Is the complexity paradigm killing inclusive market systems development?

I am a geek… there you go; I admit it. And when it comes to complex systems, I am a romantic geek. I believe in the idea that in order to “do” good market-systems development we need to embrace and understand the paradigm of complexity; take what we can from it and adapt it to our work in highly dysfunctional markets. 

This is why I have been shocked in the last year to hear from senior officials in large, international NGOs and leading development agencies -some of whom I know have been pushing for the adoption of systemic approaches-  that they still doubt the value that systems and complexity can add to what they are trying to achieve.

A recent blog by Duncan Green called Politics, economists and the dangers of pragmatism: reflections on DFID’s governance and conflict conference (14 Nov 2014) reinforced my disillusionment and prompted me to write this blog. In his description of a DFID annual get together –where it seems that economists are ‘getting’ the importance of politics and governance issues, Green warns us that this moment of illumination is not complete; in fact, it may contain the seeds of its own destruction.

What is PMSD?

PMSD stands for Participatory Market Systems Development. It is an approach designed by Practical Action to improve how markets work to reduce poverty sustainably and at scale. 

PMSD tries to achieve this with the participation, ownership and leadership of the market actors who belong  to those market systems; not with the leadership and ownership of the NGO. Participation is not just about the NGO consulting the market actors, coming up with the solutions that make sense for the NGO, and then convincing the market actors to implement these solutions. PMSD can only work if the NGO behaves as a facilitator. In other words, as an agent who makes it easier for market actors to transform their market systems in ways that make sense to them.

PMSD is also pro-poor (the term that is starting to dominate the jargon is "inclusive").  This means that the relative benefits for the poor (I prefer the term "marginalised") have to be greater than the relative benefits for the rest of better off actors. 

So, what does this idea of "relative benefits" or gains mean? It means that the benefits are relative to the initial situation of each actor.  For example, if the average marginalised farmer makes an average of 1 dollar/day at the beginning of the project and two years down the line they are making 2 dollar/day, their relative gain was 100%.  Now, if we look at a successful retailer who was making an average of 1,000 dollar/day at the beginning of the project and two years down the line they are making 1,200 dollar/day, their relative gain was 20%.  In this case, the impacts of the project are considered pro-poor.

PMSD is without doubt a fascinating approach to the field of Inclusive Market Development (IMD) that combines economics, sociology, anthropology, politics, business management, social communication, systems theory, complexity, psychology and even quantum physics and zen...

Personally, IMD and PMSD in particular are a manifestation of my ideals: collaboration, win-win outcomes, synergies, openness, fluidity, connectedness, tenderness, adaptability, and appreciation of the infinite complexity of the universe around us.