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

Abstract

Major economic, political and social changes have taken place in Central America over the past decade.These changes have led to improvements in well-being and reductions in rural poverty rates, but the region is still characterized by persistent and stark inequalities in assets and incomes and high numbers of poor persons in rural areas.This inequality is most evident in terms of landholdings, but other key productive, social and locational assets are also unequally distributed among households and geographical areas.The asset-based approach considers linkages between households' productive, social and locational assets; the policy, institutional and risk context; their 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 amenable to different analytical techniques.It is suggested to combine 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.

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