Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

EXECUTIVE SUMMARY

The overarching goal of the U.S. Government’s Global Food Security Strategy (GFSS) is to sustainably reduce global hunger, malnutrition, and poverty. Central to achieving these objectives is the existence of a competitive, inclusive, and resilient market that engages a variety of actors and ensures consistent availability and access to goods and services to all. How to design effective programs and policies that promote market systems that are growing, resilient, competitive, inclusive, nutritious, and sustainable requires developing a better conceptual understanding of the complexities of market systems and systemic change.

However, there remains a lack of agreement about how to understand and measure the systemic change in market system. There is diversity of views that has led to a variety of measurement approaches and tools made available for use by practitioners and implementers to measure systemic change. A recent review conducted by the Feed the Future Enabling Environment for Food Security Project summarized this diversity of approaches to measure systemic changes related to market- oriented interventions. This paper has a similar focus on the ‘measurement’ related learning question: How to measure market system performance? However, in addressing this question, this review goes beyond the literature reviewed by this previous report. It is generally focused on the economics and agricultural economics literature (the latter in turn has relied on concepts/theory borrowed from the industrial organization literature) and asks following question: what are the generally known, proven, and widely used measures of market performance by agricultural / marketing economists that can be applied to market systems performance in the FTF context?

The review suggests that there is a diversity of indicators, measurement approaches, and tools that researchers and practitioners have used to measure market performance. While some of these approaches focus on the performance of the market system in terms of the desired outcomes related to agricultural productivity, incomes, employment, and nutrition, other approaches focus on indicators that measure the structure and conduct of the market system and the actors in the system.

Based on the literature, the paper identifies several measures of market system performance and proposes them as potential indicators of systemic change in the context of FTF objectives of growth, efficiency, and sustainability; resilience; competitiveness; provision of nutritious food; consistent availability and access to goods and services; and inclusivity. Most of the proposed measures are well-tested and widely used by market economists. However, a few of the proposed measures are new and will require some piloting in a few countries. Also, operationalizing some of these proposed measures will require investment in data collection.