–Trial version for review, May 2021 —
The UK FCDO’s 2020 Technical Competency Framework on Private Sector Development specified key competencies to guide PSD advisors’ recruitment and professional development (2023 version here); these pages signpost recommended reading structured according to the 2020 competencies. These pages have no official status and are offered by the DCED as a resource for the PSD community.
On this page, you will find pointers on competency PSD 1: Economic development, inclusive growth and poverty reduction.
To send comments or suggested additions to the contents below, please contact the DCED Secretariat at Admin@enterprise-development.org.
Competency PSD1: Economic development, inclusive growth and poverty reduction
- Competency 1.1 – Analyse theory and evidence on the relationship between investment, economic growth and poverty reduction…
- Competency 1.2 – Explain the roles of public and private entities in economic development, investment and inclusive growth…
- Competency 1.3 – Analyse the context and factors which have an impact on economic development, economic participation and exclusion (especially women), and inclusive growth and poverty reduction…
- Competency 1.4 – Advise on the design, management and M&E of economic development programmes and policies that promote inclusive and low carbon growth…
Effective economic development policies and programmes need to build on sound analysis of the opportunities and constraints facing the private sector. They should combine evidence from global research with a deep understanding of specific geographical and sectoral contexts. Lessons from FCDO’s experience with combining central research and country diagnostics to promote economic transformation are summarised in the ICAI review of DFID’s approach to supporting inclusive growth in Africa, 2017.
Policy and programme design also need to align with the strategic priorities of the main stakeholder groups. Traditionally, economic development initiatives have prioritised job and income generation in developing countries. However, there is growing focus on moving away from the traditional ‘donor-recipient’ relationship to mobilising a wider range of grant, investment and partnership mechanisms to facilitate mutually beneficial collaborations. This requires donor agencies to work more flexibly with a wider range of partners.
For detailed lessons and guidelines on how to design and implement different types of economic development programmes, please refer to:
- DCED Knowledge Portal on PSD
- Towards private sector led growth: lessons of experience (AfDB & Norad, 2016)
- Private sector development in countries progressing from poverty (DFID, 2016)
For donor experience with PSD programming, including specific themes such as business environment reform and market systems development, visit the DCED website on evaluations of agencies’ PSD work.
Specific insights into how to incorporate gender-related risks into design and monitoring, refer to the DCED paper on Integrating gender and WEE into PSD programming (DCED 2017).
Regardless of the specific economic development approach, adaptive management of programmes is often considered as an important success factor. Key resources include: Key principles of adaptive management (ILO, 2016); advice on how to procure adaptive programmes (BEAM Exchange, 2020); a working paper on adaptive management for donor projects (Teskey and Tyrrel, 2021); and case studies on using results for adaptive management (DCED website).
The OECD defines inclusive growth as ‘economic growth that creates opportunities for all groups of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society’ (OECD, 2018). Where this is not the case, increasing inequalities can reduce economic performance and undermine social cohesion. Growing globalisation and digitalisation may limit the efficacy of national policies for inclusive growth and emphasise the importance of international collaboration.
- Inclusive growth: Building up a concept, IPC-IG, 2013
- Making inclusive growth happen, OECD, 2014
- Digitalisation and PSD, DCED, 2020
Low carbon growth is increasingly seen as the only way to slow down global warming and limit the worst impacts of climate change such as extreme weather events, food insecurity and biodiversity loss. Investing in green technologies and helping developing countries adapt to the changing climate can drive job creation and more resilient economic development.
- World Bank’s second climate action plan, World Bank 2021
- Inclusive and green growth in developing countries, K4D, 2018
- Low-carbon development in sub-Saharan Africa, ODI, 2015
Additional resources for PSD practitioners can be found on the DCED website on green growth.
Specific insights into how to incorporate women’s economic empowerment objectives into design and monitoring are summarised in the DCED paper on Integrating gender and WEE into PSD programming (DCED 2017). The VAWG helpdesk offers specialist research, analysis and advice related to violence against women and girls in development policy and programming.
The FCDO has issued enhanced general safeguarding due diligence guidance for external partners (FCDO, 2020) as well as specific guidance on child safeguarding (FCDO, 2020). The BOND network of UK organisations in international development has a dedicated website with resources on safeguarding policies and practice.
For a practical monitoring framework applied by many market systems programmes in particular, review the documentation around the DCED Standard for Results Measurement – including an introductory video (see below). Note that the term ‘M&E’ may not be helpful, as it conflates two functions: monitoring (performed as a core management function) and evaluation (which is necessarily external).