ABSTRACT
Kenya Markets Trust (KMT) manages the Market Assistance Programme (MAP), which is a multi-donor-fund initiative that aims to reduce poverty in Kenya by making markets work for the poor. This case study describes how their approach maps out the system dynamics of a market and uses feedback loops to alter behavior and incentives in order to create a more inclusive market value chain.
KMT is learning about how feedback loops are central to restructuring incentives and hence behaviours in a market system. While the demonstration effect of successful business models for agro-dealers created competitive firm-to-firm pressure, the response by other firms was most often not to adopt the practices to copy these economic successes. More often agro-dealers felt threatened by the success of another and they actively used their network to try to impair the gains being made by the customer-oriented agro-dealers. As a result it became impossible to imagine how competitive pressure alone could be the lever to scale up, let alone catalyse systems-wide behavioural change. For wider systemic change, multiple feedback mechanisms are needed, and they need to be aligned to reinforce the competitive pressures for positive change. Experimentation with marketing, ICT and media services has shown promise to create the appropriate ether around which the competitive firm-to-firm pressures would become more powerful and catalytic.
KMT’s experience has yielded other important lessons, including one area of learning among the market actors themselves. Agro-dealers and service providers such as marketing, ICT and media firms learned the importance of 221being customer-oriented and by working together started to develop a system ability to learn and adapt. In the final analysis a market system that is able to find solutions to future problems without external support is more likely to grow and survive while reaping sustainable pro-poor benefit flows.
