The global failure of communism in the twilight of the 20th century seemed to vindicate the champions of the free market – be they Chicago libertarians or Washington Consensus neoclassicists. However, even as command economies fell, the world came to witness new crises in the fledgling free markets. From the disastrous privatization of Bolivia’s natural resources to the violent upheavals in the former Soviet Union, capitalism and the free market failed time and time again to provide sufficient conditions for sustainable growth. The promised virtuous cycle of economic and social development often did not come to pass.

Moving past blind faith, economists have now come to realize that liberalization, deregulation and privatization by themselves cannot guarantee that a market will truly be functioning, free, and able to provide the social services necessary for sustainable development. A key ingredient for functioning markets to be able to deliver an environment conducive to development is a strong institutional framework, which many developing countries like Bangladesh lack. Into this abyss of institutional failure enters a new player – distinct from both the state and the traditional profit-seeking businessman – that provides the social services that governments currently may not be. This player is the social entrepreneur.

When governments fail to provide key public services, the business community - guided by the invisible hand of the market - often steps in to fill this void. However, as recognized by economic theory, the traditional entrepreneur is primarily motivated by private profit. Indeed, executive officers of limited companies are responsible, by law, to maximize the returns to their shareholders. That’s their bottom line.

What may differentiate the social entrepreneur from the traditional entrepreneur is the idea of a triple bottom line. While the traditional entrepreneur has only the objective of private profit to pursue, the social entrepreneur’s mandate is broader and includes the pursuit of private profit, social, and environmental objectives. Instead being beholden to just the interests of the shareholder, the social entrepreneur’s responsibility is towards stakeholders in the firm’s activities. Early last year, the UN’s International Council for Local Environmental Initiatives recognized the triple bottom line as the primary standard for full cost accounting in the public sector.

While Bangladesh can boast many virtues, a strong public sector delivering quality social services and a development-friendly institutional environment are not among them. In response, individual citizens and organizations – our social entrepreneurs – have stepped forward to create opportunities that promote sustainable development. Even though BRAC and the Grameen name are well recognized as massive social entrepreneurs, each with millions of stakeholders, there is a multitude of smaller initiatives throughout the country that are much lower profile and with smaller budgets, but doing equally important work. For example, since the 1990s, the Dhaka based organization Phulki has been active in the protection of the rights of female migrant workers, predominantly those employed by the garments industry. Among its many accomplishments has been the development of community-based daycares for the children of working women. Parallel to its advocacy and social work, Phulki provides paid services such as monitoring services for the Fair Labor Association and consulting for management of factory-based childcare services. It is safe to say that Phulki, as a lower profile organization, has done well, certainly achieving the dual objectives of profit and social development that define a social enterprise.

However, there are countless other small social enterprises in Bangladesh that have not been able to grow as much as BRAC, Grameen, or even Phulki. One commonly occurring constraint to their growth has been a lack of access to commercial sources of finance. Recognizing social entrepreneurs as valuable partners in sustainable development and aware of their financial needs, private organizations are in turn responding. Drishtipat has even broadened its activities to now sponsor an annual program – soon to be in its second year – called the Drishtipat Challenge. This program (formerly known as the DP 20K Challenge, among others) funds or supplements the funding of budding social entrepreneurs. The Challenge invites the general public to submit innovative proposals for social enterprises. After an initial screening, the successful proposals receive seed financing loans of up to US$5000. While it may seem a modest amount, small injections of funds like this may be all that are needed to kick-start the next great idea.

Social enterprises are by no means a silver bullet for the myriad developmental challenges that a country may face. However, in Bangladesh, where the institutional framework is not robust enough to provide the necessary social services needed for balanced socio-economic growth, the power of the free market can be an important ally in the struggle for sustainable development, providing positive benefits to the rest of society through advocacy, training, education, empowerment, and conservation among other things. Our country cannot afford to turn down any help it can get.