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Making Markets Work for the Poor (M4P) Approach
A comprehensive set of three documents on the Making Markets Work for the Poor (M4P ) approach.
 
  • A Synthesis of the Making Markets Work for the Poor (M4P) Approach
    First of three documents
    Download (PDF, 1604 KB) :  [en]   [fr]   [es]  
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  • Perspectives on the Making Markets Work for the Poor (M4P) Approach
    Second of three documents
    Download (PDF, 2220 KB) :  [en]   [fr]   [es]  
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  • The Operational Guide for the Making Markets Work for the Poor (M4P) Approach
    Third of three documents
    Download (PDF, 7243 KB) :  [en]   [fr]   [es]  
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Approaches and methods - Poverty reduction through participation in economic growth

1.2 billion people around the world are currently living on less than a dollar a day, mainly because they lack access to regular employment and reasonable pay. SDC is committed to effective, sustainable economic systems based on market principles, in which poor and disadvantaged members of the population can also take part – as employees, producers or consumers.

Key facts
• Of the 1.2 billion people who live on less than 1 US dollar a day, 70% are women.
• Since 2000, income poverty in China has not fallen despite double-digit growth, because the country's remote rural regions have had virtually no opportunity to participate in this growth.
• Broad-based growth is a fundamental condition for achieving the Millennium Development Goals.
• Young people account for almost half of all unemployed persons in the world.

Economic growth is a prerequisite for sustainable development and poverty reduction in a country, but it is not a guarantee. Experience shows that growth can only contribute to broad-based poverty reduction and to achieving other Millennium Development Goals if it results in more people, particularly the poor, gaining access to reasonably-paid, socially acceptable employment ("decent work") and enables them to unleash their entrepreneurial potential. This is the criterion for the equal distribution of income and the participation of broad segments of the population in the market economy.

Current challenges
One of the main aims of development efforts is to promote an efficient private business sector and properly functioning markets for labour, finances, goods and services. The main challenge in this context is to develop and promote such markets. At the same time they must be structured such that poor and disadvantaged segments of the population can gain better and sustainable access to them and derive benefits from the available opportunities.
Strategies for developing a market along these lines call for an in-depth understanding of market systems and the wide range of socio-economic barriers that currently prevent poor people from participating in economic growth. Such strategies must, for example, take account of the complex relationships between supply (producers) and demand (consumers), supporting measures (infrastructures, services), regulatory and legal frameworks, and the specific roles of the main actors – the private sector, state and civil society. Moreover, consideration must also be given to the varied dimensions of poverty and its causes, which determine the ability of poor segments of the population to earn higher incomes in future and enjoy the benefits of healthcare, education, social security and political participation.

The SDC focus

The SDC bases its activities on a systematic approach to market development, in line with strategies which are summarised under the collective title "Making Markets Work for the Poor – M4P". The common denominator of these strategies is that they define markets as socio-economic systems and endeavour to influence these markets so as to improve the opportunities of poor persons to take part in them, whether as employees, producers or consumers.

Social and economic marginalisation are often the result of top-heavy power structures and discrimination due to gender, ethnic origin, cultural and religious affiliation or age. To overcome these obstacles, SDC observes the following principles in all its efforts aimed at employment and economic development:

  • Gender equality: Women are disproportionately affected by unemployment and underemployment. SDC programmes expressly focus on breaking down structural and social barriers and empowering women to gain access to reasonable pay and decent work.
  • Governance: To enable poor and disadvantaged segments of the population to take an active part in markets, transparency, predictability, effectiveness and non-discriminatory action by the state must be enhanced, and the right of co-determination in the economy and society must be established ("Good Governance" / "Participatory Development"). SDC is committed in particular to enabling the poor to advocate their interests more effectively and enhancing their political impact.
  • Young people: Employment and underemployment affects young people especially, either because they lack sufficient qualifications or because the labour market cannot accommodate them. SDC is committed to ways of ensuring the employability of young people. This is all the more important given the fact that children and young people account for more than half the population in most developing countries.
  • Sustainability: SDC is committed to economic development that is socially and ecologically sustainable. It promotes resources and environmentally compatible strategies.
  • Social standards: SDC accords value to the observance and fostering of binding social standards for society and the economy. Among other things it works to ensure compliance with core working standards and supports the right to non-discriminatory treatment in the workplace, rules governing working hours, living wages and the right to health and safety in the workplace ("Decent Work Agenda").

The focus is on the following thematic areas:

Private sector development
As the driving force behind economic growth, the private sector is accorded a key role in developing and transition countries.

Financial sector develoment
Providing poor households, farmers and small enterprises with improved access to financial services can boost their involvement in economic life and reduce their vulnerability.

Vocational skills development
The aim of vocational training is to create opportunities for productive employment and access to reasonably-paid work for all.

Additional Information and Documents

Documents
  • M4P. A common framework for learning and managing change. Experience in the Balkans
    Download (PDF, 136 KB) :  [en]  
  • M4P. Improving the environment for small businesses in Indonesia and Russia
    Download (PDF, 180 KB) :  [en]  
  • Employment, Income and the MDGs - Critical Linkages and Guiding Actions
    Briefing Paper
    Download (PDF, 72 KB) :  [en]  
  • M4P. Expanding the poor's access to business information and voice through radio in Uganda
    Download (PDF, 223 KB) :  [en]  
  • M4P. The role and impact of radio in reforming the rural business environment in Africa
    Download (PDF, 309 KB) :  [en]  
  • M4P. Developing financial services markets for the poor: financial markets in South Africa
    Download (PDF, 141 KB) :  [en]  
  • Comparative Approaches to Private Sector Development - a M4P perspective
    Download (PDF, 270 KB) :  [en]   [fr]   [es]  

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