Synthesis Documents

Notes on MMW4P: DFID Resources (2008)

    The following series of Six Notes were prepared for DFID by Emerging Markets Economics.

    Note 1 MMW4P, Growth and Poverty Reduction
    The experience of MMW4P programmes illustrates how MMW4P contributes to Growth and Poverty Reduction. Growth is likely to be faster and more effective in reducing poverty if the pace and pattern of growth are pro-poor. Macro Economic stability and Investment climate reforms are necessary conditions, but they are not sufficient. While markets play an important role in bringing about the pace and pattern of growth, they may not function effectively on their own. And the poor are often disadvantaged in participating in markets. MMW4P programmes have proven to be an effective way to addressing a range of markets that matter for growth and the incomes of the poor. MMW4P helps to bring about systemic change so outcomes are sustained and its impacts are larger. MMW4P also has implications for donors regarding scaling up aid and growth and 'governance for growth'.

    Note 2 MMW4P's Role in Growth Strategies
    The key messages regarding the role of MMW4P in strategies that will help to accelerate shared growth are:

    Growth strategies need to be informed by the growth, inequality, poverty experience of the country.
    MMW4P has a successful track record in addressing access to finance and financial deepening.
    MMW4P programmes have had large, sustained impacts on the livelihoods of the poor. There are a large number of markets to which MMW4P is well suited.
    The binding constraint to growth will be associated with a set of markets. The MMW4P framework may be applied to make those markets function better and with greater fairness for the poor.
    The appropriate response to government failure will depend on the capacity of government and the extent to which the state is responsive to the interests of the poor.
    The response to market failure will depend on the attitudes and capabilities of the public and private sector

    Note 3 MMW4P:The Framework
    The framework sets out the central role that markets play in promoting shared growth. It enables a more informed approach to markets that avoids the pitfalls of previous extreme approaches of either state control or liberalization. It aims to make markets function better and with greater fairness for the poor

    Note 4 The Market System
    In the MMW4P framework, markets are treated as system consisting of:
    i) an enabling environment;
    ii) rules of the game;
    ii) a set of support functions including market infrastructure, information and complementary markets; and
    iv) the core actors, producers and consumers.

    Note 5 Implementing MMW4P Programmes
    The purpose of MMW4P programmes is to bring about systemic change - changing the incentives that the market system provides to participants so that markets work better and fairly for the poor. Because change is systemic, it impacts all market participants, helping to deliver large scale impacts. And achieving systemic change ensures that pro-poor outcomes are likely to be sustained in the future.

    Note 6 MMW4P Programmes - Lessons Learned
    DFID has launched a series of programmes across Asia, Africa and Latin America based on MMW4P thinking. The lessons from these early programmes are still emerging and contexts vary, so it is not possible to arrive at hard and fast rules on how MMW4P programmes should be designed and implemented. However, this note tries to capture the experiences of these programmes and provide general guidance on the principles and approach to designing and implementing MMW4P programmes based on this early learning. A summary of the key questions that donors should consider in designing and implementing MMW4P programmes is appended as Annex A. The lessons learnt from each programme are presented in Annex B .

    Associated Activities and Documents
    Synthesis Documents
    »Making Markets Work (for the Poor)/M4P: Some key links, 2011