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< prev - next > Social and economic development Economic Development KnO 100374_Income and Employment from Services (Printable PDF)
Income and employment from services
Practical Action
establishing somewhat spurious cause and effect linkages.
3. Broader impacts and benefits
The enhanced local environment arising from the improved infrastructure services can make the
affected area attractive for those looking to invest in the local economy in the form of small
businesses or enterprises. Newly established shops, food stalls and small-scale industries can
provide employment opportunities for the local population. A cleaner area is better linked with the
wider town or city economy. Other consequences of the improved environment may be increased
property values which can have a positive impact for home owners, yet a negative impact for
tenants if rental rates also increase.
Direct income benefits for the poor at each phase of service
Service provision can be broken down into different phases, from construction to operation,
maintenance and management. Direct income and employment benefits may be realised at the
different phases through some of the approaches described below.
Construction phase
Community contracting in this approach the urban poor are contracted either by local
government or NGOs to carry out infrastructure construction. In this way, the financial benefits of
the contract go the community, rather than to an external contractor or agency. The approach
promotes skills development in addition to income generation, and community members may be
hired for a range of activities including designing and costing as well as the construction itself
(World Bank Group, n.d.). Cotton et al. (1998) deal with the subject in detail, providing
guidelines for community contracting under a variety of stakeholder arrangements, funding
scenarios and for different community roles and involvement. Participation need not be limited to
residents from the slum areas receiving the infrastructure - necessary skilled and un-skilled labour
may also be procured by looking beyond the physical slum to the wider urban poor. Existing
skilled labour might include latrine pit diggers, masons, and day labourers connected to sanitary
marts or shops selling plumbing parts.
Cotton et al. (1998) state that contracts should:
Be low risk and low hazard
Be straightforward, both technically and managerially
Not require highly skilled personnel
Be labour intensive (see labour-based technology, below).
They outline the following benefits of this approach:
A strong incentive for community members to see that work is carried out well
Dual benefit of the infrastructure itself as well as creation of employment in the
Development of small enterprises in the community
The local economy is supported by the increased business for building materials
Participation process empowers and offers greater control to community groups and
Local knowledge is available about existing services and there is less potential for
disputes with residents when working on site
Labour-based technology (LBT) this is one of the approaches promoted by the Employment
Intensive Investment Programme (EIIP) of the International Labour Organisation (ILO) for the
construction of basic infrastructure. In contrast with common equipment-intensive approaches,
LBT gives priority to labour, supplementing it with appropriate equipment only as required for
reasons of quality or cost. Some authors question the final construction quality with LBT, so well-
managed sites are essential to ensure specified standards are met (ILO, 2003: 20). More details
are available at EIIP (2005).
Comparative studies looking at LBT and equipment intensive approaches found that, for the same
final quality of infrastructure, labour-based options were 10 - 30% cheaper, had foreign exchange