Synthesis Documents

Donor Approaches to Supporting Pro-Poor Value Chains, Altenburg / Donor Committee, 2006

    Description
    This study was commissioned by the Linkages and Value Chains Working Group of the Donor Committee for Enterprise Development (see link, above). It serves several purposes, namely:
    • to discuss the analytical foundations of the concept, help to clarify terminology and discuss areas of overlap as well as conceptual distinctions between 'value chain' and 'linkage' approaches and related concepts in the field of private sector development;
    • to examine the implications of the increasing coordination and globalization of value chains for pro-poor growth in developing countries;
    • to identify strategies and interventions for value chain development in ways that contribute to economic growth and poverty reduction; and
    • to identify questions for further discussion among the donor agencies involved.
    It consists of seven chapters. Chapter 1 discusses the analytical foundations of the value chain concept and shows how it relates to other theoretical concepts and strategies for the support of enterprise development. Thereby it helps to clarify terminology, identify areas of overlap with similar, and often complementary, approaches and elucidate conceptual differences.

    Chapter 2 examines the relevance of the value-chain concept for pro-poor growth, identifying opportunities and threats for developing countries and pointing to the multiple trade-offs between policy objectives. Chapter 3 then elaborates on the interests of different stakeholders involved in value chain activities and analyzes to what extent interests coincide or diverge. In Chapter 4 different methodologies for value chain analysis and procedures to design intervention strategies are presented. Comprehensive planning approaches are contrasted with less meticulous participatory tools and grant schemes which encourage private sector-led solutions.

    Chapter 5 presents an overview of the major policy options to influence value chains in the desired way. It distinguishes between general private sector development policies and their potential impact on the structure and development impact of value chains and specific value chain policies aimed at building linkages and improving their development impact. Subsequently, chapter 6 discusses the issue of impact assessment. The last part makes out relevant problems and trade-offs with regard to value chain development and identifies areas for future discussion among the members of the Donor Committee (chapter 7).

    Methods for info gathering
    Academic literature as well as unpublished agency reports were reviewed, and a number of donor agencies and academic institutions were consulted, either in person or by telephone or email.