The MaFI-festo: changing the rules of the international development "game" to unleash the power of markets to end poverty
Bilateral and multilateral donors and NGOs re-write the rules of the International Development Cooperation System to unleash the real potential of markets and the private sector to end poverty at a large scale... easier, faster and cheaper. How? Through trust-based partnerships, complexity science, effective organisational learning, systemic M&E and co-volutionary experimentation.
The international development cooperation system was built upon values, assumptions and principles of charity, Western superiority, and Cold War fears. It's methods have been deeply rooted in top-down planning, centralised administration, heavy-industry engineering and the promise of silver bullets. For more than six decades these foundations have shaped the ways in which poverty is perceived, addressed and measured as well as the evolution of donor agencies and NGOs.
During the 1980s and 90s, the success of microcredit programmes and pro-poor business development services driven by donors and NGOs had an important influence on the architects of capitalism. Instead of a mere tax payer or an autocratic philanthropist, the private sector started to see itself as a dynamic and innovative development agent with the potential to reduce poverty whilst making a profit. "According to World Bank figures, net private capital flows to developing countries in 2007 topped $1tn. In the same year, overseas aid from OECD countries totalled $103.7bn […] The question is not whether the private sector is relevant to development, but how better to harness the dynamism of companies and the market." (Peter Davies).
We are currently witnessing a convergence of donors, NGOs and private firms at the so-called “bottom of the pyramid” with mixed results. On the one hand, this is promoting an exchange of approaches and tools that value efficiency, accountability, flexibility, innovation, social sensitivity and environmental sustainability. However, this exchange is in most cases patchy, sluggish or superficial. On the other hand, such convergence is putting these actors on a collision course where lack of trust and cut-throat competition is leading to wasted resources, lost opportunities and a legitimacy crisis of the international development system and capitalism as a whole.
“At present, the private sector has significant developmental impacts but these are poorly understood and largely ignored by the donor community" (idem). Unfortunately, the misconceptions and sweeping generalisations do not stop there. It is not unusual to hear representatives of donor agencies, NGOs and firms saying that NGOs are inefficient and unsustainable; that the private sector is greedy, evil and unscrupulous; and that donors are bureaucratic and only interested in benefiting their tax-payers and entrepreneurs.
No wonder that even the diplomats who met last year at the 4th High Level Forum on Aid Effectiveness in Busan (Korea) recognised that, despite the “many positive results” achieved by the international development co-operation system, “progress has been uneven and neither fast nor far-reaching enough” and that “aid is becoming increasingly fragmented, despite some initiatives that aim to address this challenge”.
One of the main problems is that the foundations that gave birth and still sustain the current development system have been hardly touched. This has created deep fractures between the fundamental paradigms, principles and procedures of the private sector, donors and NGOs. Such fractures have to be healed before these stakeholders can effectively combine their strengths, resources and skills to unleash the true potential or markets and capitalism to reduce poverty faster at a large scale and to protect the environment at the lowest costs possible.
- Changing how we work in the field
- Balancing flexibility and accountability
- Building the capacity of facilitators
- Changing what and how we measure change
- governments and their donor agencies enforcing rules, creating enabling environments for the private sector, NGOs, grassroots organisations and academia (R&D).
- NGOs empowering marginalised producers to engage with other markets actors using their assets and knowledge to their full potential; helping them to add value to the markets and increase the adaptability of these markets to future shocks; and identifying both possibilities and needs from marginalised actors.
- private firms listening to the signals from the NGOs about possibilities and needs of marginalised producers and consumers; designing, field-testing and taking to scale new products, services and business models that leverage the potential of marginalised actors or satisfy their needs; and using their distribution networks to buy produce from marginalised farmers and sell appropriate products and services to marginalised consumers.
- Study the MaFI-festo and identify the issues and recommendations that resonate with the organisation (it can be a donor, and NGO or a private firm investing in the development of a particular market system)
- Participate in the MaFI-festo Dialogues (workshops, seminars, conferences, etc.) that will start in 2012 in different countries.
- Join MaFI on LinkedIn or any of the Web platforms that MaFI and its members will set up to keep the MaFI-festo champions coordinated and informed
- Participate in the SEEP Network Mid-Year Meeting (27-28 June) and in the SEEP Annual Conference in November (both events in Washington, D.C.)
- Participate in the other two synergic initiatives that MaFI is promoting with the support of The SEEP Network: The Complexity Dialogues and a global research & training programme on Systemic M&E (coming up soon).
- The Complexity Dialogues have two main objectives: (i) to bring together complexity experts and inclusive market development practitioners to learn from one another and (ii) to introduce complexity thinking into development projects designed to make markets work better to reduce poverty and protect the environment.
- The research/training programme on Systemic M&E will help donors, NGOs and private firms to develop and field-test frameworks, indicators and approaches to measure the impact of their investments and interventions using complex systems and organisational learning theories.
- All MaFI members who participated in the discussions that led to the current version of the MaFI-festo (see a list below). Also those MaFI members who believe in this idea, are talking about it in their own circles, and will help to make it a reality.
- The SEEP Network for its constant support to MaFI, in particular, Sharon D'Onofrio and Margie Brand.
- Some visionaries within donors agencies USAID and DFID such as Jason Wolfe, Stacey Young, Jeanne Downing, Lane Pollack and Catherine Martin who see the potential of the MaFI-festo and are exploring ways to make synergies with it.
- Marcus Jenal for his help synthesising the lengthy and intricate discussions that led to the current version of the MaFI-festo and for his endless energy and enthusiasm.
A list of MaFI members without whom the MaFI-festo would not exist (in no particular order):
- Shawn Cunningham
- Jason Wolfe
- James Tj
- Christian Pennotti
- Mary Morgan
- Chris Pienaar
- Helen Schneider
- Rajiv Pradhan
- Anuj Jain
- Marcus Jenal
- Fouzia Nasreen
- Erinch Sahan
- Ekanath Khatiwada
- Alexis Morcrette
- Mona Gupta
- Alison Griffith
- Mara Bolis
- Christine Hicks
- Margie Brand
- Conor Riggs
- Sonali Chowdhary
- Hannah Schiff
- Kamran Niazi
- Paul Bundick
- Ben Ramalingam
- Yibin Chu
The duration, number and complexity of the discussions have been very high and it is very likely that some names are missing. Sincere apologies.