This report presents the findings of an evaluation of Sida’s management of the market systems development (MSD) approach. It aims to inform thinking on how Sida can best manage its growing portfolio of MSD programs. Beyond this, it provides insights relevant to Sida’s wider support to complex and adaptive programs. The evaluation identified several factors that affect Sida’s ability to ensure that conducive conditions are in place for effective MSD programs and good development programming more generally. Sida’s relatively flexible framework of rules, guidelines and systems for project management provide the space needed for staff to innovate and manage adaptively. But for this to happen consistently and effectively, Sida needs to invest more deliberately in building the capacity of its staff in relevant areas. In addition, leadership and incentives are key to shaping a culture of active experimentation and learning. This needs to be supported with clearer guidance for those involved in the design and appraisal of MSD projects; and strengthened oversight of project performance, including through adjustments to Sida’s contracts and funding agreements.

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