Progress Towards a Resilience Lens for Market Systems (Part 1)

The market systems community has been circling around the idea of market systems resilience (MSR) for some time now. The topic has gotten some play in larger fora over the past year. There was an MSR track at the Market Systems Symposium, sessions at the most recent SEEP Conference, and a smaller roundtable conversation digging into questions of measurement. Yet we are still very much in an emergent space. The U.S. Agency for International Development (USAID)’s goal is to reach a place where the application of a resilience lens is the default posture in market systems programming.

Where do things stand?

Over the past year or so, some guidance and tools have come out. A few programs are iterating attempts to program for and measure MSR. This community is actively exploring various methodological approaches to measurement. This is great news, as there is unlikely one “right” way to do this given the heterogeneity of contexts and resource levels with which we work. To facilitate greater use and adaptation of this first wave of MSR measurement resources, they can now be found in the Tools section of Marketlinks. Exploring these documents will provide a foundational understanding of what we think to-date.

For those who want the upshot now:

One working definition of MSR is “the ability of a market system to respond to disturbance in a way that allows consistency and sustainability, or that leads to improvement, in the market system’s functioning.” Bearing in mind that we care about the market system’s functioning in terms of how it provides protection or enhancement of population well-being (e.g. by providing income or affordable goods and services, etc). We don’t care about the resilience of the market system per se, but what outcomes are achieved through it.

Any good economist or complex adaptive systems thinker will know that market systems are inherently resilient: they are self-organizing systems that will reorganize in response to shocks and stresses. This is why movement of goods in Haiti shifted from trucks to motorcycles to donkeys when roads were destroyed by Hurricane Matthew, why refugee camps have pop-up markets with rather diverse goods, and why it is still possible to purchase anything in Syria if you have the money. What USAID is trying to do through MSR programming is influence the characteristics that shape this self-organization such that the reorganization post-disturbance adds value from a development objective perspective (more inclusive, poverty-reducing, etc).

Those of us who have put forth resources thus far seem to be on the same page in terms of what the general characteristics (or principles or determinants) are that underpin resilience capacity in a market system to absorb, adapt, and transform in response to a disturbance. As a sampling:

• Characteristics: Structural - connectivity, diversity, power dynamics, and rule of law; Behavioral - cooperation, competition, decision-making, and business strategy
• Determinants: Connectivity, diversity, redundancy, governance, participation, and learning
• Principles: Maintaining diversity and redundancy, optimizing connectivity, managing slow variables and feedbacks, fostering complex adaptive systems thinking, encouraging learning, broadening participation, and promoting polycentric governance systems

To be sure, we must continue to build an evidence base for these and a practice around their practical use on the ground. Related, we know that monitoring trends in these characteristics is more important than measuring absolutes. What is the “right” amount of connectivity? Too much and a disturbance impacts the whole market system. Too little and the ability to tap resources and new customers is insufficient in the face of a disturbance. Each context may require a different “ideal” point on the spectrum.

Read Part 2 of this blog to explore lessons so far and critical learning areas yet to be explored.