How can we bring politics to market systems development?
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Politics and market systems development
Modern kids talk about the ‘ick’, minor features of a potential romantic partner that they find off-putting. This might include an irrational repulsion to the way the partner combs their hair, pronounces a certain word, or chews their fingernails. Since I am happily married (and over the age of 17), I have little need of relationship advice. Recently, however, I realised that I have the same reaction to market systems development projects. There are some features that, while seemingly unobjectionable, give me an instinctive nervous feeling.
My number one ‘ick’ is supporting government departments to develop strategies. I understand, in theory, that strategies are a good thing for the government to have, and it’s sensible for development projects to fund them. But I can’t help an involuntary shudder whenever I work on such a project. I’ve had bad experiences in the past. An old client spent a large amount of money on strategy consultants – and when the strategy was finished, the government refused to implement it. I often see overlapping strategies between government departments – or even within the same department. One donor funds a strategy for developing maize, another for staple foods, and another for food security – all of which end up saying different things.
A recent book helped me understand why these issues re-occur. “Gambling on Development”, by Stefan Dercon, is the latest in a series of ‘big idea’-type books on development economics. It argues that successful development is crucially dependent on a ‘development bargain’. This is an informal agreement between those with power – the economic and political elite of the country – to pursue growth and development.
It sounds simple, but Stefan convincingly argues that the absence of a development bargain underlies the failure to develop across much of the world. He gives an example of a meeting with economic advisors in the DRC. They presented a weighty, thoughtful, and effective economic development strategy – much like the ones that gave me the uneasy feeling above. “Walking out of the long meeting”, Stefan records, “I felt like I was coming out of a play performed by committed character actors”. The strategy sounded great, but nobody had the slightest intention of implementing it.
Unfortunately, market systems development projects are not always good at thinking about power and politics. This limitation is embedded deeply into the tools we use. The classic tool used for market analysis is a ‘donut’; a representation of the main transaction in a market, with the different supporting functions, rules, and norms that enable or constrain it. It’s a simple and effective tool – but the analysis of power and politics is typically rudimentary.
Look at the example on the left – it’s fictional, but echoes a lot of real-life market assessments. The analysis of supporting functions is insightful, and ‘interconnected’ donuts helps understand why problems occur. The analysis of ‘rules’ can end up as a bit of a fudge; a list of key regulations or social norms that aren’t working, but little insight into why that is.
To improve, we need new approaches– possibly drawing from the zoo of animal metaphors that Stephan uses throughout his book. Is your market a hippo, where the formal structures of a state – courts, rules, and political bodies – are small and mostly irrelevant, with the more important ethnic, personal, and business structures hidden under the surface? Is it a hyena, where the state acts as a scavenger, preying on its population? Or a lion, with a political and business elite committed to growth?
Tips and advice
We think there is a lot of room for experimentation and growth in this area, so would welcome your ideas and frameworks. Here are some thoughts from our side:
- Take politics seriously in your market selection and analysis. In our standard framework for selecting markets – growth, feasibility, and impact – politics takes a relatively junior position, mentioned (if at all) in the ‘feasibility’ section. We tend to think more about the formal, visible political structures – such as regulations or government bodies – and neglect the informal, hard-to-observe ones. Think about what aspects of politics are most important in your context, weigh it heavily, and don’t be afraid to skip markets where there is no opportunity for change.
- Hire staff with good political awareness. There’s a constant tension between hiring staff based on technical ability, and on their personality and soft skills. While I generally favour the latter, political awareness is one thing that more inexperienced staff can’t easily pick up – you will need experienced national staff who understand and can help you navigate the political context.
- Look for islands of good performance. In most places, governments and elites are not homogenous. There may be one or two government departments which are performing well. There may be some markets where the business elite is benefitting from wide-spread economic growth, with more openness to change. Look for these and leverage them.
- Don’t be naïve about your ability to create change. If you identify a rule hindering market transactions, inefficiencies in government systems, or an oligopoly in the market, then ask who benefits from them. If the powerful actors are benefiting from the current system, then is it really feasible that your programme could disrupt them? If not, then you might want to find a different market.
That’s all from us this week. Let us know if you have any comments and tips based on this newsletter, what other topics you would like us to cover, and we will see many of you on our course soon,
The DevLearn Team