C. Moser 1

Key Socio-economic and Political Issues:

Getting Assets Right in Macro Social Analysis

Caroline Moser Visiting Fellow

Brookings Institution

Conference on Making Macro Social Analysis Work for Policy Dialogue

World Bank Social Development Department Washington DCMay 16-19 2006

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Background: Why are assets important?

Objective: To identify the importance of understanding individual, household and collective asset accumulation in macro social analysis

Recognition of the importance of institutions in CSAs But where do institutions ‘fit’ in terms of assets Widely referenced but multiple meanings? CSA have huge agendas. Need to identify relevance in terms of poverty reduction

strategies

Workshop opportunity – work in process on asset accumulation policy Current research project on intergenerational asset

accumulation and poverty reduction in Guayaquil, Ecuador Assets / livelihoods review presented at Arusha

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Structure of presentation

Why are assets important? To identify the importance of understanding individual,

household and collective asset accumulation in macro social analysis

Assets or livelihoods? To distinguish among livelihood, social protection and asset

accumulation strategies

Can micro data contribute to understanding macro processes? To show how micro-level studies can assist in moving from static

poverty ‘snapshots’ to identifying longitudinal asset accumulation processes

The assets-opportunities-institutions nexus: what questions to answer? To explore the data needed to identify the broader institutions

and opportunities that facilitate or constrain asset accumulation

Do we need to distinguish between first and second generation asset accumulation contexts? To recognize the data implications of different asset

accumulation contexts

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Assets or livelihoods: concepts?

What is an asset? A stock of financial, human, natural or social resources

that can be acquired, developed, improved and transferred across generations. It generates flows or consumption, as well as additional stock (Ford 2004)

Assets are not simply resources that people use to build livelihoods: they give them the capabilities to be and act (Bebbington 1999)

Commonalities in asset-related concepts Roots in poverty alleviation / reduction debates of 1990s Influenced by work of Sen, Chambers and others on

entitlements, assets and capabilities risk and vulnerability

Consensus around a number of concepts particularly capital assets Physical, financial, human, social and natural capital

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Sustainable livelihoods, social protection or asset accumulation:

Is it useful to distinguish among different asset-related frameworks? Common concepts but differences in emphasis between

frameworks Implications for focus of data collection, institutions and policy

recommendations

1. Sustainable livelihoods Livelihoods comprise the capabilities, assets and

activities required for a means of living with a range of assets needed to achieve positive outcomes (Carney 1998)

2. Social protection Public interventions to assist individuals, households

and communities in better managing risks ..by preventing, mitigating and coping with risks and shocks’ (World Bank 2000; Holtzmann and Jorgensen 1999)

3. Asset accumulation Specifically concerned with assets, and long-term

sustainable accumulation strategies. Closely linked to capabilities and power, with managing risk relating to proactively identifying and investing in opportunities.

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Summary of policy approaches

Policy Approach Objectives

Social protection Provision of protection for the poor and vulnerable against negative risks and shocks that erode assets

Sustainable livelihoods approach

Sustaining activities required for a means of living

Asset accumulation policy

Creation of positive opportunities for asset creation

Can micro data contribute to understanding macro processes?

Asset building over time in Guayaquil Ecuador

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The contribution of micro data: Research results on the accumulation of capital assets

Physical Assets: Housing Housing consolidation is a priority in the first stages of settlement There was greater consolidation between 1978-92 than from 1992-2004

Human capital: Education Parents make trade-offs between their own consumption and their

children’s education Gender and human capital: Girls are better educated than sons; but both

are better educated than their parents

Community and household level social capital: Community social capital essential for contestation with the state for

physical and social infrastructure: once consolidated and community-based services cancelled this declined

Household social capital increased between 1992-2004 with increasing reliance on extended family support and migration remittances

Intergenerational asset transfers Children benefit from their parent’s physical asset accumulation: More

than half still live on the family plot Children have far higher expectations than their parents in terms of

consumer durables: meet the need by credit (86%); selling drugs; house and street robbery and public transport attacks

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Strategies

Opportunities

Assets

Institutions

Framework for Asset Accumulation

Asset-institutions-opportunities nexus

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The assets – opportunities – institutions nexus What questions do we need to ask?

To explore the data needed to identify the broader institutions and opportunities that facilitate or constrain asset accumulation: This provides the rationale identification of:

Institutions The law, norms and regulatory frameworks that block,

provide access or facilitate asset accumulation. Mediating structures include: State, private sector, civil society, households

Opportunities The formal and informal context / enabling environment

within which actors operate Life cycle, macro-political, macro-economic environment

Strategies The means by which social actors transform asset

endowed into accumulated assets Process is determined by individual and collective agency

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Do we need to distinguish between first and second generation asset

accumulation contexts? To recognize the data implications of different

asset accumulation contexts and associated institutions

First’ generation policy Provision of social and economic infrastructure

essential for accumulation of assets such as: human capital (health and education) Physical capital (housing) Financial capital (Productive durables)

Assumption: once provided wellbeing improves and development occurs

BUT: Does not necessarily create conditions for further asset accumulation

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Second generation asset accumulation

Moves beyond traditional sectors and institutions Incorporates both new opportunities and risks

Globalization, global warming and natural disasters, conflict and ‘fragile’ states, accelerated urbanization, inequality, violence

Incorporates citizenship as basis for turning rights into assets

Recognition that assets are not static Constant revalorization and renegotiation over value of

assets influenced by:

Changing macro-economic and spatial environment Incorporation of international migration

Transnational asset accumulation opportunities associated with remittances

Changing state structures: Insecurity associated with fragile, conflict and post –

disaster contexts

Changing household and individual aspirations Impacts of increasing alienation, exclusion and

inequality

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Second generation asset accumulation policy Designed to strengthen accumulated assets and ensure their

further consolidation rather than erosion

Citizen rights and accountable institutions Strengthening social justice through accountable legal systems Empowering communities to access and contest asset-based

rights Labor rights

Gender-based rights of working women Pre-school education Adequate childcare facilities

Human security and development Incorporating human security into productive asset building

Financial institutions Access and insurance: to ensure financial capital further

accumulates