Detoxifying markets

Reply on LinkedIn | 2 comments

In pursuit of development goals in developing countries, the development agencies in many cases have toxified the markets with interventions that have developed inappropriate commercial behavior, and complacency among the private sector players to take actions on certain changes that are important for them and the people they serve. The markets now look for external support either from governments or NGOs to sustain the changes and to innovate further. This has happened because of non-business people with no clear guidelines, and shorter timeline projects have tried to engage with businesses to reach to their development goals. Does anyone have any experience to detoxify the markets and re-engaging them, in a context where such activities are still in continuation?

10 Sep 2018, 12:29 p.m.

Mike Albu

I agree. Aid can create perverse incentives for businesses to chase the development dollar. Avoiding this is one of the rationales for the M4P / MSD approach. We'd expect MSD programmes to carefully consider the potential negative impact on commercial behaviour of any subsidies or grants. But as you observe, many MSD programmes operate in markets that have already been toxified, and continue to be. Over the years, many MSD managers have told me that dealing with this is the hardest part of their job. Detox solutions are always constrained by local political and administrative factors. Can one persuade other programmes to modify their interventions. Or find partners with a more far-sighted view of their business interests. Either way, one needs tact, diplomacy, relationship building and a willingness to compromise. How it is done is rarely documented. It would be great to have some fresh examples, so please share you experiences.

30 Jul 2018, 9:15 a.m.

Jitesh Kumar Panda

I agree with your views that working with market players requires longer term perspective, which may be beyond the project period.