Inclusive Market Systems Development: Learning from European Good Practices
By Aviva Kutnick & K. Bailey Morton, USAID; Matthias Herr & Maja Rueegg, Helvetas; Christian Steiner & Gisela Keller, Helvetas USA
A USAID Co-Learning Initiative in Market Systems Development
As an approach, Market Systems Development (MSD) can be hugely impactful. It can also be immensely complex and, at times, downright messy. It is critical for donor agencies and implementing partners to learn from one another so that all stakeholders can maximize their efforts and create lasting impact.
With this goal in mind, USAID’s Bureau for Food Security invited Helvetas, a Swiss-based international development NGO and a strong partner of the Swiss Agency for Development and Cooperation (SDC), to facilitate an MSD workshop in March 2018. Attendees included staff from USAID, the United States Department of Agriculture’s Foreign Agricultural Service and several implementing partners.
Three key takeaways from the workshop:
- The guiding principles of Market Systems Development are similar in the United States and in Europe.
- It is critical for donors and implementing partners to be collaborative, adaptive and flexible in their MSD approach.
- Though our guiding principles are similar, our tools can be different. Sharing diverse mechanisms helps to keep our thinking fresh and cutting-edge.
Adopt-Adapt-Expand-Respond Framework: A Case Study
The Adopt-Adapt-Expand-Respond Framework, a tool used routinely by both SDC and Helvetas, was developed by the Springfield Centre to better manage and measure systemic change processes. For a deep dive into the theory, we recommend page 27 of SDC’s Operational Guide for the Making Markets Work for the Poor Approach and a 2014 Springfield Centre Briefing Paper.
During the workshop, a case study was presented to illustrate the practical applications of this framework:
The SDC-funded Samriddhi project, implemented by Helvetas in Bangladesh between 2010 and 2015, fostered accessible, affordable and holistic rural advisory services for producers and small and medium-sized enterprises (SMEs) in several agricultural value chains. Read this blog for more information on Samriddhi.
At the center of the Rural Advisory Services system promoted by Samriddhi are Local Service Providers (LSPs), extension service providers who work closely with producers. They work as key agents between micro- and small enterprises (MSEs), financial service providers, input suppliers, processors and traders. As a result, producers are able to access needed information, inputs and services. LSPs are organized via Service Providers’ Associations (SPA).
In this project, Helvetas applied the Adopt-Adapt-Expand-Respond Framework to the LSP-SPA model in the medicinal plants sector, an income source with tremendous potential particularly for poor women.
- Adopt: In this step, Samriddhi helps Local Service Providers collaborate with one buyer, a pharmaceutical company called ACME. Through the Service Provider Associations, ACME trains LSPs in plant production, collection, storage and quality assurance. At the same time, Samriddhi helps producers and small enterprises with demand formulation.
- Adapt: LSPs train and advise medicinal plant producers and small enterprises regularly, a service financed primarily by ACME but also by producers, who pay for things like formal trainings. As producers learn about different species of medicinal plants, they are able to increase production, sales and productivity.
- Expand: The SPAs then engage with additional private companies, such as the pharmaceutical company SQUARE. As a result, more LSPs are trained and more producers get involved. To support this process, Samriddhi shares information about the service delivery model and helps newly-formed SPAs get off the ground.
- Respond: Finally, Samriddhi advocates for national government and donor agencies to adopt the concept of accessible, affordable and holistic rural advisory services. Additional initiatives to support this system then emerge.
- One lesson learned: It would have been better to anchor the advocacy function within SPAs themselves, as opposed to becoming a task of the broader project.
This workshop was a positive step in facilitating a collaborative learning environment among MSD practitioners, especially among Feed the Future USG agencies and implementing partners.
There is still much to learn. In particular, participants were eager to understand more about how Helvetas, SDC and other partners monitor and evaluate MSD programs and apply what they have learned to new models.
Market Systems Development: Addressing the Root Causes
In our experience, too many projects fall short in their attempts to achieve meaningful impact and bring about sustainable and large-scale change. They, quite simply, address the symptoms of underperformance while neglecting their root causes.
Systems are dynamic, complex constructs made up by a variety of interdependent rules, norms and functions. Many actors inform behavior and have the power to determine who benefits and who is left out. Changing these systems can lay the groundwork for more inclusive and effective projects.
USAID is increasingly recognizing inclusive Market Systems Development as a critical approach for achieving sustainable impact at scale. USAID’s approach “focuses on building the capacity and resilience of local systems, leveraging the incentives and resources of the private sector, ensuring the beneficial inclusion of the very poor and stimulating change and innovation that continues to grow beyond the life of the project.” (USAID Framework for Inclusive Market Systems Development)
Based on the UK Springfield Centre’s Markets for the Poor (M4P) approach, MSD emerged as a leading framework among development practitioners and donor agencies on both sides of the Atlantic. Its goal, we believe, is an attainable one: to “improve the systems that help poor and disadvantaged people to get the goods, services, jobs and incomes that they need to improve their lives without the need for further development assistance.” (Springfield Centre)