ProjectMinimizing the risk of negative market distortions in private sector engagement

Project Context

Private sector engagement (PSE) refers to the interest of donors and others to work more strategically and systematically with business to achieve development results. One risk of such engagement refers to negative market distortions, which 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.

Project Objectives

DCED members have formed a Working Group on Private Sector Engagement, to support donors in the institutional changes needed to engage business as a strategic partner. In an initial step to explore ways to mitigate the risk of market distortions in PSE, the PSE Working Group has commissioned Endeva to produce a report. The report’s main contribution is to frame a very complex topic in a simplified and accessible way to raise awareness of risks and possible solutions.

Project results

The report looks at solutions to reduce risks of negative market distortion and can be accessed here.

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