Using an Asset-Based Approach to Identify Drivers of Sustainable Rural Growth and Poverty Reduction in Central America : A Conceptual Framework

The asset-based approach considers links between households' productive, social, and locational assets; the policy, institutional, and risk context; household behavior as expressed in livelihood strategies; and well-being outcomes. For sustainable poverty reducing growth, it is critical to examine household asset portfolios and understand how assets interact with the context to influence the selection of livelihood strategies, which in turn determine well-being. Policy reforms can change the context and income-generating potential of assets. Investments can add new assets or increase the efficiency of existing household assets, and also improve households' risk management capacity to protect assets. After all is said and done, a household's asset portfolio will determine whether growth and poverty reduction can be achieved and sustained over time. The asset-based framework is amendable to different analytical techniques. Siegel suggests combining quantitative and qualitative spatial and household level analyses (and linked spatial and household level analyses) to deepen understanding of the complex relationships between assets, context, livelihood strategies, and well-being outcomes. This paper - a joint product of the Environmentally and Socially Sustainable Development Vice Presidency and the Rural Development Family, Latin America and the Caribbean Region - is part of a larger effort in the Bank to strengthen analyses and strategies for rural development, and address policy issues and investment priorities