The Donor Committee for Enterprise Development (DCED) has commissioned Endeva to write a report on the risks of negative market distortions and possible solutions: Designing against and measuring distortions; crowding in other commercial players; involving competition agencies and experts; and publishing information.
How to minimize the risk of negative market distortion in private sector engagement of donors? Negative distortions may arise when donors confer market advantages to individual companies, such as financial
benefits, knowledge and networks. While private sector engagement strategies typically try to distort markets in positive ways to bring about pro-poor change, negative distortions may still arise if interventions are poorly designed or implemented.