Maybe the most important lesson to emerge from the application of systems lenses on complex market system challenges is the importance of social norms on decision making. This blog explores one team’s experience with their own learning journey around social norms. Of particular importance is how the team leaned into the complexity of social norms to gain critical insights into how housing investment decisions are being influenced. From those insights they were able to develop an innovative pilot that leverages social norms to catalyze changes that are expected to result in improved housing outcomes. Join the Market System Symposium to hear more about the learnings from this exciting case.
In Peru – like much of the world – housing is a process, not a purchase. For low-income families, the process of building or upgrading a home can often take decades. With this protracted timeline, families’ decisions – about the design, who to hire, where to cut costs, etc. – have a significant impact on the quality and resilience of the home. Social norms, and the social networks through which information and influence flows, are often major determinants of these decisions.
Habitat for Humanity’s Terwilliger Center for Innovation in Shelter applies market systems development approaches to the challenge of ensuring affordable and quality housing for the base of the pyramid, working with the private sector to pilot new products and solutions. But we also recognize that understanding and documenting the social norms around owner-driven construction is key to designing more effective interventions. As the Terwilliger Center developed our housing market systems program in Peru, we intuited as hunches or assumptions a variety of social norms, but also understood that formally documenting these and understanding their strength and prevalence would allow us to design a more effective market systems development program.
Analyzing social norms and social networks appears a daunting task at first, but one that the Terwilliger Center’s team in Peru was eager to take on to better understand their local market. They worked with MarketShare Associates, using two of their tried-and-true tools to simplify this analysis and provide actionable findings: a value network analysis and a social network analysis and mapping process.
The value network analysis (see Figure 1) functions as a lite-version of a much heavier (and more expensive) social network analysis. It was ideal for a program team looking to map the connections between various social actors and households as they try to access information about construction materials, services, and practices.
The social norms mapping process identified social norms (see Figure 2) – the informal rules governing “normal” behavior – and mapped them according to three criteria: 1) prevalence, 2) strength, and 3) relevance. Prevalence refers to the extent to which a norm is present and common across a given group, while strength is the extent to which a social norm influences behavior and sanctions against breaking a given norm. Relevance, the third criteria, was how much the norm hinders specific programming or behavioral change objectives that the Peru team pre-identified.
Our social network analysis of the housing construction sector showed that households had a limited number of influencers. Outside of family and friends, the study found that masons had the strongest influence on household construction decisions. These results pointed to an opportunity to influence household decision making and promote improved construction practices by influencing masons.
How then to influence masons and promote better construction practices? Governments and nonprofits often seek to improve access to formal training to promote professional behaviors with a social good – in this case improved construction practices and material choices amongst masons. But, as figure two shows, the norms analysis found that social recognition is more important to both households and masons than formal training and credentials. Moreover, this norm had both the highest strength and highest prevenance, indicating that access to formal training was unlikely to result in any behavior change.
As one mason made clear: “Training only helps you when you are employed in big companies and not for family housing.”
These norms developed, and persist, in part because households use word-of-mouth referral systems to find a socially recognized mason to build their home. But the system does not guarantee a mason who will build to the highest standards of durability and quality. In other words, social recognition is divorced from the actual quality of the mason.
But what if we could somehow tie social recognition to quality?
From this hypothetical, Guardian Constructor (“Trusted Builder” in English) was born. The Terwilliger Center and our partners in Peru vet mason’s and recognize them as a Guardian Constructor for their work. With this branded designation, developers and financial institutions providing housing credits can confer social recognition on highly skilled masons.
At the same time, it prototypes a new way of building capacity, as developers hire architects and engineers to provide additional support to the masons – specialized on the job training that aligns with existing norms. A Guardian Constructor, in tandem with these technical partners, provide design, titling, and other critical – yet often missing – services to low-income households, while offering reassurances to financial partners about the quality of their investment.
Currently the team is in the prototype and field-testing stage of this intervention, working with an urban developer, two construction technical service providers, and six financial intermediaries. Longer term, the team also hopes to incorporate Guardian Constructor into the Peruvian government’s housing subsidy program.
The Terwilliger Center recognizes that in many countries, including Peru, solving the affordable housing crisis is as much about addressing the “soft challenges” of existing norms as it is the “hard challenges” of technology and construction. And while most norms present as immoveable challenges, finding ways to work around or with them – like amplifying social recognition for masons who apply sound construction practices – is a way to use them as leverage for larger-scale systems change
The following blog post discusses the challenges that often accompany many market systems in developing economies where the incentives and market forces/factors are misaligned in ways that disadvantage lower incomes communities. While these misalignments have serious consequences in many market systems, when the market system is also intertwined in an increasingly vulnerable ecosystem, like a coastal waterway, such misalignments can substantially speed up environment degradation and increase vulnerability. As the post suggests, and a key theme that will be explored at the Market System Symposium, figuring out and catalyzing a change in market system forces and factors such that they combine to favor conservation practices and reward labor fairly is central to any journey to self reliance.
COVID-19 forced companies and governments to reconsider the sustainability and resiliency of global seafood supply chains.
Around the world, the seafood industry plays a critical role in feeding billions of people. It’s also a major economic driver: According to the United Nations, fishing and aquaculture provide livelihoods to around 820 million people worldwide.
In many countries like the Philippines, Vietnam, Ecuador, and Ghana, it is small-scale fisherfolk and aquaculture farmers who dominate the seafood industry. But artisanal fishing communities and small operations are especially vulnerable to disruptions like what we’ve witnessed in the time of COVID-19. Often, it is the small operators who do not have access to insurance, retirement plans, alternative livelihoods, or health care—and if they do, it is unaffordable. There is very little, if any, clear price signaling from the markets they sell to, and many fisherfolk and aquaculture farmers do not have much flexibility in how or to whom they sell their products.
Transitioning to more sustainable fishing practices is also often difficult for these small-scale fisherfolk and aquaculture farmers. Many do not see direct financial benefit, nor do they have the capital needed—or access to affordable loans—to make the financial investments necessary to transform their operations.
The seafood industry also struggles with other serious issues like human rights violations, the use of unethical and illegal work practices, gender inequality, illegal and unreported and unregulated (IUU) fishing, and collapses in marine ecosystems caused by overfishing.
As we enter 2021, we see five major trends emerging from the global development community, government, and the private sector to help small-scale fisherfolk and aquaculture farmers enhance seafood sustainability and resilience. Many of these trends have evolved or arisen in response to COVID-19, but they stand to be ongoing opportunities for progress in the seafood industry.
KEY TRENDS FOR SUSTAINABLE SEAFOOD SUPPLY CHAINS IN 2021 (AND BEYOND)
1. Greater Domestic Import/Export Market Diversity.
COVID-19 highlighted the serious disruptions that result from overreliance on one import/export market. Fisherfolk and aquaculture farmers who relied on selling fresh or frozen seafood products to one primary market experienced major disruptions because of lockdowns and restaurant and hotel closures in the United States, Europe, and China.
To remain in business, small-scale fisheries and aquaculture operations had to quickly pivot to weather the disruption. For example, in the Philippines, blue swimming crab from the Visayan Sea fishery is usually destined for canning and export. It is not widely available in Manila or other local markets. But as the pandemic shut down the export market, we saw a number of entrepreneurs adapt to market pre-cooked, whole crab on social media to local Filipino consumers.
We also saw governments and companies collaborate to safeguard food security and prevent economic fallout for local fisheries and aquaculture providers. In the Philippines, the Department of Agriculture and the private sector launched “eKadiwa,” an online marketing platform to help producers and agri-preneurs sell fresh and affordable farm and seafood products to local consumers.
While COVID-19 accelerated this expansion of import/export markets, we expect this trend to continue in the seafood industry. Diversifying these markets will give small-scale fisherfolk and aquaculture providers more control over pricing and resiliency—in the event of another market shock.
And we will likely see more cross-sector partnerships to develop regional and domestic markets too. This will improve local food security while protecting the livelihoods of fishing communities.
2. Acceleration of Digital Technology for Seafood Sustainability and Market Development.
When COVID-19 upended the import/export market, it was digital technology that opened new markets for many fisherfolk and aquaculture providers. Those who were nimble enough to move their products to a digital marketplace could connect directly to consumers for purchase and delivery.
In May 2020, USAID Fish Right's Fish Tiangge initiative in the Philippines developed an online platform using Facebook to link fishers with local consumers. This one initiative connected 6,000 fisherfolk with more than 300,000 households—enhancing local food security and preserving incomes for thousands of fisherfolk.
Digital technology is also helping to modernize fishing and aquaculture operations, increase profits, and expand awareness of best practices for sustainable seafood. For example, we are collaborating with AquaConnect in India to provide digital solutions that help shrimp farmers identify quality products and farm-input purchases. Farmers also get notices and materials on growth and disease advisories, advice and information on affordable financing, and resources to connect to different markets in India.
Digital technology will continue to be a major player in 2021 and beyond.
3. Private Sector Engagement to Unlock New Solutions for Sustainable Seafood.
To create reliable and sustainable seafood supply chains, we need private sector engagement. Of course, the public sector can and should play a role. But government and the global development community can only do so much to address logistics, aggregate supply, ensure quality, and verify sustainable practices for small-scale fisheries and aquaculture providers.
A truly sustainable seafood industry demands creative, market-driven solutions that fit the local context. We’ve been inspired by local private sector innovators like eFishery: eFishery provides technology solutions, financing options, and input sourcing for small-scale aquaculture farmers in Indonesia, helping them build sustainable and profitable businesses. It also provides an online platform connecting farmers to buyers, to close supply chain gaps and strengthen domestic seafood supply chains. We are seeing more local, regional, and international private sector-led solutions—like Verifik8 and Abalobi and Aruna—for small-scale fisheries and aquaculture worldwide; we expect this field to continue to evolve in 2021 and beyond.
4. Innovative Financing to Spur Change in the Seafood Industry.
New, innovative financing approaches can rapidly scale sustainability solutions in the seafood industry. Historically, small-scale fisheries and aquaculture providers have struggled to access capital to improve their practices and operations or to protect against market disruptions, shocks, and income loss. This is a critical gap.
At Resonance, we are designing and piloting blended finance mechanisms that increase farmer and fisher profitability while also improving sustainable fisheries management. These finance mechanisms all build on partnerships on the ground with suppliers, aggregators, local financiers, and buyers—leveraging local connections and social capital. We are exploring a range of finance solutions for fisheries, including:
For example, Resonance is currently exploring a partnership with Minh Phu, Vietnam’s largest shrimp company; Seafood Watch, a global leader in sustainable seafood; and local banks, to provide blended financing to shrimp farmers to improve their shrimp yields while also protecting and restoring mangrove forests in their properties.
5. New Models to Verify and Reward Sustainable and Fair Labor Practices in the Seafood Industry.
Over the last few years, we have worked with several partners, from private sector buyers to NGOs to governments, to analyze the return on investment (ROI) for seafood sustainability certifications and improvement programs. Each project analysis overlapped in one key area: the traditional certification and auditing of individual small-scale fisherfolk and aquaculture providers is not working, despite significant investments.
There is growing support, from all stakeholders, to develop alternative models to verify and reward sustainable seafood production practices. We’re currently collaborating with Seafood Watch, Thai Union, and others to create the Partnership Assurance Model (PAM), an innovative approach to verifying sustainable aquaculture production at a regional level rather than certifying individual farms and operations. We are starting by working with Seafood Watch, buyers, suppliers and government to use PAM to help improve the quality and sustainability of shrimp produced in Andhra Pradesh, India, and Ca Mau, Vietnam.
Further, PAM and other models like it can help verify sustainable and fair labor practices—an area that the seafood industry has struggled with.
New assurance and improvement models such as PAM will gain greater traction as NGOs, governments, and the private sector seek more effective and cost-efficient ways to accelerate and verify sustainability progress.
SUSTAINABLE SEAFOOD IN 2021 AND BEYOND
While COVID-19 challenged many small-scale fisherfolk and aquaculture providers, it also showed us areas of opportunity where the seafood industry can build more resilient and sustainable supply chains. We expect the trends that we have outlined will play critical roles in helping governments, the global development community, and the private sector make progress toward a more stable, more sustainable seafood sector.
This post discusses the central themes that will be explored at the Market Systems Symposium 2021.
An enduring question in development is why societies seem to get stuck in patterns of behavior that can be hard to understand. Whether conflict, stubborn levels of poverty, elite capture, inability to address climate change, increasing equality, etc., development practitioners continue to wrestle with how best to help catalyze positive change. Applying systems thinking, including embracing complexity, has been an important advancement in helping development practitioners understand difficult questions that are grounded in understanding local contexts. At the same time, complexity and systems lenses suggest that if there is a given pattern, like strong gender norms to limit women from participating in and benefiting from economic activity, such patterns are grounded in something that made that pattern attractive. Through the lens of a western moral framework, this can be hard to align or even disconnect from stated development goals.
These difficult and sticky challenges are central to the Market Systems Symposium 2021. Climate change and related conservation challenges, a new theme at this year’s Symposium, are integral to the longer-term journey to self-reliance of many countries. At the same time, there remain patterns in many of these contexts that are likely to make the journey longer and more difficult in terms of health, economic, etc., outcomes. Similarly, how communities and societies manage shocks and stresses is also critical to a country’s journey to middle income status, a thread that will be explored under the Market Systems Resilience theme. While it seems clear that communities often rely heavily on informal communal social safety net mechanisms to help them weather shocks and stresses, many of these mechanisms can result in patterns that do not align with economic growth requirements. Urban populations and related non-agricultural market systems, while less of a focus for much of the development industry, are likely to be the economic engine that drives a society to middle income status; this will be discussed under a theme exploring systems such as housing, water, nutrition, and more. In all these themes, how private sector actors compete, cooperate, invest, innovate, etc. is elemental to whether a society can grow in ways that are more inclusive and durable. In many developing countries, there are patterns related to firms using their political/market power to create unfair competitive landscapes that limit who can participate and benefit. Questions and debates related to challenging private sector patterns will be covered in the Symposium’s Private Sector Engagement theme.
Whether the patterns relate to conservation challenges, inability to overcome known and knowable stresses/shocks, elite capture in markets, the critical role urban poor play in the journey to self-reliance, etc. learning how best to apply various lenses to local contexts to understand the current attractiveness of problematic patterns will play a foundational role in the Market Systems Symposium’s conversations. Practitioners will also debate, discuss and share learning in how to catalyze changes in market systems that are attractive enough to signal to others in the market system it is time to adopt, adapt, and/or otherwise change behavior.
Additionally, the Symposium will interweave key cross-cutting themes related to how initial changes in market systems can influence change in deeper-seated norms/mental models like the role of youth, gender norms and/or other limiting norms related to vulnerable groups. How entrepreneurship could/should emerge and catalyze increasing innovation over time will also be a cross-cutting theme, including how effective entrepreneurship requires increasing inclusiveness, better internal market systems signaling/feedback and mechanisms that allow for increasing churn/trial and error. The other cross-cutting themes will cover operational issues that include measurement, donor strategies, and adaptive management.
We are excited for this year’s Market System Symposium, especially in light of increasing confidence that life is getting back to some sense of normalcy. Pushing new learning, better practice, and a shared commitment to applying systems thinking to complex development challenges seems more important than ever.
The MSDHub Blog Series is authored by respected implementers and donors of market systems projects globally.