ADVISORY GROUP

MDF AND SYSTEMIC CHANGE – A SUMMARY FOR PROGRAM MANAGERS

6 JULY 2018

AbstractThis report is one of the products from the MDF Workshop on Systemic Change held in Fiji 12-14 March 2018. It addresses a central aspect of MDF – how it operationalises the concept of systemic change and works to pursue it. And it offers some suggestions as to what Program Managers should look for as they engage with the program.

Bob Warner, Alexandra Miehlbradt & David Swete Kelly Contents

2Acknowledgments 2

1 Why this summary? 1

2 What is MDF’s concept of systemic change, and how does it try to promote it? 2

2.1 The concept 22.2 How does MDF come to grips with systemic impediments to inclusive growth?

42.3 The domains of influence 52.4 The domains and systemic change 62.5 Where do we see systemic change? 83 The emerging lessons on systemic change 103.1 MDF’s experience of systemic change 103.2 Measuring, sharing and communicating systemic change 133.3 Considerations for DFAT Program Managers 13

AcronymsDCED Donor Committee on Enterprise Development

DFAT Department of Foreign Affairs and Trade

MDF Market Development Facility

PHAMA Pacific Horticultural and Agricultural Market Access

SEA Strategic Engagement Area

Acknowledgments

This paper draws on insights gathered from the Market Development Facility (MDF) Systemic Change Workshop held in Suva in March 2018. The authors, who along with Ian Kershaw make up the advisory group for MDF, are grateful for comments and suggestions from members of the MDF team that attended the workshop, particularly Shahroz Jalil and Christian Portal, and from Harald Bekkers, Team Leader

of MDF 2011-2018. The authors are also grateful to Christine Pahlman, James Marshall, Sophie McKinnon and Thompson Yuen from the Department of Foreign Affairs and Trade (DFAT) who attended the workshop and provided comments on drafts of the paper.

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1 Why this summary?

The Market Development Facility (MDF) aims to create enduring market-based pathways that improve the economic participation, and hence the standard of living, of poor and excluded groups. MDF is distinctive because it: uses indirect, facilitative approaches to address systemic impediments

to the adoption of commercially viable yet inclusive innovations; is multi-country, operating in widely differing contexts; operates using adaptive learning; works with the domestic private sector and other stakeholders such as

government agencies and civil society to promote inclusive growth; and may have a comparatively long lead time until it delivers impacts, as it

undertakes significant market exploration, involving diagnostic analytics and experimental co-investments with private sector partners.

Figure 1 provides some more information on MDF.

Figure 1 Introduction to the Market Development Facility

MDF is a multi-country market systems development program. It started in Fiji in 2011, Timor-Leste in 2012, Pakistan in 2013 and Papua New Guinea and Sri Lanka in 2015. MDF supports businesses and other market actors with innovative ideas, investment and regulatory reform that will improve business performance, stimulate economic growth and provide benefits for poor women and men be they workers, producers or consumers. In each country, MDF targets a few aspects or parts of the economy (called Strategic Engagement Areas) with the potential to drive inclusive growth. These may be sectors or cross-cutting issues in the economy. The core of MDF’s implementation is partnerships with businesses. MDF also implements a range of other ‘influencing’ interventions that build on partnerships to foster transformational change in the market systems it targets. For more information, see the MDF website.

For people who have not been immersed in the establishment and growth of Market Systems Development approaches, it can take some time to come to grips with how MDF works and the way that it interacts with the private sector to achieve inclusive growth. This summary addresses how MDF operationalises the concept of systemic change and works to pursue it. And it offers some suggestions as to what Program Managers should

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consider as they engage with the program. It complements guidance given in the Market Systems Development Operational Guidance Note1.

2 What is MDF’s concept of systemic change, and how does it try to promote it?

2.1 The concept

The Donor Committee on Enterprise Development (DCED) defines systemic change2 as

Change in the underlying causes of market system performance that leads to a better-functioning, more pro-poor market system.

In practical terms, ‘change in the underlying causes of market system performance’ refers to innovations, practices and relationships that are new in the particular market context. These include business models, business practices, relationships among market players, information flows, market institutions, policies, regulations, government practices, cultural practices, standards and so on.

These changes address or respond to a fundamental market problem, such as a market failure, state failure or an adverse norm or belief: in economists’ parlance, problems with the institutions or rules of the game that underpin market exchange. Relating systemic change to institutions and rules of the game locates the work of MDF and other market systems development programs within a well-established framework developed by economics, political science, anthropology and other social science disciplines. (It also provides a defensible argument for using aid to work directly with the private sector.)

Figure 2 explains the role of institutions and rules of the game in economic development.

1 DFAT November 2017, Market Systems Development, Operational Guidance Note, http://dfat.gov.au/about-us/publications/Pages/agriculture-and-food-security-operational-guidance-notes.aspx

2 Donor Committee for Enterprise Development Standard for Measuring Results in Private Sector Development, Version VIII, April 2017.

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Figure 2 Institutions and economic development

The economist, Douglass North, who won a Nobel for his work on the role of rules of the game/institutions in economics and development, defined institutions as ‘humanly devised constraints that structure political, economic and social interactions’, and described them as:

Informal constraints (sanctions, taboos, customs, traditions, and codes of conduct) and formal rules (constitutions, laws, property rights)…devised by human beings to create order and reduce uncertainty in exchange. Together with the standard constraints of economics they define the choice set and therefore determine transaction and production costs and hence the profitability and feasibility of engaging in economic activity3 (North 1991).

Among other things, these institutions have evolved to address two information related challenges: agency - trusting someone to act on your behalf, and enforcement – making people stick to the terms of a contract. Without institutions, these challenges seriously limit the potential scope for exchange – the basic function of markets.

If a country’s market system does not work well, sustainable inclusive growth is very hard to achieve. But the functionality of markets depends very much on the presence and impact of formal and informal ‘rules of the game’. Pro-market ‘rules of the game’ are needed to address problems of trust and information, to make it possible to make transactions and contracts that span family, tribal, ethnic, religious and geographic boundaries, and that can operate over time. Without such rules, the scope for economic activity is limited, risk-taking is discouraged and investment – crucial for growth - will be constrained. And if the prevailing norms do not allow for economic participation of all people, regardless of gender, age, religion or ethnicity, growth will not be inclusive, nor will it make best use of the nation’s human resources.

In each of the countries where MDF works, the prevailing rules of the game, together with characteristics of the markets as they have evolved, do not fully support inclusive growth. The prevailing customary and formal rules have often developed to serve the interests of the political and commercial elite. These rules may not always be supportive of inclusivity, and may often work against it (for example where they restrict competition and entry). Further, customary attitudes towards gender and the roles of men and women can provide a disincentive for women to engage in economic activity outside of the home or village.

3 North D.C. 1991, Institutions, The Journal of Economic Perspectives, Vol. 5, No. 1. (Winter, 1991), pp. 97-112.

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Some problems with rules of the game may be amenable to change through building or reforming formal institutions and trying to make government policy and behaviour more market friendly. But this is not always the case.

In all of the countries where MDF works, the formal system has been adapted from a colonial legacy and may only partially align with local culture and beliefs. It may also have very variable reach throughout the countries: for many poor people, it is virtually inaccessible. If trust between different elements of a community is weak, or has been disrupted by internal conflict, formal institutions may not work to make people willing to exchange with others across divisions created by, or responsible for conflict. And different cultures and religious beliefs may underpin an unwillingness to do business with all people on an equal footing, or make it acceptable to exclude people from economic participation on the grounds of gender, age, ethnicity or religion.

In these circumstances other approaches, besides working directly on changes in the public sector, need to be used. MDF implements one such approach.

While MDF typically co-invests with a business, and – especially in the countries with shallower, more fragmented markets – helps the business prepare for and implement the investment, its aim is much more than business development. It works with businesses to demonstrate that non-inclusive norms and rules of the game can be profitably overcome, or to introduce a market enabling function or service whose absence is holding back pro-poor market development in other parts of the economy. MDF also uses other instruments besides co-investment to address systemic constraints to inclusive growth – including working with business associations, government agencies, or in non-financial arrangements with individual firms – when this seems to be the best way to achieve results. Together, these instruments counter problems with institutions/rules of the game so that markets can work more effectively and inclusively.

2.2 How does MDF come to grips with systemic impediments to inclusive growth?

A simplified characterisation of how MDF works follows:1. MDF identifies economic arenas that have the potential to offer

expanding opportunities for poor and excluded people to achieve better employment and business outcomes, and through that, inclusive growth. This work looks in detail at the nature of poverty, the

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characteristics of poor, and the factors shaping the potential for change, and in particular for women’s economic empowerment.

2. MDF then iteratively identifies and works on these impediments and opportunities, through an evolving mix of interventions, analysis and reflection that informs further interventions.

Typically, this work identifies particular market functions and market segments that appear susceptible to improvement using the instruments available to MDF, and sets of interventions aimed at bringing about improvements. These interventions are designed to address or counter specific systemic impediments that impact the particular parts of the economy where MDF works, and to promote inclusion.

The process may also identify issues that MDF is not well equipped to address that can be left to later, or to other programs to deal with. (MDF may well collaborate with other programs that are in a position to take action). The process also identifies issues that are difficult to change in the short to medium term – usually because of vested interests – and looks for ways to work around them.

3. MDF then tracks direct and indirect changes brought about by the program to strengthen the market systems, and the effect this has on the livelihoods of poor and excluded people. Lessons from this inform ongoing investments and interventions.

2.3 The domains of influence

In essence, MDF identifies a set of nested domains (typically three) that both align and are co-determined with a hierarchy of objectives, starting from the highest-level outcome to the specific changes that individual interventions are expected to achieve. The domains are as follows (Figure 3 discusses the nomenclature for these domains). 1. The Strategic Engagement Area (SEA), which is that part of the

economy where the cumulative and complementary effects of MDF’s work are expected to generate inclusive changes – the highest level objectives. For each SEA, MDF undertakes comprehensive analysis of the constraints to, and opportunities for, more competitive, sustainable and pro-poor growth.

2. Within each SEA, MDF identifies a set of Market Function Areas, which are broadly defined as market functions (e.g. provision of inputs and information to farmers) or market segments (e.g. the export market) where change is needed to bring about inclusive growth in the

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Strategic Engagement Area. Market Function Areas include those parts of the supply chains and final demand (and their relevant policy, regulatory and behavioural norm structures) where MDF actually works.

3. Within each Market Function Area are a cluster of Intervention Areas, which detail the specific market related activities that MDF’s market systems development approach can directly influence through co-investments, non-financial partnerships and memoranda of understanding, studies, and influencing and dialogue interventions. This is where, individually or collectively, interventions target the manifestations of the constraints and dysfunctional rules of the game/norms that are standing in the way of growth and inclusion.

Figure 3 MDF’s hierarchy of changes - what’s in a name?

The labels for the different levels of MDF’s hierarchy have been the subject of considerable debate because the parts of the economy encompassed in each level are not uniform. MDF begins formulating its objective for each domain before the boundaries of it. For example, if a key program objective is to enable more poor women and men to get jobs in urban areas, then MDF looks for parts of the urban economy with the potential to grow and drive inclusive job creation.

The part of the economy chosen may be broader or narrower depending on the context. Thus, it is challenging to find a standard term for each level that describes the variety of parts of the economy it defines in different cases. The reality is that the names for the levels don’t really matter. They could in fact be A, B and C. What matters is that there is an objective and a boundary for each that effectively responds to the program goal and the analyses of the market systems.

2.4 The domains and systemic change

Figure 4 illustrates these domains (and the inter-relationships between them) for one of the Fiji program’s Strategic Engagement Areas (Horticultural Exports) in Phase 1 of the program.

2.4.1 Strategic Engagement Area

The objective for the Horticultural Exports SEA was to improve the livelihoods of small scale horticultural farming households and contribute to growth. To do this MDF identified five interlinked market functions that

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needed to be established or improved. One of these (related to bio-security) was best supported by another DFAT program – the Pacific Horticultural and Agricultural Market Access program (PHAMA). MDF was able to influence changes in the other four market functions to contribute to the overall objectives for the SEA.

2.4.2 Market Function Area

Figure 4 expands just one of these Market Function Areas, related to agricultural inputs. Within this Market Function Area six Intervention Areas were identified in which linked changes were needed for overall progress to be made in the market. Once again, one of these (registration of agricultural veterinary (agri-vet) chemicals) was better handled by another market actor, but MDF targeted the other five Intervention Areas.

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Figure 4 MDF’s domains of systemic change – an example from Fiji

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2.4.3 Intervention Area

Again Figure 4 expands just one of these Intervention Areas, related to supply of products and services. Within this domain, MDF worked directly on eight linked Interventions, including five business partnerships, and three strategic dialogues with key groups. These Interventions themselves consisted of a collection of related Activities (not shown in the chart).

2.5 Where do we see systemic change?

Systemic change can occur and bring about inclusivity benefits across all of these domains, as well as at the level of individual interventions. In the horticulture exports case, the following systemic changes have been occurring.

2.5.1 Intervention Area

MDF has now established viable and sustainable business models within Fiji that are improving access and availability of quality inputs and services – see Figure 5.

Figure 5 Input supply business models established with MDF support

Business model Interventions

Provision of agricultural lime (Aglime) to reduce soil acidity

Two partnerships and associated influencing and engagement activities.

Provision of improved seeds Two partnerships and associated influencing and engagement activities.

Provision of vegetable seedlings One partnership and associated influencing and engagement activities.

Barge services – important for connections to markets given the archipelagic nature of Fiji

One partnership and associated influencing and engagement activities.

Operation of a tissue culture laboratory One partnership and associated influencing and engagement activities.

In three of these cases (local production of Aglime, importation of improved vegetable seeds, and operation of a private sector tissue culture laboratory), this is the first time that viable and sustainable business models have been successfully established in the country, despite multiple donor-supported efforts in the past. Having these new business models in place is already a significant systemic achievement for MDF. To make these business models more viable, MDF has undertaken significant work

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to help build critical sales volume, and increase access to local communities. This included work in distribution and logistics.

2.5.2 Market Function

These new business models are noticeably enhancing the broader ‘agricultural inputs’ market function in Fiji – a market function which MDF identified as significantly in need of improvement. There is solid early evidence4 that this success is contributing to multiplier effects, networks, and dynamism that in turn is building the business confidence of others in Fiji’s agricultural inputs sub-system. For example: There are increasing signs of other firms copying the innovations

introduced by MDF’s partners in barge services and products such as Aglime, tissue culture, and seedling nurseries.

Input availability has improved in many major agricultural areas in Fiji (on the islands of Viti Levu, Vanua Levu, Taveuni).

The agricultural inputs sub-system is being approached more holistically. Small farmers are increasingly being seen as a credible consumer segment by input companies, logistics service providers, certification companies, banks, etc., whose share of the business pie is therefore increasing.

Networks are forming between distributors and input manufacturers and importers, and conversations are more commercially oriented around negotiating distribution territories and specific prices.

2.5.3 Strategic Engagement Area

In the Strategic Engagement Area MDF’s strategic intent in Phase I was that men and women farmers benefit from more access to markets. There is early evidence in MDF’s impact assessments5 that adoption of improved inputs by farmers has resulted in increases in smallholder productivity, profitability, income and resilience, and that adoption is beginning to escalate. There is also evidence that better production is contributing to growth of the overall horticulture and agro-exports market system.

4 See, for example, the report of the March 2018 Advisory Group mission to Fiji, which drew on interactions with the MDF team, business partners and private and public stakeholders.

5 MDF carries out early impact assessments (using small, less rigorous sample surveys), and more fully fledged assessments for each business partnership: the results are captured in the Annual Aggregation of Results report – see here for the most recent.

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2.5.4 Iteratively responding across the domains

Over time, MDF responded to emerging issues and traction in Fiji agri-inputs. Figure 6 summarises some of the issues that emerged over time, and indicates how MDF responded to them.

Figure 6 Emerging issues and MDF’s response

Issue Response

Increasing access to one agri-input did not catalyse broader change

MDF worked with multiple companies to invest in input provision – then other market players took notice.

Typical of a small, largely rural economy, Fiji has lacked the management/business consultancy support that is provided in other countries commercially or by trade associations. Informal or family based transmission of management skills is constrained in many communities where people are engaged primarily in production for their own consumption.

MDF provided considerable mentoring and assistance over a number of years to ensure the success and sustainability of new business models. MDF is also working to improve networking and relationships between agricultural input suppliers.

The availability of inputs did not automatically lead to the distribution of those inputs. In part this reflects the challenges resulting from Fiji’s archipelagic geography and limited inter-island transport

MDF facilitated innovations in logistics to address this market gap.

There was a prevailing norm/belief that smallholder farmers did not constitute a viable market segment.

MDF encouraged multiple companies to target small farmers and facilitated dialogues with the private sector and government about small farmers over a number of years. Once MDF-supported new business models had been in operation for some time, companies began to explore additional market segments. With MDF support, service providers such as financial institutions are beginning to target the horticultural sector and small farmers.

Fiji exhibits a pervasive market constraint with regard to dissemination of information and adoption of innovations.

MDF played a strong role in sharing information with various market players and facilitating links among market players. Now that a number of innovations are in place and functioning successfully, other companies are beginning to copy various market functions and invest in related activities, and networks are beginning to form autonomously.

As a consequence of MDF interventions and its continuing engagement with market players and government, and the reactions and responses that different market players have made, there have been significant changes in the horticulture sector in Fiji. Figure 7 characterises the ‘before’ and ‘after” situations, showing how the range and depth of services to the sector has been enriched.

3 The emerging lessons on systemic change

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3.1 MDF’s experience of systemic change

Experience from all of the countries where MDF is operating support the following lessons.

3.1.1 The nature of systemic change

Systemic change is not an endpoint but an ongoing process that evolves over time. The pathways of systemic change will become clearer over the first few years of a program. While MDF outlines each broad strategic engagement area and the objective for it up front based on analysis, it defines all other parts of the pathway over time as it gains understanding of the market through experience.

Figure 7 Fiji Horticulture – before and after MDF engagement

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Source: Presentation to Systemic Change workshop, Mujaddid Mohsin:

Systemic change occurs at different levels of the market. A sustainable business model that fills a previously empty market function is an example of systemic change, but then so are the changing attitudes of agricultural input suppliers towards farmers as customers.– It is important that MDF ensures that its reflection on results does not

focus only on interventions, but also considers emerging changes across all levels and how innovations are beginning to link together (or not) to influence broader change.

Systemic change is facilitated by a carefully constructed cluster of interventions that address an underlying problem from different perspectives, or different manifestations of the problem.

Systemic change may not be facilitated through business partnerships alone, but may need complementary work aimed at engaging with, and influencing, a broader range of stakeholders in the private and public sectors.

3.1.2 Pursuing systemic change

Often the exact character of problems impeding inclusive growth only becomes clear when interventions have been put in place. Up front analysis and diagnostic work can only take a program so far when it comes to understanding the actual, as opposed to the hypothetical, constraints on doing business and investing for inclusive growth.– Early interventions will need to be exploratory. This does not mean

that they will not have objectives in line with the overall SEA objective, but it does mean that how the partnership objective is expected to contribute to this overall objective may be somewhat

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vague at the early stages of implementation. It is important that the learning gained from early interventions is analysed and fed into strategy decisions that flesh out the pathway of systemic change.

There may well be some fairly significant changes in strategy as initial ideas may not work out. MDF will have to regularly reflect on barriers to change. In some markets, the change process is likely to get stuck multiple times. When the change process gets stuck, it is important to dig into the reasons why – what underlying barriers may have been missed or have cropped up? It may be necessary to address more underlying barriers to help the change process get moving again.

MDF’s work ‘at the coal face’ with enterprises gives it a realistic and nuanced understanding of the enabling environment for business. This enables MDF to understand how the incentives for investment are shaped by the political economy and cultural drivers of doing business, as well as the formal articulation of policy, regulation and the legal and judicial expression of ‘rules of the game’. The credibility established by this understanding and the successful interventions on which it is based, creates a platform to work with the private sector and business associations on more challenging ventures, makes the program a valued source of advice, and in turn provides DFAT with a means to inform economic diplomacy and policy dialogue. (In Fiji, Pakistan and Timor Leste, where MDF has built credibility over time, big private sector players and/or government agencies are now seeking interaction with the program, and this is facilitating DFAT engagement on private sector development.)

3.2 Measuring, sharing and communicating systemic change

MDF’s results measurement processes strictly adhere to the DCED Standard for Results Measurement, and are regularly audited. Adherence to this standard ensures confidence that the reported results have direct and verifiable attribution/contribution pathways and that MDF continues to improve the quality of this data. The discipline of the DCED Standard has, however, resulted in a conservative approach to reporting results in which the only claims made are for changes where MDF’s attribution/contribution can be verified. But there are many situations where attribution/contribution is clouded by the messiness of the real world and the impossibility of determining what would have happened without the MDF interventions. (In this regard, MDF has much in common with programs that deal with economic policy and business enabling environment reforms: important changes that the

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programs support may be some distance, in market terms and in terms of time taken to generate effects, from the ultimate beneficiaries of change.)It is therefore important that MDF complements the documentation of rigorously established results with reporting of areas where there is a clear, but less verifiable likelihood of influence. Together with paying more attention to reporting on the qualitative aspect of change, and documenting MDF’s contribution to making markets grow and become more inclusive, this would help strengthen the profile and reputation of Market Systems Development approaches within DFAT.While DFAT is appropriately interested in what systemic changes achieve in terms of improved economic circumstances for the poor and excluded, it is important not to limit assessment of MDF’s success to consideration of the headline quantitative indicators of employment generated and additional incomes. These are far from an adequate reflection of the outcomes of the program. Clear articulation - and effective communication - of strategic focus and the progress that is being made within each SEA (including a specification of what changes in the market system have occurred, and what barriers to inclusive change have been addressed), will help reduce reliance on headline indicators.

3.3 Considerations for DFAT Program Managers

Markets are not mechanical constructs: they are the result of human actions, with all of the motivations that drive individual and collective behaviour. They are shaped by rules of the game, which may be underpinned by the coercive power of the state, of communities or of distinct groups within communities. They are subject to inherent market failures, and the incentives to which market actors respond can be distorted (or enhanced) by the behaviour of governments and the political and economic elites that influence government actions.

Managing programs that deal with markets is not like managing an engineering project. Rather, they are like programs that support economic governance reforms. Similar to these programs, market focused programs may have to make initial, heavy investments in analysis and diagnostic work, encounter false starts and drill dry wells, as well as establish credibility with stakeholders before they can push for serious change. And, as pointed out earlier, both types of program may act at some distance from the beneficiaries whose welfare is being targeted.

This paper has tried to shed some light on how MDF conceives of systemic change, and how its work is structured to bring it about. The lessons

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presented above are hopefully helpful to program managers as they come to grips with what is a complex and often slow-burning initiative.

Some specific suggestions for DFAT program managers follow. Make opportunities to learn from each other, particularly managers of

the more advanced programs: enrich program manager interactions with more learning opportunities that complement administrative/management conversations.

Ensure that each country team reports on systemic change across all domains, and not just at the intervention level, and ensure that reporting is about the nature or quality of change, and not just the effects in terms of jobs generated and incomes enhanced.– Recognise that the characteristics of ‘success’ may be very context

specific and will change over time as the program matures. A clear understanding of the various manifestations of successful systemic change will help with making assessments of program effectiveness.

– Ensure that results measurement and reporting of systemic change is used to inform reflection and decision making as well as accountability.

Engage in a formal way with MDF’s six-monthly assessments of progress – the cycle review – with an emphasis on understanding the progress of systemic change in each domain, and assessing what may need to be done to make further progress.

Make opportunities for immersion in team activities to get a deeper understanding of how the different interventions are developed, progressed monitored and evaluated. In particular, engage with MDF’s learning processes, so as to be able to understand the iterative learning, and where it is getting to in the Strategic Engagement Area. This will help with coming to grips with the transitions from exploratory mode to making changes happen.– Advisory Group visits provide an unparalleled opportunity for this

kind of engagement. Work with MDF to develop some process-type indicators to help with

making judgments about progress in the early stages of a country program. This could be built around progress against an agreed program of work.– The indicators could cover, for example: development of formats for

key tools, such as Intervention Guides, and processes for screening, selecting and negotiating with partners; establishment of functioning sector cycle meetings; conduct of staff capacity assessments; conduct and documentation of meetings with the private sector to

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gather information and identify potential partners; and initiation and conduct of analytical studies.

Recognise the investment that MDF has to make in people - especially since it correctly aims to use local expertise as much as possible - and the time this takes.

Encourage interaction between MDF and other programs that address impediments to inclusive growth. This may include programs that directly address attitudes towards exclusion, or that work on policy and governance reform. MDF’s appreciation of the ‘coal face’ can help programs targeting policy and the enabling environment to identify critical bottlenecks, and how policies and regulations are actually, rather than in-principle, implemented. In turn, long term sustainability of the improvements stimulated by MDF interventions, or socialisation and codification of systemic changes they have supported, may need to be supported through complementary initiatives undertaken by other programs.

Acknowledge that building essential credibility and reputation may take time. Be prepared for criticism in the early stages from parts of the business community that have yet to appreciate how MDF deploys money for strategic and systemic purposes, and not just as a means of helping selected enterprises.

Understand that while MDF can deliver results on cross-cutting issues of gender and disability, it can only make progress if there is a business case for increasing opportunities. MDF typically does not work with governments to mandate inclusion, and does not offer long-term subsidisation, so its initiatives have to be predicated on commercial viability. However, MDF staff should be able to articulate how issues, especially gender, fit into a systemic change pathway across all the domains where the program operates. And MDF needs to build the culture and approaches to engage with businesses on these matters, and the supporting processes and systems to report on and learn from conversations with the private sector on cross-cutting issues.