SOAS Research Online

Abstract

'Making Markets Work for the Poor' (MMW4P) is an approach to poverty reduction in developing countries that stresses the importance of commercial activities in the livelihoods of poor peoples, but acknowledges that the competitive market ideal, like states, often fails to provide the structures, incentives and information to include all the poor. It includes analysis from a systems perspective, and presupposes the participation of diverse stakeholders, usually including the poor, non-governmental organizations, civil society and private sector businesses. The approach does not envisage a strong policy dimension to making markets work for poor people. Interventions are not aimed primarily at individuals or groups of the poor themselves, but at making the market systems work. Institutions are key, and improvements are sought through organisational and institutional development initiatives and self-regulatory activities to improve the efficiency and equity in commercial arrangements. This article argues that improvements in the institutional environment for business have an important policy dimension which can create stronger incentives through legal and policy initiatives. One such area which needs attention in developing countries is competition policy, needed to regulate economic activity to protect small firms and other stakeholders, and promote economic initiatives at early stages of development.