Livelihoods and market development

Markets matter to the poor and they are a daily reality for most people, in spite of the challenges of extreme poverty, fragile ecosystems, or situations of conflict or natural disasters.

Participation in markets is one of the main livelihood strategies that marginalised producers use to cope with poverty, crises and shocks, and to access products and services that have the potential to enhance their incomes and the quality of their lives. However, markets are imperfect and typically poor producers, particularly women, face obstacles to access appropriate information, skills, financial capital, technology, and business and political connections.

Livelihoods approaches and emergent theories of complexity in society are contributing to an understanding of markets as complex and open systems of relationships between a large number and range of stakeholders. These relationships take place in institutional and physical contexts that influence and are influenced by stakeholder’s actions and choices. Hence, linear approaches and planning techniques are not adequate to understand and intervene in markets; instead, practitioners are starting to recognise the importance of:

• analysis of market systems
• facilitation of sustainable and demand-driven processes of market development that maximise win-win relationships;
  • relying on the resources, interests and capabilities of market stakeholders
• generating clear benefits for marginalised producers.

The challenge faced by the international development community to address poor people’s need to access and respond to income earning opportunities has led to the emergence of new approaches. Pro-poor market development or Making Markets Work for the Poor (M4P) is one such approach that focuses on:

• the structures, institutions and dynamics of markets
• the ways in which marginalised actors participate in them and the processes that shape their participation
• the strategies and practices that can improve markets’ efficiency and competitiveness
• the ways poor producers can engage with and benefit from markets.

This section explores livelihoods approaches and pro-poor market development, providing recommended reading and a regularly updated collection of relevant resources.