The United Nations Development Programme (UNDP) has developed a methodology (or approach) for the design, implementation and evaluation of Sustainable Livelihood programmes at the country level. The approach consists of a five step process described briefly below:
  • A participatory assessment of the risks, assets, entitlements and indigenous knowledge base found in a particular community. These are usually manifested in the coping and adaptive strategies pursued by men and women. Coping strategies are often a short-term response to a specific shock such as drought. On the other hand, adaptive strategies entail a long-term change in behavior patterns as a result of a shock or stress. Both have implications on the composition of the assets (i.e., depletion, regeneration) from which they are derived;
  • Analysis of the macro, micro and sectoral policies, and governance arrangements whichimpinge on people's livelihood strategies.
  • Assessment and determination of the potential contributions of modern science and technology that complement indigenous knowledge systems in order to improve livelihoods;
  • Identification of social and economic investment mechanisms (i.e., microfinance, expenditures on health and education) that help or hinder existing livelihood strategies; and
  • Making sure that the first four stages are integrated and interactive in real time.

The SL approach, by using both participatory and policy (cross-sectoral) tools, highlights the inter-linkages between livelihood systems at the micro level and the macro policies which affect these livelihoods.

The SL approach integrates environmental, social and economic issues into a holistic framework for analysis and programming from the beginning. This is especially true in identifying not only the types of assets which people use, but also how existing livelihoods can be strengthened with new and appropriate technologies and corresponding social and economic investments. This results in sustainability being brought into the fold and viewed simultaneously through environmental and socioeconomic lenses.

Programme development begins not with community needs assessment but with community strengths and assets assessment. This is important in building self-esteem and self-reliance and to break the donor-recipient syndrome. Assets should include human, social, natural and physical capital. Sustainable livelihoods analysis require an understanding of the trade off that occur as we invest in or transform one type of capital into another, or into flows (income).

*Sustainability is defined in a broad manner and implies:
  • The ability to cope with and recover from shocks and stresses;
  • Economic efficiency, or the use of minimal inputs to generate a given amount of outputs;
  • Ecological integrity, ensuring that livelihood activities do not irreversibly degrade natural resources within a given ecosystem; and
  • Social equity which suggests that promotion of livelihood opportunities for one group should not foreclose options for other groups, either now or in the future.

The Methodology for using the "approach" to help promote sustainable livelihoods outcomes can be described in four simple steps which are not necessarily implemented sequentially. Some or all of the steps can be implemented in parallel or phased to varying extent depending on resource availability and local circumstances. Step I: Identify the assets, entitlements, activities and knowledge bases which people currently use to make their living. (The PAPISL Manual has been used in the case of Malawi SL Programme). Step II: A cross sectoral, macro-micro linked policy analysis is carried out to identify which policies or policy combinations disrupt local adaptive strategies or livelihood systems which are sustainable and which policies reinforce these strategies and systems. Step III is an assessment of the key technologies contributing to the livelihood systems and determination of what technologies will help to improve the productivity of the assets and the livelihood systems in a sustainable way. Step IV identifies existing local finance (micro-credit and savings) facilities and traditional practices and identifies opportunities for putting such facilities to the service of local people. Step V ensures close interaction and feedback among steps I to IV. This can be done for example, by an interactive matrix, which includes elements of local adaptive strategies, policy, governance, technology and investment, or by a dynamic systems approach. The level of complexity employed is determined locally by matching needs with capabilities but a real time reflexive approach rather than a state transition approach is used as far as possible.

Execution of the steps outlined above results in a holistic package of recommendations for use by decision makers in policy, technology and investment to promote sustainable livelihoods. These decision makers are likely to be at the international, the national and the local levels. Step I also results in better community appreciation of the possibilities for improving their livelihoods and creates the demand for implementation of the recommendations. Cross-sectoral and trans-disciplinary requirements become clear and will usually demand that practitioners in policy, technology, investment and in the sectors work together and at different levels. But more than that, how and why they should work together also becomes clearer.