White Paper: Integrating the Market Systems Development and Graduation Approaches

The Graduation Approach (GA) has helped millions of households move out of extreme poverty by strengthening their resilience, livelihoods, and economic capacities. Yet lasting progress depends on more than household-level support—it also requires access to inclusive and well-functioning economic systems that continue to create opportunities long after projects have ended.

This White Paper explores how the Graduation Approach and Market Systems Development (MSD) can work together to create more sustainable pathways out of poverty. While the Graduation Approach equips people to participate in markets, MSD strengthens market systems, making them more inclusive, responsive, and resilient. Together, these complementary approaches can bridge immediate poverty reduction with long-term systemic change.

Drawing on practical experience from humanitarian, development, and peacebuilding programs across Africa, Asia, Latin America, and Europe, the paper argues that sustainable poverty reduction requires both resilient households and market systems capable of supporting long-term economic participation. The paper proposes a practical framework for integrating household-level support with systems of change, while emphasizing inclusion, social cohesion, conflict sensitivity, and resilience.

Discover how combining household-focused and systems-focused approaches can deliver more durable and inclusive development outcomes in our White Paper.

Why integrating the Graduation Approach and Markets Systems Development?

The integration of these two approaches is based on the premise that they are not competing alternatives but complementary strategies that address different dimensions of poverty and exclusion. Graduation prepares people for markets by strengthening household capabilities and resilience, while MSD ensures that markets are prepared for people by creating more inclusive, responsive, and sustainable economic systems. Together, they bridge the gap between household-level poverty reduction and long-term systemic change.  

How to integrate the Graduation Approach and Market Systems Development?

The white paper proposes three practical integration pathways, which will be presented and discussed during the webinar:  

1. Graduation as an Entry Point to Market Systems  
2. Designing MSD for Poor and Vulnerable Populations  
3. Integration by Design 

Which operational considerations and challenges arise when integrating Market Systems Development and the Graduation Approach?

Integrating the Graduation Approach and Market Systems Development raises interlocking challenges. "Market-readiness" is often misframed: vulnerable households already participate in markets, so the real constraints are risk-averse coping, low trust, and subsidy-driven dependency. Poorly designed interventions can distort thin markets, oversaturate weak value chains, or expose participants to exploitation. Underlying it all is the need for deliberate sequencing and market analysis so households don't graduate into markets that can't sustain them. Where private sector actors are limited or absent, a critical entry point is strengthening cooperation among market actors — focusing on how individuals and groups collaborate, build trust, share information, and overcome barriers to collective market participation.

Further information on our engagement

• Caritas engagement worldwide

• Our thematic papers on International Cooperation

• Caritas Switzerland (2021), Thematic Paper: The Graduation Approach in Migration Settings.

• Caritas Switzerland (2021), Thematic Paper: Applying systemic approaches to developing markets.

Get in contact with our experts on Migration and Income & Livelihoods

Co-authors, Contributors and Supporting Organizations

Header image: Promoting local organic products at a market in Cambodia © Nicolas Honoré