Synthesis Documents

Market Development in Crisis-Affected Environments, SEEP MDWG 2007 (English/French)

    This paper documents practitioner experience and innovations in market development for income generation and livelihood security in crisis and post-crisis settings. War and natural disaster have devastating impacts on people's ability to generate income and secure a sustainable livelihood that can help protect them from future shocks. Relief initiatives, in their admirable work to meet the basic needs of people affected by crisis, often inadvertently distort private sector markets and unintentionally create vulnerabilities and dependency. Market development attempts to avoid market distortion, and use the power of markets to move communities more rapidly from relief dependency to independent livelihood security. This practice is in early stages but some experience has been gained. The paper discusses the challenges and lessons from this experience with particular reference to 13 cases from around the world.

    Summary of results
    key lessons:
    - It is possible, and recommended, to engage in market development almost immediately after a crisis, or in the midst of low-intensity crisis, as long as populations are relatively stable and security is reasonable.
    - Market development approaches can and need to be adapted to post-crisis settings to be effective, and can be a key component of "building it back better."
    - Donor funding cycles and targeting criteria need to be adjusted to integrate relief and development goals, to be more flexible in implementation strategy, and to reflect the power of indirect targeting to larger or less-affected enterprises, in order to benefit poor people affected by a crisis.
    - It is important that market development programs, even in post-crisis settings, tailor program activity to the nature and extent of the particular market disruption.
    - Market development calls for improved coordination, particularly in large-scale, high-profile disasters and conflicts, but there are ways to develop markets even in a highly subsidized, uncoordinated relief environment.
    - Grant programs need to ensure proper feasibility studies of target enterprises and give greater consideration to the timing of grants and funding.
    - It is critical to take the political economy of markets into account, lest market development programs inadvertently exacerbate inequality, vulnerability, and conflict.
    - Capacity building of the staffs of implementing agencies and the adaptation of market development tools to post-crisis settings are critical to transmit the knowledge donors, implementing agencies, and host governments need to intervene appropriately or contribute effectively.

    Associated Activities and Documents
    »Market Development in Crisis-Affected Environments, SEEP AGM 2006
    Synthesis Documents
    »Private Sector Development in Post Conflict and Peace Building Situations - Some Key Links and Documents (2008)
    »Tools for Economic Recovery in Post-Conflict Situations: A Brief Literature Review, USAID 2007