This working paper looks at why and how development financial institutions (DFIs) should support pioneering firms in fragile and conflict-affected states.

The role of ‘first movers’ in fragile states is critical: they grow and diversify markets in ways that no other firms do, generating disproportionate impact in terms of development and stability. But pioneer firms are rare in fragile states. This study documents their profile, their challenges, and the barriers which prevent them from realising their potential.

This working paper also explores the rationale and potential for DFIs to support them. The authors propose new ways to offset costs, risks, and the ‘unknown unknowns’ that generate radical uncertainty. Through a process of social learning, and resetting negative self-fulfilling investor narratives, DFIs can help pioneering firms shift the growth trajectory of fragile and conflict-affected states.

About the authors

Paul Collier, Blavatnik School of Government, University of Oxford

Neil Gregory, International Finance Corporation

Alexandros Ragoussis, International Finance Corporation