Initiatives that use the MSD approach seek to address the root causes of poor performance in specific market systems. These root causes take many forms, so the issues that programmes address vary widely depending on their goals and strategic framework.
Despite this huge variety, MSD always aims for beneficial change that is lasting and large-scale. In practice, that means interventions seek to modify the incentives and behaviour of businesses and other market players – whether they be public or private, formal or informal.
This approach means that there can never be a 'one-size-fits-all' approach. Instead, the design of every intervention is shaped and refined through careful analysis and understanding of a specific market, value chain or industry.
And yet, while every MSD programme and intervention is inherently unique, there are some important common features:
MSD Objectives
- To reduce poverty, build resilience, reduce exclusion
- To focus on transforming the economic systems, sectors or industries in which target households could or do already participate (for example, by producing, buying or selling goods, services or labour)
- To catalyse change in how these systems function – making markets more financially rewarding, accessible, inclusive and resilient in the long term.
MSD Principles
- They aim to tackle the underlying causes of market failures, rather than just the superficial symptoms.
- They recognise that aid funding can have powerful yet temporary influence. To succeed in the long-term, desirable behaviour changes must reflect the genuine incentives and capabilities of permanent players in the system.
- As each market is a complex 'system' involving many stakeholders, each with a particular set of unique characteristics, any intervention must take this complexity into account.
Methods
- A thorough analysis of how and why systems function as they do – identifying the changes that appear to be key to reducing poverty
- Recognising the limits to initial analysis – committing to on-going review and learning, willing to adapt/revise plans and abandon or make new interventions
- Stimulating replication or 'crowding in' by spreading changes in roles, products or behaviours beyond a few initial partners to a wider circle of market players and beneficiaries
- Embracing complexity – recognising that catalysing lasting change is neither straightforward nor predictable. Approaches require time, curiosity and experimentation. They also need flexible and adaptive management and a commitment to ongoing learning.
The principles summarised above are widely articulated but the specific expression of them here is largely adapted from Making Sense of Messiness report.