The Determinants of Rural Livelihood Diversification in Developing Countries

2008 ◽  
Vol 51 (2) ◽  
pp. 289-302 ◽  
Author(s):  
Frank Ellis
2021 ◽  
Author(s):  
Ralitza Dimova ◽  
Sandra Kristine Halvorsen ◽  
Milla Nyyssölä ◽  
Kunal Sen

What drives livelihood diversification among predominantly rural households in developing countries and how can welfare-enhancing patterns be established and sustained in the long run? A large literature has focused on whether income diversification is a means of survival or a means of accumulation, but it remains inconclusive. We first examine the pattern of income diversification for a panel of households in Tanzania from the 1990s—the Kagera Health and Development Survey—with a focus on whether it is primarily driven by survivalist or accumulation motives. We then verify whether this pattern is sustained in the long run using the 2004 wave of the survey while also studying the role that infrastructural improvements and entry into new income generation activities play in the process. Our results support the accumulation hypothesis: richer households engage in more income diversification than poorer households. We also find that the greater diversification of better-off households that was observed in the 1990s persists in 2004. At the same time, households that were originally poorer are found to experience higher incomes by diversifying into off-farm self-employment activities. Factors that explain these improvements include access to a daily market and public transport.


2020 ◽  
Vol 51 (3) ◽  
pp. 435-456
Author(s):  
Minh Chau Lam

Building on ethnographic fieldwork in a northern Vietnamese village, this article explores how rural households have negotiated the opportunities and uncertainties of marketisation (Đổi Mới). I focus on the surprising ways local households have handled the state's push to diversify livelihoods and adopt commercial home-based sidelines: by means of being đa gi năng, a local term that means ‘keeping many livelihood options and never putting all eggs in one basket’. In pursuit of đa gi năng, local households have actively adopted home-based production even when they were doing well with paddy farming and faced no subsistence crisis. However, they have evaded what state officials want most: specialising in a single home-production enterprise in rational maximising ways to accumulate transformational wealth. The idea of đa gi năng calls into question two contrasting universal approaches to rural households’ motivations for livelihood diversification: either a desperate search for survival by passive victims of market forces, or a quest for wealth accumulation by rational maximisers without careful judgement of potential risks to one's family.


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