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Presentation Outline
IntroductionMethodologyOverview of donor strategiesModalities for engaging with the private sectorImplementation considerationsRecommendations and future researchKnowledge mobilizationWhat next?Questions and answers?
Introduction
Increasing focus on the private sector by OECD-DAC donors International Commitments
Declining aid budgets ODA in 2011 fell by 2.7% in real terms, breaking 14
years of real growth in aid since 1997Lack of comparative analysis
Initial mapping and exploratory assessment “[This research] helps fill a gaping hole in the aid
debate”, Erinch Sahan, Private Sector Policy Advisor, Oxfam GB
Methodology
Objectives: Survey key components of bilateral donor strategies
on the private sector; Examine the extent to which commonalities and
differences exist across various strategies; Assess how donors incorporate good development
practices (gender, sustainability, etc.) into their strategies; and
Identify examples of good practice based on findings.
Methodology (cont.)
Literature review January-July 2012Framework analysisRestricted to OECD DAC Donors policies,
including: Strategy papers, policy documents, web sites on growth
and the private sector, different tools Statements and public commitments Various ‘policy levels’ Links between growth, trade and poverty reduction, and
literature on growth Piloted on Sweden, UK and US:
Further expanded (beyond just PS), and refined themes and sub-themes
Methodology (cont.)
Limitations of the methodology Based on policies, not practice Confined to bilateral donors given lack of research on
them relative to extensive literature on multilateral donors
No statistical analysis conducted (so no comparison of donor allocations relative to respective normative frameworks)
Providers of South-South cooperation
Provide provisional baseline for traditional donors’ engagement
Overview of donor strategies
Policy Frameworks Broad and varied range and depth of strategies -
“themes” Generally provide guidance and direction (more than
programming) Engaging with the private sector
Promoting private sector development Partnering with the private sector for development
Different access points (cross-cutting themes, individual strategies, etc.)
Overview of donor strategies (cont.)Logic and assumptions on growth
Divergent views on the nexus between growth, development and poverty reduction
Growth patterns matter, and distinguish donors… Inequality, distributional impacts
US, EU, Ireland, France, Belgium Pro-poor growth
Switzerland, South Korea, Germany Green growth / ecological considerations
South Korea, Germany, Japan, US
…but not so much (entry points; aid exit, self-reliant state)
Overview of donor strategies (cont.)
Logic and assumptions on private sector Overall, private sector seen as engine of growth and dev’t
IN GENERAL: Private sector investment improved markets jobs increased incomes and revenue social programs
TWO APPROACHES: Partnering with the private sector for development versus supporting or promoting private sector development or both
BUT NEEDS different donor responses for each approach (form follows function!)
Overview of donor strategies (cont.)
Supporting the private sector: how much and where? Publicly available information lacking or incomplete Different ways of defining or reporting on private
sector and/or growth programming Understates amount of public finance going to private
sector (but also let’s not overstate how much!)
IN SUM: Lack of consistent, comparable and accessible data
Modalities for engaging with the PS
In general: Macro – business enabling environment
economic, legal and regulatory foundations, public financial management
Meso – making markets work market failures, competitiveness, market integration
Micro – investing in businesses and people technical and financial support, infrastructure, training,
thriving workforce, environmental sustainability
Looked at donor commitments and modalities
Modalities for engaging with the PS
Analysis of donor commitments Validated our findings in the “logic and assumptions”
about “promoting” and “partnering” approaches Typology to better understand approaches – market
solutions to growth and to development Ownership, environment, human rights, etc.
development “add-ons” Voluntary international CSR instead of binding
national legislation National legislation=enabling environment for
business Managing for results completely absent
Modalities for engaging with the PS
Analysis of modalities Macro level
National policy dialogues and planning Promotion of international CSR standards
Meso level Reflect partnership priority through use of PPPs,
challenge and innovation funds Linkages between national (donor) and domestic
(developing country) firms Micro level
Individual as employee, producer and consumer Skills building, access to finance tools, integration into
value chains
Implementation considerationsWhich private sector
Mixed, but strong bias in favour of own, especially for partnerships
Financial and development additionality (see over)Cross-cutting policies (gender, environment, labour)
Mixed implementation
International norms and standards Mixed implementation; not well integrated
Aid effectiveness principles? Unclear, but doesn’t look good Investing in markets vs. effective institutions Potential for fragmentation
Implementation considerationsFinancial additionality
Contributions should fill a necessary gap Assess financial need Promote investment in risk averse markets Gauge leverage potential of investment Encourage eligibility that favours domestic markets Assess opportunity cost
Development additionality Resources should work towards eradicating poverty
Clearly specific development outcome requirements of partnerships
More comprehensive and transparent indicators and monitoring framework
Recommendations1. Enhance tracking, disclosure and
comparability of PS funding2. Deepen and strengthen implementation of
AE principles3. Support democratic ownership of agenda4. Develop common criteria for assessing which
private sector to engage, including on PPPs5. Establish indicators to ensure financial
additionality and a monitoring framework6. Demonstrate clear development additionality
Future research
1. Broader scoping of the range of financing tools donors are using to engage the private sector in development
2. How donor policies are being implemented in practice
3. Impact of these interventions4. South-South cooperation and triangular
cooperation in support of this
Knowledge mobilization
Broad distribution in Canada and globallyPick-up by various blogs and sites
Duncan Green and Perspectives in Development & Evaluation
Attac, C4D, CONCORD, Development Gateway, Eurodad, ITUC, RoA, SD Cite, UNESCO IFAP, ECDPM
Op-ed in Vancouver Sun, Calgary Herald, Panel at CASID annual meeting in Victoria
Austrian Research Foundation for Int’l Dev’t and Canadian Journal of Development Studies
Meeting with CIDA
What next?
NSI current/future areas of research Private sector partnerships in development Canada, aid and the private sector Value and risks in private sector partnerships
CCIC current/future areas of research CCIC historical overview Mapping membership in terms of PS engagement,
lessons learned, and best practices Survey, terminology Potential tools
Shannon Kindorney
Researcher
The North-South Institute
55 Murray Street, Suite 500
Ottawa, Ontario Canada
K1N 5M3
Tel.: (613) 244-3058
Fax: (613) 241-7435
Email/Courriel: [email protected]
Website: www.nsi-ins.ca
The North-South Institute thanks the Canadian
International Development Agency for its core grant and
the International Development Research Centre for its
program and institutional support grant to NSI.
Thank you!Fraser Reilly-King
Policy Analyst
Canadian Council for International Co-operation
450 Rideau Street, Suite 200
Ottawa, Ontario Canada
K1N 5Z4
Tel.: (613) 241-7007, ext. 306
Fax: (613) 241-5302
Email/Courriel: [email protected]
Website: www.ccic.ca
The Canadian Council for International Co-operation
thanks the Canadian Partnership Program of the
International Development Research Centre for its
program and institutional support.