Definitions for TrueValueMetrics
Value Chain in Development
Value chain analysis shows where costs are incurred and value arising.
The normal situation for the past several decades has been that a big part of the money mobilized for relief and development gets disbursed within the donor economy rather than in the beneficiary economy. This is shown in the following graphic:
When valuadd is used as the main metric for progress, then the generalized situation is that for the same amount of economic activity measured in money, there will be much more valuadd in a poor society than in there is in a rich society.
If the objective is to have as much socio-economic progress as possible ... the maximum of valuadd ... then the following would be a more desirable approach. The following graphic shows the improvement in development performance that results from a development process where the bulk of the available financial resources are used in the beneficiary economy.