Growing the Rural Nonfarm Economy to Alleviate Poverty

292 Pages·2017·2.54 MB·English

Growing the Rural Nonfarm Economy
to Alleviate Poverty
An Evaluation of the Contribution of the World Bank Group
AN INDEPENDENT EVALUATION
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Growing the Rural Nonfarm Economy to
Alleviate Poverty
An Evaluation of the Contribution of the World Bank Group

An Independent Evaluation

Contents
ABBREVIATIONS ................................................................................................................................. VI 
ACKNOWLEDGMENTS ....................................................................................................................... VII 
OVERVIEW ............................................................................................................................................ IX 
MANAGEMENT RESPONSE ............................................................................................................ XVII 
World Bank Management Response .................................................................................................................... xviii 
IFC Management Response .................................................................................................................................. xxii 
MANAGEMENT ACTION RECORD ................................................................................................ XXVII 
1.  INTRODUCTION AND BACKGROUND .................................................................................... 1 
Definitions ................................................................................................................................................................. 1 
Analytical Underpinnings ........................................................................................................................................... 2 
Evaluation Rationale ................................................................................................................................................. 3 
Strategies and Analyses of the World Bank Group Related to the RNFE ................................................................. 3 
The Rural Nonfarm Income-Generating Portfolio ...................................................................................................... 7 
The Evaluation Lens: Key World Bank Group RNFE Approaches across the Three Worlds ................................. 10 
References .............................................................................................................................................................. 12 
2.  POVERTY-TARGETED APPROACHES TO GENERATING INCOME AND EMPLOYMENT 15 
Community-Driven Development Projects with an Income-Generating Focus ....................................................... 16 
Rural Livelihoods ..................................................................................................................................................... 18 
Social Protection Productive Inclusion Approaches ................................................................................................ 20 
What Works: Lessons from IEG’s ICRRs and PPARs ............................................................................................ 22 
References .............................................................................................................................................................. 23 
3.  GROWTH-ORIENTED APPROACHES IN THE RURAL NONFARM ECONOMY .................. 25 
World Bank Crop Value Chain Approaches ............................................................................................................ 27 
IFC’s Agriculture Value Chain Activities .................................................................................................................. 32 
Rural Tourism Value Chains ................................................................................................................................... 38 
Agglomeration Approaches within the Trade and Competitiveness GP ................................................................. 39 
Synthesis Findings on the World Bank Group’s Poverty- and Growth-Oriented Approaches in the RNFE ............ 40 
References .............................................................................................................................................................. 40 
4.  COUNTRY STRATEGY, ANALYTICS, AND ENABLERS ...................................................... 42 
Country Strategies and Rural Dynamics ................................................................................................................. 42 
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CONTENTS
The Rural Nonfarm Enabling Environment ............................................................................................................. 48 
References .............................................................................................................................................................. 56 
5.  CONCLUSIONS AND RECOMMENDATIONS ........................................................................ 60 
Recommendations .................................................................................................................................................. 62 
Reference ................................................................................................................................................................ 63 
BIBLIOGRAPHY ................................................................................................................................... 65 

Boxes
Box 1.1. Partnering to Develop the Rural Economy to Reduce Poverty: The Role of IFAD .................... 7 
Box 2.1. RNFE-Related Measurement Challenges in Productive Community-Based Approaches ........17 
Box 2.2. The Challenge of Layering Productive Expectations on Successful Safety Net Systems ........21 
Box 3.1. Rwanda: A Rapidly Modernizing Agriculture Sector May Be Leading to Increased Inequality in
the Farm and Nonfarm Economies ........................................................................................................28 
Box 3.2. Global Partnerships Have Helped Extend IFC’s Value Chain Support to Frontier Areas .........32 
Box 3.3. IFC Agri-Food Investments and Their Links to the Rural Nonfarm Economy ..........................34 
Box 3.4. Tapping Touristic Opportunities to Support Youth Employment in Morocco ............................39 
Box 4.1. A Patient and Multifaceted Approach to Expanding Rural Finance in Tajikistan ......................55 

Figures
Figure 1.1. Three Worlds of Agriculture from the 2008 WDR ................................................................. 5 
Figure 1.2. RNFE Poverty-Focused versus Growth-Oriented Approaches by Approval Year and
Commitment Level .................................................................................................................................10 
Figure 1.3. Key RNFE World Bank Group Approaches Oriented by Proportion of Agrarian Activity
(2004–14) ..............................................................................................................................................11 
Figure 1.4. Logical Framework of the RNFE Storyline ...........................................................................12 
Figure 2.1. Poverty-Oriented RNFE Portfolio Is Mostly in Agrarian and Transition Areas .....................16 
Figure 3.1. World Bank Group Growth RNFE Portfolio Is Mostly in Transitioning and Urbanized
Economies .............................................................................................................................................27 

Tables
Table 1.1. World Bank Approaches in the RNFE .................................................................................... 9 
Table 1.2. IFC Approaches in the RNFE ................................................................................................ 9 

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CONTENTS
Appendixes
APPENDIX A. IFC AND WORLD BANK PROJECT LIST ................................................................... 75 
APPENDIX B. COMMUNITY-BASED APPROACHES WITH PRODUCTIVE RNFE COMPONENTS . 76 
APPENDIX C. CROP VALUE CHAINS .............................................................................................. 100 
APPENDIX D. LIVESTOCK AND PASTORAL .................................................................................. 141 
APPENDIX E. PRODUCTIVE PARTNERSHIPS ................................................................................ 148 
APPENDIX F. RURAL LIVELIHOODS ............................................................................................... 151 
APPENDIX G. IFC VALUE CHAIN ..................................................................................................... 155 
APPENDIX H. METHODOLOGY ........................................................................................................ 208 
APPENDIX I. ANALYTICAL AND ADVISORY ASSISTANCE AND ECONOMIC AND SECTOR
WORK RELATED TO THE RNFE ......................................................................................... 218 
APPENDIX J. RNFE ANALYSIS IN STRATEGIC COUNTRY DIAGNOSTICS ................................. 219 
APPENDIX K. LIST OF PERSONS CONSULTED ............................................................................. 235 

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Abbreviations
DEC Development Economics Group
GAFSP Global Agriculture and Food Security Program
GP global practice
GWFP Global Warehouse Finance Program
ICA investment climate assessments
IEG Independent Evaluation Group
IFAD International Fund for Agricultural Development
IFC International Finance Corporation
MSMEs micro, small, and medium enterprises
PPAR Project Performance Assessment Report
RICA rural investment climate assessments
RNFE rural nonfarm economy
SBA Sustainable Business Advisory
SMEs small and medium enterprises
SURR Social, Urban, Rural, and Resilience
WDR World Development Report

All dollar amounts are U.S. dollars unless otherwise indicated.
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Acknowledgments
This report was prepared by an Independent Evaluation Group (IEG) team led by
Lauren Kelly and Andrew Stone. The evaluation was conducted under the guidance
and supervision of Midori Makino and Stoyan Tenev and under the overall
direction of Caroline Heider. Marie Gaarder was the manager during the approach
paper stage.
Members of the evaluation team included Jacqueline Andrieu, Amitava Banerjee,
Francesco Cuomo, Alexandra Christina Horst, Hassan Kaleem, Sama Khan, Pradeep
Mitra, Christopher Nelson, Jack W. van Holst Pellekaan, Detlev Puetz, John
Redwood III, Arianna Ranuschio, Mari Noel Lantin Roquiz, Nathan Rosenblatt,
Sonia Sardar, Pallavi Sengupta, Inder Sud, Marcelo Selowsky, Kathryn Steingraber,
Kendra White, and Jingwen Zheng. The evaluation team was also supported by
several experts who provided cross-cutting guidance, including Elena Bardasi on
gender, Rasmus Heltberg and Anahit Aghumian on partnerships, and Raghavan
Narayanan on public-private partnerships. Vibhuti Khanna and Emelda Cudilla
provided administrative support. Cheryl Toksoz led the editorial team, and Amanda
O’Brien edited the report. Francis Gagnon provided inputs on graphic design.
The evaluation included extensive fieldwork, which was supported by international
and national consultants in the case study countries, including Mauricio Carrizosa
(Brazil); Abhinav Gupta (Bangladesh); Xavier Justino Muianga and Gaurav Relhan
(Mozambique); Mohammed Musa (Ethiopia); and Camilo Pacheco and Kay Stubbs
(Nicaragua).
Peter Lanjouw, former Research Manager, Poverty and Inequality, Development
Research Group at the World Bank; Nora Dudwick, former Senior Social Scientist at
the World Bank; and Steve Haggblade, professor of international development in the
Department of Agricultural, Food and Resource Economics at Michigan State
University, were the peer reviewers.
IEG is grateful to the numerous representatives of country governments, private
sector entities, international and bilateral development organizations, academia, and
to the more than 1,200 project-affected persons that shared their views as part of the
evaluation.
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