frequently. Based on the findings they refine their vision for market system change, improve their strategies and adjust their intervention portfolio. The aim is to be pragmatic, building on what works and changing what does not so that the program maximises long term results with the time and money available. 1.2 Components of the market system A market system can be broken down as follows: The The central set of exchanges of goods and services between the providers ‘core’– (supply side) and the consumers (demand-side) at the heart of any market. The These are the regulations, standards, laws and cultural norms and ‘rules’– practices that act to shape market outcomes and govern participation and behaviour in markets. Formal providers of rules are commonly governments or membership organisations. Informal rules are generally a product of local culture and value systems and practices. The functions’ The range of functions that support the core exchange and ‘supporting – help the market to develop and grow including, for example, research and development, infrastructure, skills and capacity, and supporting services (financial service providers for example). 1.3 Market Systems Development programs in action This section provides an overview of the implementation processes of an MSD program. As the diagram below indicates, the steps in the cycle are continually revisited and revised as experience grows. Set the strategic framework This is where the broad strategic parameters for the program are established. It is the work done during the design, to be revised and elaborated regularly during implementation. The strategic framework will respond to DFAT’s Aid Investment Plans. At this point the target group will be identified. It will be based on broad analysis of where the poor are, what they do and gender dynamics. Smallholder farmers, factory workers or women in remote areas for example may be target groups. It will at the same time broadly identify where the opportunities in the market lie for example, through meeting women’s – demands for horticultural products through local supply, or employment from a growing manufacturing sector in the economy. This initial analysis and strategy are continuously revised and refined in the lifetime of an MSD program. Understand the market system Once an implementing team is mobilised, the strategic framework is fleshed out and more specific opportunities can be identified. Implementing teams get out and about in the market place getting to know the players, their incentives and the constraints to inclusive and sustainable growth in the chosen sectors.
frequently. Based on the findings they refine their vision for market system change, improve their strategies and adjust their intervention portfolio. The aim is to be pragmatic, building on what works and changing what does not so that the program maximises long term results with the time and money available. 1.2 Components of the market system A market system can be broken down as follows: The ‘core’– The central set of exchanges of goods and services between the providers (supply side) and the consumers (demand-side) at the heart of any market. The ‘rules’– These are the regulations, standards, laws and cultural norms and practices that act to shape market outcomes and govern participation and behaviour in markets. Formal providers of rules are commonly governments or membership organisations. Informal rules are generally a product of local culture and value systems and practices. The ‘supporting functions’ – The range of functions that support the core exchange and help the market to develop and grow including, for example, research and development, infrastructure, skills and capacity, and supporting services (financial service providers for example). 1.3 Market Systems Development programs in action This section provides an overview of the implementation processes of an MSD program. As the diagram below indicates, the steps in the cycle are continually revisited and revised as experience grows. Set the strategic framework This is where the broad strategic parameters for the program are established. It is the work done during the design, to be revised and elaborated regularly during implementation. The strategic framework will respond to DFAT’s Aid Investment Plans. At this point the target group will be identified. It will be based on broad analysis of where the poor are, what they do and gender dynamics. Smallholder farmers, factory workers or women in remote areas for example may be target groups. It will at the same time broadly identify where the opportunities in the market lie – for example, through meeting women’s demands for horticultural products through local supply, or employment from a growing manufacturing sector in the economy. This initial analysis and strategy are continuously revised and refined in the lifetime of an MSD program. Understand the market system Once an implementing team is mobilised, the strategic framework is fleshed out and more specific opportunities can be identified. Implementing teams get out and about in the market place getting to know the players, their incentives and the constraints to inclusive and sustainable growth in the chosen sectors.
operational-guidance-note-market-systems-development.docx