development can take place at different levels of social organisation, from the level of the individual and household through to the national and global levels. For example, we can talk about development of the global economy, the national economy, the provincial economy, or even the household economy. Indeed, it is the latter that we examine in the livelihoods framework, which highlights, among other things, various influences emanating from the wider economy. Bear in mind, though, that the levels of social organisation (household to global) that we have been referring to here do not present the whole picture of how societies are organised. There are other groupings that cut across these simple boundaries - commercial firms, special interest groups, religious and ethnic groups are obvious examples.

Each level of social organisation can affect other levels in some way or other. These relationships are depicted by the vertical arrows in the diagram in 3.1.1.

Can you think of examples of what these relationships might be?

There are obviously many types of relationship, and whilst they are far too numerous and complex to explore here in any detail, it is worth considering the following.

As we noted earlier in relation to the livelihoods framework, social capital affects the access that individuals have to other assets. However, social capital can have positive effects for some and negative effects for others. For example, an individual's membership of a community organisation (a form of social capital) may give that person easier access to credit or a natural resource. On the other hand community rules that exclude women from participating in community decisions may strengthen men's access to assets, whilst weakening women's access.

The interdependence of livelihoods

The very existence of social organisation (at whatever level) ensures an interdependence between people's livelihoods. We highlight two main types of interdependence.

In other words, one person's ability to access and use assets, as well as their ability to buy or sell goods and services depends crucially upon other people's abilities in this regard. That is, it depends upon other people's access to assets and other people's demand for, and supply of, goods and services.

The effect one person's livelihood has on the livelihood of another can be positive or negative. For example, person A's livelihood will be enhanced if person B's livelihood provides A with greater opportunities to supply (or consume) the goods and services demanded (supplied) by B. However, person A's livelihood may be undermined if B is competing with A to buy from or sell to the same markets. Whether a particular individual experiences positive or negative effects depends upon how their livelihood strategies relate to those of others and on the rules governing exchange.

More generally, person A may have greater access to assets as a result of those enjoyed by B, or less, depending upon whether B's strong asset position has the effect of enhancing or diminishing the assets that are available to person A. Which effect prevails will be shaped by the formal and informal rules that govern the allocation of resources between individuals, households, communities etc (column B in the livelihoods framework). Consider the following two hypothetical examples. They are extreme, but should be illustrative.

Of course most societies, at whatever level of social organisation, operate somewhere between these two extremes. Taxes, subsidies, and other less formal mechanisms serve to redistribute resources, whilst markets and other forms of incentive foster competition. Each shapes the effects that one person's livelihood has on others.

Competition and co-operation

It is probably fair to say that the development of assets requires elements of both competition and co-operation. Without co-operation there would be no society, and without competition there would probably be no development. A combination of the two is required if the social and economic goals of development are to be achieved.

Ultimately, it is the formal and informal rules that govern co-operation and competition that determine the size of the asset base and the way in which its benefits are distributed. These rules shape the livelihoods of poor people and determine the extent to which they are able to participate in wider development processes. We shall say more about these rules in the final section of this unit.