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Economic Strengthening for the Very Poor (ES4VP)

The Economic Strengthening Pathway

Vulnerable households tend to allocate their scarce resources to maintain consumption levels and reduce risk rather than to maximize profit or income. This phenomenon is a major challenge for linking these households to growth-oriented strategies. Traditional models that have proven successful with more stable or wealthier households often fail when applied to more vulnerable contexts. These models may underestimate or ignore the role that risk plays in influencing household economic decisions – expecting the same profit-driven behavior demonstrated by less vulnerable participants. By understanding and addressing household risk, PEPFAR economic strengthening strategies can be more effective in reducing the impact of the HIV/AIDS pandemic.

While mitigating risk may influence economic behavior and decision-making at the household level, by itself it does not necessarily lead to widespread growth. Linking vulnerable households to growth strategies is vital for building assets, further reducing vulnerability, and increasing consumption levels. Many risk-centered interventions fail when they apply the same models for mitigating risk to fostering growth. By employing successful growth-oriented strategies, PEPFAR economic strengthening programs can achieve catalytic, systemic, and sustainable impact among vulnerable households.

Reconciling the need for both risk-sensitive and growth-oriented strategies is the center of the challenge for PEPFAR to reduce household vulnerability and improve family resiliency. The overall program framework should view economic strengthening not as a single event – a household was vulnerable and now it is not – but as a pathway towards growth and decreasing vulnerability. Such a pathway sees household progressing sequentially through several key outcomes. The entry points in this pathway will depend on the initial status of the target households, and the rate of progression will also depend on the capacity, orientation, and motivations of each individual household. As shown in Figure 3, the economic strengthening pathway comprises five sequential outcomes, where each outcome is dependent on the preceding one.[1] 

 

 

Figure 3.  Adapted from Economic Strengthening Pathway by Poverty Outreach Working Group in 2011

 

Several leaders in the economic strengthening field have begun to adopt the pathway concept. Most of these agencies have struggled to advance (or “graduate”) highly vulnerable households from direct income assistance (such as cash or food transfers) to more growth-oriented strategies. While each may identify different sequential phases, the common element is a directional pathway towards growth.[2]

 


 



[1] HH Econ Strengthening in Tanzania Jason Wolfe (p. 7)

[2] HH Econ Strengthening in Tanzania Jason Wolfe (p. 7)