Market Systems In Intro Making Sense: sustainability, scale, - - PowerPoint PPT Presentation

Market Systems In Intro

Making Sense: sustainability, scale, facilitation, systemic change…?

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Common terms but uncommon meanings?

Sustainability Scale Facilitation Systemic (Institutions) Define Prioritise Actions Results

Direct Delivery Approach: 1) Empowerment - resources 2) Institutions - groups 3) Scale – donor funds 4) Sustainability - assets Systems Approach: 1) Institutions - analysis 2) Sustainability - functions 3) Empowerment - form 4) Scale – incentives

Dependency but Attribution? Leverage but Contribution?

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Example: information constraints (Uganda)

Outreach Time Project A Project B

2 projects

Project A: 1999--; US$2.5m/3 yrs;

• est. av. $0.5m/yr

Project B: 1999-2007; ~US$1.2m

Goal

Increase info for rural MSEs “Info is a long term strategic public good” Establish sustainable, effective info for rural MSEs via the mass media

Outreach

7m regular listeners Peak of 7-8m listeners

Sustainability

25 stations with independent MSE programmes; emerging new programmes & support services: no donor funding Initially 10 stations but dissemination cut as funding cut to $50k/yr. Other activities remain donor funded

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Rationale

Provide information to MSEs Make commercial media work better for MSEs in rural areas

Understanding

Symptoms: what info do the poor need? Root causes: understand structure, practices, incentives of system – why not pro-poor?

Sustainability

Explicit: commercial, based on

• wnership and incentives,

appropriate for local context Unclear: “A long term strategic public good”, but no assessment of govt capacity or incentives

Action

Facilitate and catalyse:

• develop understanding, networks

and credibility

• influence, demonstrate, link
• TA to stations and other players
• work through local players
• no finance to radio stations

Direct actions and finance:

• info collection
• analysis
• programme production
• purchase airtime
• coordinate

Example: What explains the difference?

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Sustainability

• 1. Meeting the needs of the present without

compromising the needs of future generations

• 2. The capability of a market system to continue to

adapt and provide the means by which poor women and men access social and economic benefits, beyond the period of intervention

• 3. There is no agreed definition of the concept and

perhaps there is no need for one

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RULES SUPPORTING FUNCTIONS Laws Informal rules & norms Standards Regulations CORE Community enterprises Local tourism industry Wider tourism industry Information Infrastructure Mediation Negotiation Finance Booking Marketing Maintenance & construction

Not thinking systemically?

Example: Community based tourism

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Function / rule Business training/advice Advocacy Finance Construction & maintenance Joint venture mediation Booking Marketing and branding Information Standards Market research Legal services Conflict arbitration Regional planning Advice to government Who does? Who pays NGO / PS Donor/PS internship NGO Donor / members NGO Donor Private sector (PS) Donor NGO / PS Donor NGO Donor NGO / PS Donor NGO Donor NGO Donor NGO / PS Donor PS Donor NGO Donor NGO/PS/Govt Donor / Govt NGO Donor

Not taking sustainability seriously!

Example: Community based tourism

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In order for markets to operate in a sustainable manner we need answers to four broad questions

1 What needs to be done? FUNCTIONS

Sustainable capability

2 Who are the main players? PLAYERS 3 Who does? 4 Who pays?

Capability: the central concept in sustainability

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Scale

• 1. To efficiently increase the socioeconomic impact

from a small to a large scale of coverage.

• 2. Change that benefits a significant number of poor

and low-income people, in relation to a given context.

• 3. Using successful small-scale projects as a basis for

effecting large-scale changes.

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Scaling Up: breadth and depth aspects

Market not working for the poor Market working better for the poor Period of temporary intervention

Attitudes Capacity & practices Relationships & alignment Incentives & ownership

Multi-faceted intervention actions to promote system change

Entry Exit Trial and pilot Crowding-in

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Example: crowding-in (breadth)

Business information via the commercial media, Uganda (SEMA)

Source: Anderson (2004)

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Example: crowding-in (depth)

Listener statistics

Listeners

Media consumption data $ Info on media habits $ $ Services Services Airtime $ $ Profile / publicity Quality info Listeners $ Improved programming

Media research companies Sponsors / advertisers Advertising agencies Radio broadcasters Specialist input providers Production companies Sources of information Communications advisers Government

Business information via the commercial media, Uganda (SEMA); Anderson (2004)

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Facilitation

• 1. An intervention approach that focuses on

addressing systemic constraints by incentivising and enabling market actors to perform their functions more effectively.

• 2. The act of making something easier.
• 3. A process in which a neutral person helps a group

work together more effectively.

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What are we facilitating?

Poverty reduction Pro-poor growth or improved access Market system change Intervention Conventional, direct responses miss this link...

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Facilitation: sustainability first…

Development intervention Temporary, catalytic

Part of the system External to the system

Intervention should bring about sustained change in market system... ... And avoid becoming part of the system... ... Developing the system – not distorting it! Market system change A change in the way supporting functions and rules perform that ultimately improves the poor’s terms of participation within the system, so that the system becomes more efficient and inclusive.

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Facilitation: from sustainability to scale…

Development intervention Temporary, catalytic

Part of the system External to the system

Crowding in: objective of facilitation

• Catalyse new or different alignment of

market players and functions, improve a system’s performance

• Breadth: outreach, inclusion
• Depth: supporting functions, rules

Leverage: principle of intervention

• Use scarce resources for maximum effect
• Targeted programme inputs to stimulate

market players to react more substantially (ownership, investment etc)...

• ... and continue to act without programme

support

Leveraging a change process which results in crowding in

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It isn’t “what” you do…

Inform Educate Convene Link Mediate Train Mentor Demonstrate Finance Persuade Analyse

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Focus of support? Prevailing norms? Pilot-review-adjust Use leverage as a gauge of appropriateness and commitment Powerful, distorting effects Start ‘softer’ first Breadth and depth don’t just happen automatically Is leverage, crowding in being stimulated?

It’s the “way” that you do it…!

Measurement Transactional Shaped by diagnosis Cautious about direct finance Active promotion of crowding in

!

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Systemic Change

• 1. Change in the underlying causes of market system

performance – typically in the rules and supporting functions – that can bring about more effective, sustainable and inclusive functioning of the market system

• 2. The process of transforming a system from one

paradigm to another through the application of systems theory and systems thinking

• 3. Shifts in patterns (similarities and differences) of

system relationships, boundaries, focus, timing, events and behaviours over time and space

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ADOPT ADAPT EXPAND RESPOND

Piloting phase Crowding-in phase Non-competing players adjust their

• wn practices in

reaction to the presence of the pro- poor change (supporting functions and rules) Initial partner(s) has ‘invested’ in the pro-poor change adopted independently of programme support Partner(s) takes up a pro-poor change that is viable and has concrete plans to continue it in the future Similar or competing players copy the pro- poor change or add diversity by offering variants of it

Systemic Change Framework

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ADOPT ADAPT EXPAND RESPOND

Piloting phase Crowding-in phase

Example: assessing systemic change

Business information via the commercial media, Uganda (SEMA); Anderson (2004)

CBS Take up by other stations Sources Services Coordination Regulation Research Advertising Knowledge

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ADOPT ADAPT EXPAND RESPOND

Objective: Promote pro- poor business innovation

Innovation support

Adaptation...?

? ?

"...In the vast majority

• f cases that we
• bserved, the range

and difficulty of ... scaling barriers is such that firms are unlikely to resolve them on their own". Beyond the

Pioneer: Getting Inclusive Industries to Scale; Deloitte/Monitor Group (2014)

Systemic problems = systemic solutions

“The Agriculture Challenge Fund... [Tanzania]... works with individual companies. Whilst this is good for those companies, we could not see that the available funding will have an impact on the wider problems in Tanzania of finance for medium-sized businesses.” DFID’s

Private Sector Development Work, ICAI Report (2014)

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The explicit objective of more effective and more inclusive market systems and of the facilitating role of development agencies A lens through which we view the world to help us identify and diagnose constraints and opportunities for market system development A set of principles and practices that guide intervention design and implementation consistent with objectives and understanding Rationale and

• bjective

Framework for analysis Guidance for action

The essence of market systems development

Market Systems Appli lied

Access to low cost private schools in Nigeria

Market Systems Appli lied

Access to information for farmers in Bangladesh

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Example: facilitating change

Access to information for farmers

Katalyst, Bangladesh (SDC, DFID, Sida, CIDA, Netherlands)

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Context: opportunities & constraints

• Important: 3.7% GDP; 10m farmers;

34% labour force

• Growing: 5-6% faster than

agricultural sector

• Relevant: poor as farmers and

consumers

• Per capita consumption of 60g/day

(required 200g/day)

• Low productivity: annual

production 1.5m tonnes; demand 10m tonnes; area under cultivation 1.8%; low yield of 1 tonne/ha; low rate of increase

• 1.6m farmers: 60% in

commercial production; additional 50,000 in the value chain

• Major crops: tomato, pointed

gourd, bitter gourd, cauliflower and cabbage

• Production of 67,000

tonnes/year

Vegetable sector (national) Vegetable sector (Rangpur)

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Innovation: better info in supply chain

Where do farmers get productivity-related information?

Other farmer Retailer Govt extension NGO Other Input suppliers (n=20) Distribution network Input retailers (n = 4,000) Farmers (n = 1.6m) Traders Retailers Consumers Govt extension NGOs Media

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ADOPT ADAPT EXPAND RESPOND

Piloting phase Crowding-in phase Non-competing players adjust their

• wn practices in

reaction to the presence of the pro- poor change (supporting functions and rules) Initial partner(s) has ‘invested’ in the pro-poor change adopted independently of programme support Partner(s) takes up a pro-poor change that is viable and has concrete plans to continue it in the future Similar or competing players copy the pro- poor change or add diversity by offering variants of it

Systemic Change Framework

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Adopt: introduction and testing of innovation

ADOPT

Research & technical assistance Cost share new retailer training approach Pilot for 480 retailers (approx 100,000 farmers) Positive results (sales, repeat business, relations with farmer, practices/productivity)

Partner (multi-national input supplier)

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Adapt: independent ownership of innovation

ADAPT

Monitoring Firm establishes new training centre National roll out Trains a further 13,000 retailers – without any project support (2m+ farmers)

Partner (multi-national input supplier)

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Expand: innovation spreads

EXPAND

Revised support for new adopters Monitoring + information dissemination 15 other large players adopt variant of approach 7 sectors, 7 regions 4,000 retailers + variety of other ‘last kilometre’ service providers (1m+ farmers)

System (other input suppliers + other players)

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Scale and sustainability

16 medium-large firms + 1 association

3 pesticide 7 seed 2 fertiliser 3 medicine (fish) 1 compost

4,000 retailers 60 traders 55 mobile seed vendors 210 govt ext agents 152 sprayers 96 opinion shapers 3,000 lead farmers

Vegetables Maize Floriculture Seed Poultry Pond fish Prawn

Approx 1m farmers; 7 regions (4 years)

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Respond: innovation develops into a ‘norm’

RESPOND

Established corporate practice Incorporated in universities / business schools etc New practice recognised / interacted with by

• ther important players in system

(eg government extension; media + ICT) Part of emerging ‘last kilometre’ public-private service partnerships

System (other supporting players)

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Innovation: better info in supply chain

Where do farmers get productivity-related information?

Other farmer Retailer Govt extension NGO Other Input suppliers (n=20) Distribution network Input retailers (n = 4,000) Farmers (n = 1.6m) Traders Retailers Consumers Govt extension NGOs Media

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Innovation: enhancing government’s role

NGOs Media District BMO Farmer groups Farmer groups Farmer groups Govt extension

Private-public action group (led by BMO)

Input suppliers (n=20) Distribution network Input retailers (n = 4,000) Farmers (n = 1.6m) Traders Retailers Consumers

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Further reading…

CONCLUDING THOUGHTS…

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Ambition: sustainability, scale and impact

More agencies adopting approach Deepening in ‘economic’ fields Expanding into new fields Increasing experience and learning Measured in relation to Sustainability Scale Impact Ambition?

Potential for large-scale and lasting change

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Market systems approach

1997 2004 2006 2001 2000

The development world’s different ‘boxes’ of expertise...

Evolution of market systems approach

“Scaling sustainable results is… best achieved through the development of market systems” Downing; USAID Experience Results Skills Practice

Review of donor experience – BDS market development ‘Making markets work for the poor’ paper Donor BDS guidelines ‘MMW’ – making markets work for the poor ‘M4P’ Guidance documentation on M4P

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It’s doable: achieving results in different contexts

Enable (Nigeria)

Additional income: GBP131m for 2m MSMEs GBP11.63 generated for every GBP1 spent

PrOpCom (Nigeria)

Additional income and investment: GBP41m for 1.26m farmers; GBP20m+ additional investment stimulated “For over five years until 2008 PrOpCom achieved rather little of scale and substance. DFID came close to closing it… It was only once PrOpCom started to adopt a rigorous M4P methodology that its effectiveness started to increase…”

Independent Project Completion Review: Duncan, A et al (2011); The Policy Practice / DFID

CAVAC (Cambodia)

Additional income: AUD40m annually, benefitting 230.000 farmers (by 2016)

FIT-SEMA (Uganda)

Better service: 7m rural listeners reached by enterprise-focused radio programmes

Katalyst (Bangladesh)

Additional income: USD204m for 1.74m beneficiaries

FSD Kenya

Access to financial services: 2009: 41.3% 2013: 66.7%

FinMark (S Africa)

Access to financial services: 2002: 39% 2013: 79%

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Growing diversity and momentum

Coordination

Sectors

Established

• Value chains
• Financial services
• Business environment reform

Emerging

• WASH
• Infrastructure
• Health
• Education

Organisations

Established

• DFID
• SDC
• DFAT
• Sida

Emerging

• NGOs
• Foundations
• Impact investors