Designing for Tomorrow: A Resilience-Based Shift in Market Systems Thinking

MSD Hub editor's note (Michael Field, Senior Systems Specialist, Vikāra Institute):

This blog explores how the widely used Market Systems Resilience (MSR) framework is helping shift systemic facilitation practice, with a greater focus on catalyzing the shared-value relationships and behaviors that help systems manage risks in ways that lead to ongoing wellness improvements.

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A Shift from Transactions to Relationships: Insights from Global Consultations

Through various consultation processes over the past few years, with more than 50 donors and practitioners in over 30 countries, Vikara noticed a central theme starting to emerge. There is a widely recognized need to focus more on increasing connectivity among businesses and other market actors, especially in shared value commercial relationships. This is in contrast to focusing on simply facilitating transactions or technical fixes. Traditionally, private sector development and Market Systems Development (MSD) approaches have tended to focus on defining specific problems tied to a firm, transaction, or function, which most often led projects to frame their role as an expert that can provide a technical fix. 

Understanding Patterns: Why Market Systems Aren’t ‘Broken’

From a systems-thinking perspective, this technical fix orientation runs counter to some important systems-thinking principles. The ideas of self-organization and attractors, when combined, indicate that market systems are not ‘broken’ and needing to be fixed; rather, market systems evolve patterns that form out of foundational norms, institutions, and mental models. Even in cases where the patterns are problematic, like discrimination or corruption, it is important to gain insights into why such patterns would be perceived as useful or attractive to local actors. In many, if not most, cases, such problematic patterns are grounded in social divisions and norms that are useful in many ways, but also limiting in terms of how societies identify, prioritize, and allocate resources, especially human capital, to improve the wellness of their population.

The Limits of Expert-Driven Solutions: Why Patterns Persist

When a project supplies the expert or delivers the solution, it often ignores the underlying structures, rules, and mental models that forged the incentives that, in turn, led to the problematic patterns.  As a result, such interventions rarely affect how the system is oriented or how it evolves over time. The most common outcome was that the specific targeted pattern re-emerges, and similar patterns would remain unaffected.  Maybe more importantly, since the underlying structures, norms, and mental models are unchanged, the inability of the system to better manage the next similar challenge remains the same.   

Catalyzing Resilience: How MSR Is Transforming Facilitation Practice

With the advent of market systems resilience frameworks, especially the Market Systems Resilience (MSR) framework developed for USAID by Vikāra Institute, that combines institutional theory and complexity concepts and lenses, practitioners are gaining more insights into how societies evolve differing ways of connecting, cooperating, and competing to best manage life’s challenges and opportunities. These emerging insights reaffirmed the importance of self-organization and attractor principles that point to the need for market systems development practitioners to be more catalytic when facilitating systems change. More specifically, practitioners are starting to apply the thinking by designing interventions that catalyze and amplify the benefits or attractiveness of businesses or other market actors connecting across traditional social divides, like gender, ethnicity, age, religion, and socio-economic strata.

Author: Michael Field, Senior Systems Specialist, Vikāra Institute