Our market systems development analysis is often conducted as if markets needed a visa to cross a border.
A programme may work in one region or country, yet the prices, standards, buyers, currencies and policy decisions shaping its market rarely stop where the programme’s boundaries do.
MSD works best when it stays locally practical but becomes globally informed. This matters now more than ever with OECD preliminary data showing that official development assistance fell by 23.1 per cent in real terms in 2025, the largest annual contraction on record. With less money available, MSD programmes cannot afford to be based on an analysis of only part of the system.
Market systems do not stop at borders
The 2024 paper International trade and market systems development makes this clear. Once a value chain crosses borders, practitioners no longer deal with one domestic market. They face several markets, more actors, different rules of the game, regulatory controls and stronger influence from institutions outside the country.
Local producers, traders and service firms respond to regional trade rules, border procedures, foreign standards, exchange-rate movements and policy decisions made elsewhere. A programme can still work through local actors and build local incentives for lasting change - but it must base that work on a realistic understanding of the wider commercial and institutional environment.
This does not contradict the original Making Markets Work for the Poor (M4P) or MSD thinking. Those frameworks already recognised that poor people's markets connect to national and global economies. The gap lies in practice. Programme teams often acknowledge the wider political economy during design but fail to translate it into interventions, partnerships and risk management.
What programme experience tells us
An independent evaluation of the SDC's agricultural MSD portfolio found that teams often began with overly narrow designs. Wider political-economy risks and external factors were left out, despite MSD literature's clear emphasis on considering them.
Nepal's Samarth programme faced a similar reality. The 2015 earthquake and the Indian economic blockade disrupted implementation and affected results. In the end, these shocks were not outside the market system but became very much a part of it.
InovAgro in Mozambique gives an even sharper example. Mozambique built a strong pigeon-pea export business with India. When India changed its policy to boost domestic production, the price fell from about MZN 40 per kilo in 2016 to around MZN 5 in 2017. Farmers carried much of the loss.
An analysis focused only on farm productivity, aggregation and service provision would have missed the main risk: dependence on one export market and a policy decision made outside Mozambique.
The Food Trade East and Southern Africa programme faced the same problem at regional level. Trade barriers and export bans repeatedly disrupted domestic markets and discouraged investment. It also showed how evidence-based engagement through the right partners can remove some export bans and advance reform in regulations.
There are other useful examples. The Palestinian Market Development programme demonstrated how local firms can connect to markets in the UK, Germany and the Netherlands for better local results. In eastern DRC, ÉLAN RDC used political-economy and conflict analysis to work with industry associations on coffee and cocoa reforms, including export taxes and regional trade barriers.
The lesson is simple: never mistake the location of an intervention for the boundaries of the system.
Questions every programme should ask
Alongside the usual market-system diagnosis, programme teams need to ask:
- Which external buyers shape demand?
- Which trade agreements and standards determine market access?
- Which border agencies raise or reduce transaction costs?
- Which currency movements could change profitability?
- Which policy shocks could change prices next season?
- How exposed is the system to one market, buyer or trade route?
These questions are not just for export programmes. They matter wherever domestic markets connect to regional or global flows of goods, finance, information, standards or policy.
Build capability into the team
Programme managers should bring trade and international business skills into MSD teams from design through to implementation. This would help teams routinely map external demand, standards, border bottlenecks, policy exposure, exchange-rate risks and dependence on single markets.
Business schools and universities can help. Many already have expertise in trade policy, export competitiveness, finance, logistics and strategy. Stronger partnerships would give MSD teams access to skills they may not hold internally, while exposing academic institutions to real market-system challenges.
Start with your next programme review
If you design, fund or manage an MSD programme, take these questions into your next review. Identify one external buyer, rule, currency risk or policy decision that could strengthen or undo your results. Then agree on how the programme should respond.
Share the lesson with the BEAM community (in Comments below). What did you identify? What did you change? And what happened next?
We need more practical examples of programmes that remain rooted locally without losing sight of the whole system.
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