Fauno Energy Efficiency in Municipal District Heating
Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
Making Markets Work for the Poor:
Private sector delivery of public benefit goods and services
Closing session
David Elliott – Springfield Centre
1
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
Introduction
Compare with conventional development approaches
Briefly introduce the key elements M4P approach
Rationale and objectives
Framework for understanding and sustainability
Guidance for action and intervention
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
COMPARISON
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
Low income African country (US$270/capita):
rural MSEs constrained by lack of information
Project A: 1999--; US$2.5m/3 2 projects Project B: 1999-2007;
yrs; est. av. $0.5m/yr ~US$1.2m
Increase info for rural MSEs Goal Establish sustainable, effective
“Info is a long term strategic info for rural MSEs via the mass
public good” media
Peak of 7-8m listeners Outreach 7m regular listeners
Initially 10 stations but
Sustainability 24+ stations with MSE
dissemination cut as funding cut independent progs; emerging
to $50k/yr. Other activities new progs & support services: no
remain donor funded: donor funding
Outreach
Project A
Project B
Time
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
What explains the difference?
Provide information to MSEs Rationale Make commercial media work
better for MSEs in rural areas
Symptoms: what info do the Understanding Causes: understand structures,
poor need? practices, incentives of media
system – why not pro-poor?
Unclear: “A long term strategic Explicit: commercial, based on
Sustainability
public good”, but no assessment local ownership & incentives,
of govt capacity or incentives appropriate for local context
Direct involvement & finance: Intervention Facilitate and catalyse:
• info collection • develop own understanding,
• analysis networks & credibility
• prog production • influence, demonstrate & link
• purchase airtime •TA to stations & other players
• coordinate • work through local actors
• no finance to radio stations
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
The essence of M4P
Objectives: more effective
Objectives
and inclusive market systems Rationale
for the poor
Grounded in detailed
understanding of market
systems Framework
Shaped by an open, justified
picture of sustainability
Flexible, multi-faceted
interventions to crowd in Guidance
more market activity: light
touch, indirect, facilitative
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
M4P: what it is… and what it is not
It is… It is not…
Objective of more effective Another “new model”
Rationale and inclusive market systems Promoting “perfect markets”
for the poor Relying on “free markets”
Grounded in detailed Focusing “only on the private
understanding of market sector”
systems
Framework Seeing “no role for
Shaped by an open, justified government”
picture of sustainability
Believing that there should
Flexible, multi-faceted be “no subsidy” in
interventions to crowd in development interventions
Guidance more market activity: light
touch, indirect, facilitative
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
The role of subsidy….to build players into valid roles
IDE – used subsidy to establish them firmly in the market
system as a manufacturer of CWF. Built commercial supply
chain. Invested in social and product marketing. Now
arguing for subsidy to reduce the cost of their product to
certain poor consumers (cementing monopoly position…?)
Mosquito Nets – market facilitation and coordination
support. Light touch support to private sector rehabilitation
(advertising, technology support, transport). Voucher
scheme for particularly vulnerable groups
Media – ideas, innovation, facilitation, and underpinning
capacity building, training and skills enhancement.
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
ELEMENTS
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
rationale Objectives: the strategic rationale
Poverty reduction /
improved welfare
Effective private sector
development generates growth
and, in doing so, builds capacity
and creates opportunities
Improved livelihoods
of the poor
Market systems functioning well
create the right conditions for private
Why?
sector development that is effective
and inclusive Conventional
Market system interventions
development often miss
Development experience shows
that a M4P approach is necessary this link
to bring about inclusive and
sustainable systemic change
M4P
intervention
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
rationale What’s different about a M4P approach?
Conventional M4P
What problems do What problems do
the poor have? The poor have?
Why isn’t their
market environment
providing
solutions to these?
How can I help to
solve these?
… Why isn’t the
market working
for the poor?
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
framework Understanding the poor in systems
Poverty
Reduction / welfare
Wider picture
The poor and their
Symptoms
context Improved livelihoods
Specific market
system
Market system
Causes development
Systemic
constraints
Specific focus
of intervention
M4P
intervention
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
framework From markets… SUPPORTING
to market systems FUNCTIONS
Finance
Mediation Maintenance
& construction
Eg community- Negotiation
based tourism Informing &
Infrastructure Booking
communicating
Information Marketing
CORE
Local Wider
Communities tourism tourism
industry industry
Laws
Setting &
Regulations enforcing rules
Informal rules &
Standards
norms
RULES
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
framework Developing a realistic picture of sustainability
Players
Functions
Who does? Who pays
Business training/advice NGO / PS Donor/PS internship
Advocacy NGO Donor / members
Finance NGO Donor
Construction & maintenance PS Donor
Joint venture mediation NGO / PS Donor
Booking NGO Donor
Marketing and branding NGO / PS Donor
Information NGO Donor
Standards NGO Donor
Market research NGO / PS Donor
Legal services PS Donor
Conflict arbitration NGO Donor
Regional planning NGO/PS/Govt Donor / Govt
Advice to government NGO Donor
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
framework Market systems: key points
Market systems are not just private, but multi-
functional and multi-player
Market systems are interconnected and
interdependent
Rules and supporting functions are often parts of other
market systems
Conventional market failure/public goods arguments
are often based on a narrow understanding of
markets and are static… not very helpful for guiding
intervention
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
framework The centrality of sustainability to M4P
Conventional M4P
Sustainability not Sustainability placed at
operationalised the centre of strategy
and action
Exit strategy = entry strategy
General but ill-defined Builds a realistic,
aspiration for the future transparent
picture of the future:
private and public
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
guidance Intervention design and implementation
Conventional M4P
Specific support aimed
General support for at addressing
market constraints
(a) macro reform through limited
interventions
and
- finite
(b) Direct delivery - focused
of support to - facilitative
target groups
Indirect interventions,
rely on intelligence,
influence & leverage
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
guidance The essence of facilitation
To stimulate market players to In general this means…
perform valid roles (they’re currently
not doing/not doing well) Catalysing: initiating, motivating &
linking…
Strategy for intervention is to
getting others to do things… …
determine a “pathway to crowding
“crowding in” not “crowding out”
in”…
… Which recognises
Light touch intervention, with little
importance of indigenous ownership
financial support to market players
interventions are time defined with
finite resources
… Which establishes credible exit Flexible, opportunistic & multi-
strategies from outset, against which faceted interventions
progress can measured but guided by an overarching
strategy for M4P
This pathway, rather than a step-by-
step handbook, guides what
Less consideration of “what you do”
facilitators do in practice
and more on “how you do it”
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
The market facilitation challenge…
Intermediate and final outcomes
Market not working Market working better
Transactions &
Attitudes benefit flows
Relationships & alignment Outreach &
inclusion
Capacity & practices
Appropriate
functions-players
Incentives & ownership
Innovation &
responsiveness
Period of Sustainable:
intervention on-going &
independent
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
M4P frameworks to guide practice
STRATEGIC SYSTEMIC SUSTAINABILITY PATHWAY TO
FRAMEWORK DIAGNOSIS FRAMEWORK CROWDING IN
Players
Focus of Vision of Action
assessment change Who Who for
Fns
does? pays? change
Measuring change
External
influence
STRATEGIC
M&E Attribution
effort
Intervention
influence
Thematic and Technical Resources Department – Employment and Income Division
Fauno Consortium Skat – Springfield Centre – Swisscontact – FACET – INBAS
Conclusion
M4P presents exciting and innovative opportunities
for agencies in a number of fields
It emphasises inclusion and sustainability rather than
isolation and dependency
It is optimistic that development assistance can make
a difference…
By harnessing the dynamism, incentives and resources of
market players to leverage sustainable pro-poor change
Thematic and Technical Resources Department – Employment and Income Division