Synthesis Documents

Value Chains, Donor Interventions and Poverty Reduction: A Review of Donor Practice, John Humphrey and Lizbeth Navas-Alemán, 2010

    Based on the reflections of value chain development practitioners and extensive desk research, John Humphrey and Lizbeth Navas-Alemán review the causal models underlying value chain interventions and ask how and to what extent their poverty alleviation impacts have been systematically investigated.

    Concentrating on a selection of 30 donor-led value chain interventions, the review finds two main patterns of engagement: (a) one which funnels assistance by partnering with lead firms in the value chain – lead firm projects; and (b) one which works with chains without a lead firm – value chain linkage projects. Targeting of the poor seems more effective in value chain linkage projects and in those lead firm projects where beneficiaries are identified in both the chain’s suppliers and distributors.

    Despite a wealth of positive anecdotal evidence, the vast majority of projects under review did not carry out an impact assessment of their poverty alleviation objectives. It is therefore unclear whether the value chain intervention: (a) is responsible for the improvements observed; (b) benefits the poor disproportionately; and (c) is more cost effective than other alternative approaches. The review thus highlights a need to carry out systematic impact assessment to develop a strong evidence base. Given the cost and time horizon of large-scale, one-time impact assessments, the authors recommend that impact assessment be seen as an ongoing programme activity, aimed at improving a whole class of value chain interventions, rather than verifying the impacts of particular projects.

    Finally, this review proposes some guidelines for designing and managing value chain interventions, particularly regarding the identification of situations in which the value chain approach is most appropriate and those where other private sector-oriented approaches may be more suitable or complementary.

    Associated Activities and Documents
    Impact Assessment
    »DCED Results Measurement Initiative, 2011 (English/French/Spanish)