From Leveraging to Evolving: The Critical Shift in Market Systems Development

We all use the language. Our project proposals are filled with commitments to “leverage markets,” “catalyze value chains,” and “unlock private sector engagement.” It’s the accepted lexicon of modern economic development.

But let’s be honest: how often do these leveraged markets stay catalyzed after our projects end? How often is “systemic change” more of a buzzword in our Theories of Change than a tangible outcome in the communities we serve?

The problem might lie in a fundamental flaw in our mindset. We talk about “leveraging” markets as if they are static tools to be used. In reality, a market isn’t a tool; it’s a living, breathing system. It’s a complex web of relationships, incentives, information flows, and deeply held rules and norms.

When we see a market that is “stuck”—where smallholders remain poor despite being connected, or where innovation is absent—our first question shouldn’t be “How can we use this market?” but rather:

“What is this market system currently unable to do, and why?”

This shifts us from a mechanic’s mindset (fixing a broken part) to an ecologist’s mindset (understanding a whole ecosystem).

The Illusion of the "Busy" Market

A bustling marketplace can be deceptive. High activity doesn’t equal a functional, evolving system. Here’s the difference:

A "Busy" Market has surface-level activity: Transactions happen, but they are one-off. Value is simply redistributed, often from the less powerful to the more powerful. The system is fragile, collapsing when a shock hits or project support vanishes.

A "Functional" Market has depth and evolution: You see organic innovation, new actors profitably entering, and the system adapting to shocks. Genuine new value is created for everyone.

So, how do we move from the first to the second?

Shifting the Intervention Mindset

It requires moving from being the prime mover to being the strategic catalyst. Here’s what that looks like in practice:

Instead Of This (The Old Leverage Mindset)	Try This (The Evolutionary Mindset)
“We will link 5,000 farmers to buyers.”	“We will co-design a sustainable contractual model with buyers and farmers that reduces risk for both, making linkages outlive our project.”
“We will provide training and inputs.”	“We will stimulate local demand for business services and support local advisors to meet it, creating a self-sustaining service market.”
“The constraint is a lack of finance.”	“The root cause of the lack of finance is high risk. How can we change the information flows or collateral rules to make lending less risky for banks?”

The key is to diagnose the system across four planes: from the tangible Transactions all the way down to the intangible Rules, Norms, and Beliefs. A failure in one plane often creates a vicious cycle that traps the entire system.

For example: A lack of trust (a Rule/Norm) prevents formal contracts (Transactions), which keeps farmers fragmented (Relationships), which makes it unprofitable for banks to offer loans (Supporting Services). Injecting credit alone won’t fix this. You must first address the trust and information failures.

The Bottom Line

Our job isn’t to build the market ourselves. It’s to be a perceptive diagnostician, identify the most critical blockage in the system’s plumbing, and facilitate a repair. We don’t provide the water; we unblock the pipe so the system’s own energy can flow.

True “systemic change” isn’t when 10,000 farmers are reached. It’s when you see a new type of relationship, a new business model, or a new rule emerging that you didn’t create, only made possible.

#MarketSystemsDevelopment #SystemicChange #EconomicDevelopment #PrivateSectorEngagement #DoingDevelopmentDifferently #ValueChains