Synthesis documents

What works for market development: A review of the evidence, Sinha, Holmberg and Thomas, Sida, 2013

    Description
    This pre-study serves two main purposes: i) to inform Sida of the evidence of what works for market development and the results frameworks and results chains derived from it; and ii) to identify the gaps in evidence and recommend what Sida should focus on in evaluating its market development portfolio. It focuses on private sector development (PSD), financial sector development , trade, and the use of instruments. Given the relevance and importance of agriculture to market development, an appendix is also included to cover this. In regards to PSD, five different areas of intervention are looked at: Policies and Institutions; Support Functions; Industrial Policy; Promoting Entrepreneurship and Investment; and Productivity and Competitive Markets. The first two areas are viewed as constituting the creation of an enabling environment for PSD.

    The methodology has been to conduct a broad review of the literature to develop theories of change and then subject the main results chains to the scrutiny of evidence. Evidence has been drawn from studies using a wide variety of methods of evaluation. It has focused in particular on the findings of synthesis evaluations as these are able to rise above project implementation factors to assess what that type of intervention achieves. This has enabled the study to identify gaps in evidence and recommend what Sida should focus on in evaluating its market development portfolio.

    Summary of results
    The macro evidence that private investment is associated with higher growth and job creation is strong. And, there is good evidence to suggest that a better investment climate results in higher levels of private investment. However, identifying which of the many factors that make up the investment climate should be prioritised is not straightforward. World Bank enterprise surveys provide some guidance but are subjective. The binding constraints methodology needs further refinement with respect to timing and sequencing and needs to be subjected to rigorous evaluation to see if it really adds value.