An investigation of Market-Based Development through the DANIDA Market Development Partnerships Programme

Abstract

This thesis investigates the concept of market-based development through the DANIDA Market Development Partnerships programme (DMDP), a challenge fund by the Danish International Development Agency (DANIDA). Market-based development is an emerging development approach that introduces the market in development work in order to achieve business goals and development objectives simultaneously, which has gained influence in the last decades. The investigation looks into this new development approach with the following research question: What challenges and advantages of market-based development can be identified through an investigation of the DMDP portfolio of market-based development projects? By applying a qualitative coding method on data from 18 active DMDP partnerships, several patterns and findings are identified, which are synthesized into 12 main results. These results are categorized into the following five main topics: 1) connection to the local context; 2) local capacity; 3) partnership building; 4) misalignment of interests; 5) market-based development approaches in practice. The results show that 1) being firmly connected to the local context is crucial for project success; 2) lack of local capacity is a challenge and it is important to recognize the issue of capacity asymmetry between partners; 3) partnership building is difficult and tends to be underestimated in the planning phase; 4) alignment of objectives and goals, the premise for market-based development, is difficult to obtain and can cause conflicts if not achieved; 5) some practical methods are more successful than others when carrying out a market-based development project in practice.

Popular Abstract

Market-Based Development - The Future of Development?

The private sector is rapidly gaining footing within several parts of our society and whether one agrees with this direction or not, it seems inevitable to ignore the capacities and capital that comes with private companies. The same goes within the development sector where market-based development is becoming more and more popular and is turning into an established approach by international development organizations to reach development goals. In order to reach an increased and more nuanced understanding of this new method of development, this thesis has investigated the DANIDA Market Development Partnership (DMDP) and has identified several learnings on market-based development based on the 7 years the project has been running. Inclusion of the local context, such as including local stakeholders and networks, and partnership building contribute positively to the projects while lack of capacity from local partners and misalignment of interests between commercial and non-commercial partners contribute negatively to the projects.

The DMDP is a partnership initiative that aims to bring together public, civil, and private sector actors by delivering funding to development projects that include local and international private companies and NGOs for a period of 5 years. The goal is to reach self-sustained development projects that can compete on the market after the funding period is over. This means that the projects must be based on a business case rooted in the companies included. The DMDP currently has 34 active market-based development projects within various sectors like: agriculture, agro-processing, circular economy, services, manufacturing, and green technology. Centering around the DMDP, this thesis has been guided by the research question: What patterns and learnings of market-based development can be identified through an investigation of 18 DMDP market-based development projects? All the findings are synthesized into 12 main results regarding market-based development and further categorized into 5 main categories. The results show that 1) being firmly connected to the local context is crucial for project success; 2) lack of local capacity is a challenge and it is important to recognize the issue of capacity asymmetry between partners; 3) partnership building is difficult and tends to be underestimated in the planning phase; 4) alignment of objectives and goals, the premise for market-based development, is difficult to obtain and can cause conflicts if not achieved; 5) some practical methods are more successful than others when carrying out a market-based development project in practice. These findings contribute to an increased understanding of market-based development however this thesis is only one step towards understanding how marked-based development works in practice. In order to understand how to successfully carry it out in practice, and fully utilize the beforementioned capacities and capital that comes with private companies, further research is necessary.

• author: Jensen, Sofie Østergaard
• supervisor: Per Becker
• organization: Division of Risk Management and Societal Safety
• course: VBRM15 20221
• year: 2022
• type: H2 - Master's Degree (Two Years)
• subject: Social Sciences
• keywords: Market-based development, Private sector development, Markets, DANIDA, Global South, Local inclusion, Partnership building, Local capacity
• language: English
• id: 9096426
• date added to LUP: 2022-08-10 12:59:47
• date last changed: 2022-08-10 12:59:47