Measuring Market Resilience
Using an index to understand the durability of markets
A hallmark of iDE’s approach is a laser focus on market ecosystem creation. We believe that strengthening markets helps promote household resilience through income generation, improved food security and increased employment opportunities. But for the benefits of a stable and inclusive market to be sustainable in the long term, the market system itself needs to be able to withstand, react, and transform in the face of climate change, conflict and other shocks and stresses.
To measure and monitor the durability of markets, iDE has designed a world-first index. The Market System Resilience Index (MSRI) enables us to track the resilience of the wider market system, specifically in rural contexts, helping us better understand and adapt our market creation approach to local contexts. It also allows us to learn from what works across all of our country offices.
The MSRI is a user-friendly composite index, drawn from academic literature and iDE’s experience in market system strengthening. It accompanies our Infinite Model, which guides the way we create market ecosystems, ensuring they are competitive, resilient and inclusive. The MSRI is composed of 11 weighted determinants, broken into five categories. Each determinant is measured using a number of context-specific indicators and questions.
The index was piloted in north-east Bangladesh in 2018, an area impacted by flooding and climate change. As part of an ongoing program that aims to reduce undernutrition and stunting—low weight and height for age—in children under 2, the MSRI provided a score which indicated how resilient local markets were to monsoonal rains and flash floods.
Under the MSRI, scores range from 20 to 36 (“very weak”) to 85 to 100 (“very strong”). Markets that are able to adapt by, say, diversifying their agricultural activities, and absorb market shocks, score higher. Scores also provide a baseline for understanding the efficacy of programmatic activities and possible improvements.
As a result of the undernutrition interventions in Bangladesh, the local MSRI score improved by 15 points during the first phase of the nutrition-enhancing program. Since then the MSRI has been applied in other contexts, vulnerable to economic and climate shocks, and supported programming in Nepal, Cambodia and Mozambique.
Connect with iDE’s expert on Climate Resilience Measurement
Director, Climate, Resilience, and AgricultureJohn Choptiany, PhD
John has developed tools to measure climate resilience and leads iDE global programming addressing climate change. He welcomes your questions about how we select the determinants to measure community strength in the face of disasters.