Making markets work for the poor

An objective and an approach for governments and development agencies

Published by
ComMark Trust

This is one of the original papers proposing the market systems approach.

Governments and development agencies’ efforts at promoting economic growth and poverty reduction have achieved mixed results. Different approaches have been tried – some have aimed at major regulatory reform and others intervened to deliver products and services directly and "get things done" – with great achievements in some countries countered by obvious lack of success elsewhere.

What’s worked and what hasn’t? Why is it that poor people in some countries have experienced huge improvements in their lives and retain the realistic expectation of more to come while, in many others, the numbers of the poor have grown and their prospects, apparently, are bleak? What explains this difference and how can we learn the right lessons to allow more people to move away from poverty?

Answers to many of these questions lie in markets. Approaches to development that have tapped into and shaped the power of markets successfully have allowed poor people – as consumers, producers and workers – to contribute to and benefit from economic growth. But in other situations markets palpably do not offer this opportunity.

It is the promise of massive, positive impact that makes "making markets work for the poor" a fundamental challenge for governments and development agencies. This paper, drawing on the lessons of international experience, is about how these players should go about addressing this objective and about the essence of the approach they should use to realise the promise of markets.