ISE’s Market Building Initiative (MBI) aims to provide a pragmatic, conceptually grounded basis of ideas for building markets and sustainable economic opportunities around the world. Drawing on both econometric evidence and highly contextualized examples of success, MBI looks at the appropriate role of government, firms, workers, and foreign entities both public and private in creating the tangible aspects of an enabling environment for growth, investment and job creation. ISE’s distinctive approach to market-building draws on the fundamentals of the market as an institution to define freedoms and constraints. ISE weds business administration concepts- such as value chains and supply chains–to mechanisms for risk assessment and risk management, financial architecture development, third party contracting, arbitration, and guarantee systems, among others. ISE aims to determine what works as well as what does not, and how to design, sequence, and implement concrete activities for integrated, balanced, whole-of-market growth.

MBI activities center on knowledge- building, policy and network development, capacity mobilization, implementation support, skills building, and convening and facilitation. The feature piece of the work program has been toolkits for market building- the active identification of best practices and effective tools for creating inclusive and sustainable growth. This study led to the creation of a knowledge bank of researched tools and mechanisms that have shown promise in various context or otherwise include innovative principles for durable, low-cost mobilization of private sector capital and assets. Featured tools include crop insurance, special economic zones, political risk insurance, and enterprise funds.

ISE provides country-level support to leaders and managers across civil society, government and business engaged in transition processes around the globe. Drawing on its “how to” knowledge from other cases and its sectoral know-how, ISE employees a distinctive in-country methodology for reading the context through participatory and analytic field methods, to provide a range of options for decision-makers that are tailored to context. Countries where ISE teams have been invited to assist with transition processes include: Burundi, Guinea Bissau, Haiti, Kosovo, Lebanon, Nepal, Pakistan, Sierra Leone, Somalia, South Sudan, Tajikistan.

A number of countries have accomplished transitions with varying degrees of success in recent decades. This series aims to explain, understand, and codify stories of transition. This comparative knowledge provides a basis for countries attempting transition to understand the drivers of success and their sequencing in a range of contexts that they might adapt for their own use. To perform this work, ISE developed methods for understanding patterns of national and sub-national transformation. The identification of patterns across transitions provides a knowledge basis to support the development of scenarios, the formulation of options, and the generation of sequenced strategies for leaders in difficult contexts who have the political will to change but do not always have an understanding of how to frame options or recognize the implications of critical decisions. The series includes experiences from Turkey, Finland, Chile, Spain, among others.

In an effort to fully understand the impact of international organizations in market and state building processes, ISE maps and analyzes current practices in fragile state environments to identify areas for improving practice. Institutions such as the African Development Bank, Inter-American Development Bank, World Bank, European Bank for Reconstruction and Development, African Union, and European Union have been examined in order to highlight similarities and differences and develop options for reform and transformation. Issues addressed include whether approaches to financing, operational policies and the practice of implementation fit the state building goal of the organization in these contexts and how priorities are arrived at in these contexts. ISE also analyzes the extent to which each organization has sufficient capacity to operate in fragile states and the right mix of skills in their staff to be effective within these contexts.

ISE has developed a sovereignty index to measure state-effectiveness and allow for precise diagnosis of the drivers or constraints of state capacity. Identification of key assets for building state effectiveness and an understanding of needs that still exist form a basis upon which the best allocation of resources can be channeled to build state functionality. ISE is in the process of developing a The Sovereignty Index™- a diagnostic tool for the objective and systematic measurement of a country’s capability or “sovereignty gap”- the gap between the de facto ability of a state to perform basic functions and the capacity presumed by the de jure sovereignty accorded to that state in international relations. The index is comprised of several indicators for each of the ten functions that a state ought to perform, ranked by the relative effectiveness of their institutions. The index allows for delineation of sub-functions of the state; cross-country comparisons of state effectiveness; and options for the aggregation, ranking, and mapping of data. Indicators are the best way to create consensus around both current national conditions and the necessary actions and resources for achieving mutual goals for national leadership and their stakeholders.

ISE brings together networks and organizations to further refine thinking on issues of state effectiveness, and supports training for managers and leaders of state transitions as well as their partners in bilateral and multi-lateral organizations. Working both in developing countries and with leaders of development, defense and diplomacy in OECD countries, ISE has developed linkages to a broad array of individuals and organizations which allows the Institute to function as a “network of networks”. The Institute connects leaders and practitioners with sources of expertise from a range of relevant countries and areas of practice, such as technology, security, political economy, and design.

ISE conducts training for a variety of such actors, including military and civilian officials preparing for deployment to a range of contexts; and the leadership and management teams across key organizations working at finding solutions for state fragility. ISE is also engages with a number of policy and strategy leaders as part of a dialogue to rethink how future generations are equipped with the appropriate range of skill sets for leadership, management and technical proficiency.

ISE engages with a diverse range of stakeholder groups and the public in general to learn from and inform the debate on development, transitions and stability.

See Media and Events for details of ISE’s engagement with the public and networks.