Inclusive Markets

Markets are the means through which people participate in economic activity. They can do so as producers (farmers, entrepreneurs), as providers of labour (employees) and as consumers of goods and services. When markets operate in an inclusive manner, they serve all participants, including the poor, by offering them the things they need to increase their incomes and meet their consumption needs jobs, new opportunities to earn income, access to assets to improve their livelihoods, products to consume that they can afford. Markets thus provide people with the means to contribute to and benefit from the growth process. Conversely, where markets exclude or disadvantage people, especially the poor, they have fewer chances to participate in and benefit from economic growth. As opposed to the assumption in classical economics that the conditions for perfect competition exist in all markets, in real life, and especially in the developing countries, markets often fail to function in either an efficient or inclusive manner. This may be due to a wide variety of reasons. Some of these are intrinsic to the functioning of markets themselves (market failures) . Others are caused by government failing to discharge its role of ensuring an enabling environment and setting appropriate rules for markets to function, providing the infrastructure and other public goods needed and to correct for market failures (government failure). When markets fail, market opportunities are frequently captured by the privileged few rather than open to the many, based on their talent and abilities, thus undermining growth. Moreover, when markets fail, their outcomes are often determined by power and wealth, disadvantaging the poor in participating in and benefiting from the growth process . MMW4P/M4P provides a framework that can help to improve the functioning of markets and the fairness of their outcomes.

Note: MMW4P- making markets works for the poor

For more reading follow the link herewith:

 http://www.value-chains.org/dyn/bds/docs/685/M4P%20paper3.pdf