There are several ways to think about the enabling environment through a market systems framework. A previous blog post talking about market systems metrics nicely summarizes the thinking thus far on monitoring for market systems with an emphasis on the enabling environment. Standard monitoring and evaluation practices focus on changes to formal rules — regulations, laws and policies — as we see throughout the World Bank’s Doing Business Report or in the U.S. Government’s Feed the Future initiative, where indicators track the development of new legislation and analysis provides policy snapshots important to fostering agriculture-led growth.

Informal rules that govern the enabling environment, however, are harder to measure. These rules — the social and cultural norms, conditions and informal processes that motivate behavior — are dynamic, can be implicit and are not easily monitored by standard indicators. Yet, they are often more influential in the functioning of a market than formal policy and regulations of a system. The norms governing behavior in a market can change at an individual or system level based on new information, a market shock or even through the development of a new relationship among key market players. These norms can also be implicit, "the way things are done," with perceptions or unconscious bias taken as a given, allowing inefficiencies in the market to persist. Measuring changes in these informal rules requires collecting new behaviors and perceptions among market actors on the trust and transparency in the system they work in.

To complicate things further, the emphasis thus far on measuring the enabling environment — or for that matter many aspects of the market system — focuses on performance outcomes and impacts. However, the motivations behind behavior change in formal or informal governance processes are just as critical to understand as they indicate whether lasting systemic change has occurred. One useful monitoring and evaluation approach that can both capture outcomes and answer how these outcomes changed is outcome harvesting. Useful in complex environments, outcome harvesting collects evidence on what has changed and works back to determine whether or how a given intervention/program contributed to the outcomes. Examples of this approach used to measure enabling environment outcomes include:

• In Iraq, a Mercy Corps evaluation used outcome harvesting of the Broadening Participation Through Civil Society Program 2013-2015 to look at the 148 most significant changes in behavior or decisions of Iraqi citizens and government that Mercy Corps supported.
• In Mozambique, Tanzania, Zambia and Uganda, ActionAid Denmark used outcome harvesting to document the results of their Tax Justice Program 2012-2016 on key public service outcomes.
• The World Bank conducted 10 case formative pilot experiences in outcome harvesting to identify new learning around how change occurs in complex, multi-stakeholder programs.

Going forward, market enabling environment metrics need to move beyond measuring achievement of outcomes, and seek to understand changes in behavior that have led to those outcomes to fully understand the impact and sustainability of results.

For more information on monitoring, evaluation and learning for market systems, please see this earlier post.