Catalyzing Market Systems Development by Strengthening the Enabling Environment
The recent Market Systems Global Learning and Evidence Exchange (GLEE) events held earlier this year in Thailand and Senegal and many of the posts over the past few weeks here on Agrilinks have articulated why a systems approach to agricultural market development is critical for the Global Food Security Strategy (GFSS). Enabling environment reforms are central to the expanded focus from farm-level strategies to comprehensive systems strengthening. By "enabling environment," we mean both the formal rules (policies, laws, regulations and standards) and informal rules (societal norms and traditions) that drive behavior and decisions within the system. Policies, laws and regulations impact the costs and risks borne by agricultural market actors every day, influencing investment incentives and business operations. This series will explore practical examples of enabling environment constraints and approaches to encourage local reforms that promote food security.
This first post, drawing on the Enabling Environment in Market Systems Technical Note and learning from the 2016 Review of Feed the Future Investments in Enabling Environment Reform Study, highlights several successful approaches that USAID and implementing partners have deployed to facilitate enabling environment reform efforts around the world. These approaches, outlined below, strengthen local institutions and stakeholders, enabling them to embrace, engage in and lead necessary reforms.
- Strengthen the capacity of the private sector to advocate effectively with government for their needs: Technical assistance and other capacity strengthening aimed at private sector advocacy, such as USAID’s support in strengthening the Tanzania Horticultural Association (TAHA), can organize and strengthen the voice of the private sector in regulatory reforms and policy change processes.
- Integrated reform efforts through value chain projects: This method offers the benefit of applying a holistic approach to addressing market system constraints, including at the input, production, market, financial service and policy levels. The long-term nature of enabling environment reform efforts can lead projects to de-prioritize reform efforts in favor of more rapid and easily quantifiable outputs, such as production yields.
- Regional harmonization initiatives: Where regional missions seek regulatory cooperation to facilitate enhanced cross-border flows of goods and services, a focus on harmonization can be important. USAID has implemented this approach in several regional economic communities including ASEAN. A challenge to the regional approach is aligning legislative agendas across countries with varied national-level priorities and addressing institutional capacity to implement regional arrangements in addition to domestic agendas.
- Multi-donor initiatives: USAID has invested in multi-donor initiatives to leverage resources and generate broad-based buy-in from additional development partners. In these cases, the support for reform initiatives is implemented by another donor or independent organization. An example of this includes the World Bank’s Enabling the Business of Agriculture Index.
- Public-private partnerships: By mobilizing resources from governments, private sector, civil society and donors there can be a strong impact on enabling environment reform. For instance, the New Alliance for Food Security and Nutrition brought together a range of public and private partners to support African governments to achieve their policy commitments aligned with their National Agriculture and Food Security Investment Plans, contributing to more than 200 policy reforms across 10 countries.
- Embedded technical advisory services: Here, USAID and implementing partners provide government ministries, regional institutions or private advocacy groups with short- or long-term technical experts to provide hands-on support to the reform process. This may include reviewing existing laws, regulations or standards; supporting the drafting of new laws and regulations; and providing operational support to move forward recommendations identified during analysis, such as organizing consultative forums or facilitating engagement processes around new initiatives.
- Institutional capacity building: In addition to embedding technical support, USAID and implementing partners can deliver targeted support to public sector institutions or private sector advocacy groups. Such support may include training courses, study tours or operational upgrades necessary for carrying out evidence-based reform.
- Sector program assistance: Using this method, resources for enabling environment reform are directed through the host country government rather than through the private sector, civil society or implementing partners. This model was employed by USAID/Rwanda and relies on strong, stable government institutions.
Selecting an approach, or set of approaches, to address enabling environment issues requires taking in a wide set of information and perspectives in each local context. The next post in this series will look at available benchmarking data that can play a role in prioritizing and engaging in enabling environment reform efforts.
 Feed the Future Enabling Environment for Food Security Project, Review of Feed the Future Investments in Enabling Environment Reform, 2016 (on Agrilinks).