The case of the informal economy being considered as an entity that is different from the rest of South Africa’s economy is being exclusive (Hovsha and Meyer, 2015). But the livelihood theory discusses the potential and ability of informality to reduce poverty through the creation of jobs in an environment where there are limited sources of opportunities. The theory emphasises a transformative process of perception as a necessity to harness the potential for the informal economy, to integrate and contribute to the expansion and development of the South African economy overall.
2.4.1. A poverty reduction strategy
The livelihood approach was recognised by the White research of 1997 in the International Development Conference as a prominent strategy for productive development. The initial idea was to focus, on an international level, on strategic development based on the goal of poverty eradication and social dilemma rehabilitation, and to promote an environment that benefited the poor via social and economic growth. Solesbury (2003) acknowledged the importance of international development as a tool of the Labour Administration’s 1997 White Paper on the support of the livelihood approach. Through international sustainable development support system and policy formulation, the aim was to create sustainable livelihoods for the poor and endorse environmental conservation as one of the prerequisites for human development (DFID, 1997).
Khuzwayo (2016) characterises the livelihood approach as a poverty reduction strategy, where a livelihood entails accessibility to various services, not only at home but in work places as well. In the informal market the idea of having assets, resources, capabilities and access as tools for acquiring the means to make a living means the availability of a well- structured approach that does not overlook the necessary elements that promote life for all.
A sustainable livelihood for the poor is considered as sustainable when is can cope with stressful situations and not cause more problems such as a rise in unemployment and the numbers of the working-poor. A sustainable livelihood must be able to recover from shocks, and in this context it must be able to recover from informal market shocks.
Chambers and Conway (1992), state that in order for the livelihood approach to meet its goals, there must be continuous provision of sustainable livelihood opportunities for the present and next generation. The benefits of the approach must be inclusive in the short and long-term and on a local and national scale. The approach must also be resistant towards stress and shocks, and be able to maintain and promote capabilities and assets. The principle of resilience within the approach is essential as it comprises of internal and external protection. In the informal market an indicative resilience strategy must be active against
38 economic crises and be resilient to governmental regulations that are inconsistent with the operational factors that informal actors engage in (Moyo, 2018). The social and material resources are essential and policy should contain the elementary prospect of natural, social, human and physical resources (see figure 2.2).
Figure 2. 2: The five capitals of sustainable livelihood Source: Scoones (1998).
a) Inclusiveness as a strategy
Participatory development is the initial father of the notion of sustainable livelihood theory, arising from the initial work of Robert Chambers (1980s) (DFID, 2000). Chambers defines his model as a reference to community empowerment in which locals are owners of development programmes. This approach presents a more inclusive strategy of public participation which gives the community the power to design their own developmental initiatives. The theory recognises the way in which the deprived and poverty is understood.
The theory emphasises that the poor’s realities and priorities require critical consideration.
The theory suggests the role of livelihood as opposed to income as a key function for addressing deprivation, and this includes a person’s capabilities, general support, tangible assets and resources that are shared (the means of gaining a living).
Chambers (1994) characterises the informal economy as an environment where multiple activities occur and the formal economy lives with the security of knowing only one “big activity” (fixed income). The theory mentions livelihood strategies where individuals diversify their livelihood strategies for the purpose of improving their life quality, to decrease their vulnerability, and to increase their income. This is reliant on the informal economy which gives such opportunities (DFID, 2000). The livelihood theory discusses the importance of supporting the informal economy via the outlining measures of protection. These include
39 infrastructural development, rights, the removal of restrictions to economic growth within a local setting and providing accessibility to strategic locations in the informal sector. It further condones giving attention to the informal economy as it is vital for the survival of the poor, and thus it should be given space within the current context of South Africa (Chambers, 1994).
2.4.2. Livelihood vs. increasing population and roles performed
The 1980s marked an era of quick access to information via an inventory identified as the Rapid Rural Appraisal (RRA) which was established in place of the sample survey methods used to collect data (Chambers, 1994). The RRA was envisioned as an inclusive approach where the community participates via various strategic methods such as interviews (semi- structured), modelling and mapping of assets, and discussions were to be held with locals during transect walks to analyse and examine land zones and land features. The idea was thus to utilise local knowledge in the planning phase at a macro level, however, the strategy was not successful as the community was not actually included in any decision making processes. The concept of participation was envisioned as a necessity after social instability was experienced, and thus the Participatory Rural Appraisal (PRA) was established. The PRA went on to gain acceptance and popularity in the 1990s (Ellis, 2000).
The PRA process involved communities’ participation throughout the process of collecting information, planning and decision making (it was called ‘handing over the stick’) and the various stakeholders acted as facilitators. The idea was to maximise the influence on the communities, to get them to learn and acquire the experience needed to get things done themselves. This would gradually reduce the role of outsiders over time, and this promotion of empowerment and participation was seen as a powerful influencer (Ellis, 2000). Arising from the PRA was the concept of ‘sustainable livelihoods’ (SL). The initial plan was to establish a framework that was built upon the PRA, a development concept that entailed the participation of local people according to the Department for international development (DFID) (2000).
The DFID described the methods of eliciting and extracting data as helpful, as they allowed the collection of data from the community to inform planning and design, and to monitor and evaluate the activities and results of an initiated project. The concept of a sustainable livelihood was strategically associated with empowering the community to participate in developmental processes as a method of reducing poverty and achieving sustainable development at a societal level (DFID, 2000).
40 2.4.3. The importance of the addressed policy
Policy is considered as a facilitative instrumental that is essential for the implementation and efficiency of any goal that government plans to initiate. For the livelihood approach to function as intended there is a clear emphasis on policy formulation that will guide and protect (Morse et al, 2009). However, placing the livelihood approach into practice is a complex and difficult task including the various overlapping problems previously reported regarding policy making. As identified, the majority of developing countries’ informal sectors haven’t been integrated into policy frameworks (Ngundu, 2010). This emphasises the critical assessment of the livelihood approach as an arbitrator of evidence-based policy. As such it will be a mediator, exploring informal market problems and how they can be addressed, paving the way for a sufficient and functional livelihood approach. Existing policy frameworks and policies which are to be established must be contextually examined, along with the institutions within which the informal market is included. This is to measure the extent of the vulnerability of the informal sector as a whole and to determine how fast it can react to certain shocks. This proposition includes the assessment of authorities in their ability to limit, prevent and act on any damages that emerge.
Examination of the potential agenda of a policy assist in establishing successful development principles that are vision or goal based. The examination should internally reflect on evidence of pros and cons, limitations and technical influences. This will outline major areas of concentration where interpreted logic on the nature of unique characteristics of all informal markets and operational systems is identified and clearly addressed. After commencement of development and policy framework implementation, community participation should reflect and provide a transparent bottom-up approach. This approach is intended to reach a meaningful end result of an evidence based policy formulation.
Thorough scrutiny identity’s all existing resources that are essential for the policy intervention, counter acting any counter-productivity encountered. Sanderson (2002) discusses the necessity of evidence based policy in the livelihood sphere, in terms of labour.
The approach is considered as a modernist rationalistic project due to its nature of production and contribution to today’s industry and delivery methods, transport system, communication, knowledge impartation, and social models. Government intervention and livelihood promotional strategies entail the formulation of relevant evidence-based policy, and Sanderson states:
41 Nonetheless, planners and the community should be considerate of the limitations that policy entails. More often, policy in research does not reflect what’s on the ground. There have been various critiques of the evidence-based approaches from different angles and mostly from a constructivist point of view. However, the majority of the stances outline only the complexities of the social world, rarely touching on human action guidance via various methods including evidence-based approaches (evidence-based policy) (Sanderson, 2002).
Huston (2008, page 1) adds to the assessment that policy differs in practice:
Policy and its implication are vital and play a significant role, and policy overlooking human actions within the livelihood approach creates much complexity in the approach and for the approach. This is due to the reality of people’s lives being complex although diagrams for spatial use or operational regulations may be institutionalised as neat and simply representative in context. Huston reveals that placing human action and development outside of the policy and institutional context creates enough complexities to cause the dysfunctioning of the contextual livelihood ideology. The necessity of including human actions within the perspective of policy implication also includes the need to identify livelihood assets and their vulnerability. This initiative embraces the need to measure human development index capabilities, focusing on various elements which include three elements deemed to be important: health, income and education.
42 SECTION TWO: CONCEPTUAL FRAMEWORK