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Market Systems (Approach (analytical framework (identify underlying…
Market Systems
Approach
ideology -
markets are important but fail, especially for poor (contrast - neo-liberal approach of structural adjustment period)
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analytical framework
identify underlying reasons why markets don't work looking at all aspects - core transaction (supply / demand), "rules" (formal and informal), "supporting functions" (infrastructure, skills etc))
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Assess how the market can change sustainably - accounting for who "pays" for activity and who "does" activity, now and under a proposed future arrangement
implementation approach
Catalytic - use small scale approaches which encourage "market players" to pay for and do the activities (contrast - "direct approach" where donors pay and do everything themselves and risk replacing elements of the market and creating an unsustainable improvement)
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Adaptive - use a portfolio of small pilots; scale up successes / cut failures (reflects complexity of markets and the difficulty of identifying ex-ante what will work)
Assessment
strengths
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implementation approach - catalytic, adaptive approach well suited to many market failures
weaknesses
implementation type
Some issues may always require direct approaches to address - e.g. capitalising banks in Ethiopia due to Government failure; or infrastructure project preparation.
Some issues may permit a direct approach initially to "kick-start" a solution, after which results sustain - e.g. attracting new investors which open up a sector
evidence - methodology type makes it hard to collect evidence comparing the approach to alternatives