"Direct delivery" development is simple. Livestock are sick; let’s distribute vaccinations. People need more food; let's train farmers.
You’ve probably seen an ad campaign imploring you to donate to such a cause. The images tug at your heartstrings and technology lets you to make an instant donation. Despite that direct delivery is far from being the singular approach to development, it is the most traditional and therefore the most well known.
As a result, more nuanced approaches, such as market development, are often unfamiliar territory. Unlike direct delivery, which relies on quick-fix solutions to problems, market development relies on research and analysis to identify the root cause of the issue. People are hungry, but the lack of food is just the surface of the problem. It may be that there aren't enough working tractors to till more land, so farmers are stuck using the same small, worn out plots, seeing poorer results each season. Developing the market means an NGO would seek to create sustainable relationships between local actors, like traders, farmers, shopkeepers and companies, to address that problem. It's a lot like being a psychologist, a research analyst and a match-maker rolled into one.
Global Envision spoke with Emma Proud, Mercy Corps’ in-house market development advisor, to dissect how the agency uses the "Making Markets Work for the Poor" approach, or M4P.
What exactly does ‘market development’ mean? What makes it different from direct delivery?
With direct delivery you see a problem and fix it. With market development, however, you try and understand why the problem is not already being fixed by existing actors. You take a systemic approach, looking beyond the problem to understand what the constraints and barriers are, so that you can identify a place to intervene that will positively and sustainably change the system.
What kind of situations can M4P be used in?
It can be used in any situation. Markets exist and work in the most extreme environments, in the middle of the worst rapid- and slow-onset crises. And of course, also during normal times when they may operate but not work effectively for the poor, for the vulnerable, for women.
If the approach is as pragmatic as it sounds, why isn’t every NGO, government and donor employing it?
It’s really interesting -- I think as soon as you start reading about it, it makes complete sense. However, time, skills and donor expectations are often why people don’t use it. M4P is rooted in market research and analysis which requires a longer time frame and a more flexible approach. Having the right staff to carry out this research and build relationships with local actors is essential. You need people who are inquisitive and look for different solutions if one fails. With M4P there’s also less control, which can be a problem for people working with short program cycles who need to get results within that tight timeframe.
What is the biggest challenge of using M4P?
Impact takes a long time to see. You’re not doing it immediately and you’re relying on other people, so it can take a long time to figure what change has happened or for change to happen. And then measuring that change is one of the biggest challenges.