PRESENTATION ABSTRACT: "Making Value Chains Work for the Poor," by Ruth Campbell

The value chain approach is a systems-based approach to economic development and poverty reduction that emphasizes the importance of analyzing incentives and stimulating behavior change through a facilitative process in order to strengthen the competitiveness of industries or value chains. This behavior change affects inter-firm relationships, the value placed on learning and innovation, and the distribution of benefits. While the direct targets of value chain interventions are generally not the very poor, increasingly competitive value chains have the potential to impact the poor by creating sustainable employment at multiple levels, incorporating small-scale producers, promoting positive economic behavior, and building demand for basic public and private services. Donor-funded projects that provide assets and services directly to communities have a tendency to drive away the private sector, limiting the formation of relationships that are essential for sustainable, competitive industries. Conversely, donor-funded projects that support access to services for the very poor, and simultaneously foster growth and upgrading among the more entrepreneurial poor and emerging commercial actors, enable the establishment of relationships with the private sector that can establish a path for the poor to emerge from poverty.