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Sustainable Livelihoods and Legal Empowerment

This article was prepared to inform the work of the Commission on Legal Empowerment of the Poor. It provides many insights which are still valuable today and as such I republish this now as this blog.

The livelihoods of the poor are based on the activities, assets and entitlements available to them, which they can use to get themselves out of poverty. Activities include working for an employer (labor) or for oneself (entrepreneurship). Assets include human, social, natural, and physical and economic capital; the relationship between the owner and other persons relative to the asset as recognized by the state is referred to as property rights. Entitlements are used in this context to refer to the protection of freedoms and provision of public goods and services based on equitable access to justice and the rule of law. An agenda for legal empowerment of the poor can therefore be developed on the basis of labor rights, legal instruments for entrepreneurship, property rights and access to justice and rule of law. This is the basis of the work of the Commission on Legal Empowerment of the Poor.

The Commission sees itself as a subset of the Sustainable Livelihoods analytical framework. It takes as its starting point that “poverty is man made and a policy failure” and it recognizes that this failure is directly linked to the appropriation by powerful groups of the five assets (i.e. Natural Capital, Physical Capital, Financial Capital, Social Capital, Human Capital) in the Sustainable Livelihoods framework. As such, the Commission focuses on means to strengthen institutional mechanisms that provide economic opportunities for the poor and that protect their interests towards their endeavor to escape poverty. Thus, the Commission for the Legal Empowerment of the Poor reframes the global development agenda to realize sustainable and, overall as well as individual, economic development through equitable institutional reform.

The Legal Empowerment agenda therefore focuses on Social Capital formation and the role of the State as the arbiter in this process. This means that Legal Empowerment is concerned with the political processes as reflections of culture, which in turn influences how these processes reveal themselves in the legal system, in national policies, which guide both political and above all economic “competition”, and in public institutions, which guide and/or deliver services to the citizens reflecting agreed (user) rights and entitlements linked to the other four assets in the Sustainable Livelihood framework.

The Commission recognizes that at the core of empowerment is the poor having a voice and identity in their community to address their concerns and to successfully fight the institutional constraints that keep them in the vicious cycle of poverty. Accordingly, the Commission recognizes the indispensability of promoting and facilitating membership-based organization of the poor to integrate themselves in the policy-making and rule-setting institutions and to be in the position to demand legal reforms from above to correct the failures of markets, public policies, and legal institutions.

The Commission, thus, aims to promote the state’s efforts towards the institutional establishment of protection and opportunities in line with the needs of its people who are put in the position to make the state accountable for its actions. Therefore, legal empowerment demands not only specific substantive legal changes, but also a new focus on the processes by which laws are made, executed, and adjudicated. Legal empowerment requires more participatory and accountable forms of lawmaking and public administration, giving the poor greater voice in the process and ownership over the outcomes.

The Commission, thus, recommends that the state, representing the interest of the poor, promote reform in the legal and administrative institutional framework to ensure that the poor are entitled to take full advantage of all opportunities and resources. These legal reforms reinforce that universally recognized Rule of Law1 principles, and by default human rights principles deeply embedded in most legal institution framed post UDHR in 1948, be equitably applied by the state to all its nationals. Premised on such Rule of Law, institutional legal systems will equitably provide adequate protection and create overdue opportunities for the active participation of the poor as a manifestation of their citizenry legal empowerment. That is, the state should give all its constituents, including the poor, increased ownership in the restructuring of their legal and social environment in such a way that their productivity is progressively enhanced and the poor are enabled to make their life more decent.

In sum, on the input side, the emphasis of legal empowerment is on participatory and accountable forms of law making and public administration, giving the poor voice and increased ownership of the framing of their legal and social environment (input-legitimacy of the law). Regarding the means, legal empowerment of the poor stresses the critical importance of (1) granting legal identity and access to justice to all human persons, small business corporations, and civil society associations, (2) securing property rights of the poor as asset holders through comprehensive and context-based property rights systems, (3) protecting the poor as workers, and (4) creating an enabling business environment for small entrepreneurs and the self-employed. On the output side, a result oriented legal empowerment agenda stresses the effective protection of livelihoods of the

1On these principles Justice Kenned y writes: The Rule of Law requires fidelity to the following principles:

The Law is superior to, and thus binds, the government and all its officials.
The Law affirms and protects the equality of all persons. By way of example only, the law may not discriminate against persons by reason of race, color, religion, or gender.
The law must respect the dignity and preserve the human rights of all persons.
The Law must establish and respect the constitutional structures necessary to secure a free and decent society and to give all citizens a meaningful voice in formulating and enacting the rules that govern them.
The Law must devise and maintain systems to advise all persons of their rights and just expectations, and to empower them to seek redress for grievances and fulfillment of just expectations without fear of penalty or retaliation.

poor and, more originally, the measurable creation of new opportunities which enable the poor to make their life more decent and to escape the poverty trap using their own energy and talents (output-legitimacy of the law).

The Commission views the concept of “property rights” as encompassing both the right to protection against peremptory expropriation of property without compensation, and also the right to a reasonable opportunity to acquire property without unfair exclusion. An appropriately designed system of property rights — one that provides both protection and fair access — is crucial to empowering poor people to break out of the cycle of poverty. Secure property rights enable poor individuals to accumulate property and to invest in the resources they hold, increasing productivity and efficiency. Property rights allow people to pool their assets into transparent structures of co-ownership, creating greater economic and social leverage. Reliable and equitable property rights systems help settle competing property claims and contribute to a more sustainable resolution of conflicts and to the prevention of violence. Furthermore, the increased social stability and trust emanating from robust property rights systems creates appropriate environments for business and investment.

An equitable and efficient system of property rights, however, is not sufficient. Legal empowerment of the poor requires not only a system that provides protection and access to property, but also an environment in which the poor have the ability to accumulate resources through their own initiative. In other words, poor people must be able to leverage their existing economic assets — modest though these might be — into greater economic opportunities.

For many poor people, their labor (their human capital) is the primary or only existing asset. Yet hundreds of millions of poor people sell their labor in the informal economy, without meaningful legal regulation. Appropriate legal protection of labor – and laborers – is therefore critical to helping the poor work their way out of poverty. As with property rights, the Commission recognizes that a well-designed system of labor rights must provide both protection and opportunity. On the opportunity side, the Commission recognizes that excessive or inefficient labor regulation can drive more poor people into the informal economy, effectively depriving them of the opportunity to realize the benefits of the formal labor market. At the same time, the Commission recognizes the need for well-designed labor regulations that protect vulnerable workers from exploitation. Good labor regulations must provide workers with this sort of protection without diminishing their opportunities for lawful employment.

While millions of poor people are wage laborers, there are also millions of self-employed poor people who operate their own small business ventures. Many of these entrepreneurs operate in the informal economy, without substantial legal protections, because the legal system does not serve their interests. The Commission believes that appropriate reforms can make a set of legal tools and institutions accessible to these “extra-legal” or informal businesses, and that doing so will considerably enhance business opportunities for the poor by providing protection, lowering costs, and making credit, capital, and product markets more accessible and affordable. This, in turn, will lead to the creation of more and better jobs, more opportunities for would-be entrepreneurs, and more avenues of escape from the cycle of poverty.

These and other legal reforms are meant to provide poor people with the protections and opportunities that they need to realize the potential returns on their human and physical capital. The Commission recognizes, however, that reform of the “law on the books” is not, by itself, sufficient to change the “law in action” that poor people experience in their daily lives. Even the best pro-poor legal rules are not worth the paper on which they are printed if poor people lack access to a justice system that can make these rights a meaningful social reality. Yet poor people throughout the world face innumerable barriers to securing redress of their grievances through the legal system. If these barriers are not reduced or eliminated, no anti-poverty strategy that relies on legal empowerment can be successful. Therefore, the Commission recognizes the need to improve access to justice for the poor. Empowering poor people to lift themselves out of poverty is not achievable without policies and institutions that empower the poor to use the legal system effectively to secure their legal rights and interests.

 

The Commission emphasizes the indispensability of organized mobilization and action “from below” – by civil society organizations, and most crucially by organizations of the poor themselves, supported by the international community – to realize sustainable reform “from above” initiated and directed locally. In the absence of such an active participation of the poor, their exclusion will impact negatively not only their own livelihoods but compromise the sustainable development and human security conditions of the community they all belong to. Thus, the Commission aims to open institutional spectrums of political protection and economic opportunities with a bottom-up focus of making all citizens participating shareholders in their community according to the rule of law and accepted international human rights principles.

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