Market Systems Development in the Cities of Rapidly Urbanising Countries

Abstract

Donors are increasingly prioritising programmes that support economic transformation in the rapidly growing cities of the developing world, including programmes using market systems approaches, such as the Kuza Project in Kenya. While the core principles of market systems development are applicable to urban and rural contexts, with a few notable exceptions, practical experience of urban programme design in market systems development, has been limited. The aim of this paper is to offer guidelines for those in the market systems community interested in working in urban settings, by exploring the key features that makes cities unique and the implications these features have for programmes using a market systems approach. Section 2 examines two key aspects that make urban systems unique (agglomeration and the urban land nexus). In section 3 we draw out insights on the working of cities as complex systems. In section 4, we discuss challenges and opportunities for market systems interventions in cities, focusing on the urban informal economy and informal settlements, whose market operations are particularly critical to poor groups. Finally, section 5 presents rules of thumb to guide practitioners and donors when using market systems approaches in urban contexts.