Presentation to IDRC February 22 nd , 2013
Presentation Outline Introduction Methodology Overview of donor strategies Modalities for engaging with the private sector Implementation considerations Recommendations and future research Knowledge mobilization What 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 1997 Lack 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 2012 Framework analysis Restricted 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 considerations Which 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 considerations Financial 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
Recommendations Enhance tracking, disclosure and comparability of 1. PS funding 2. Deepen and strengthen implementation of AE principles Support democratic ownership of agenda 3. 4. Develop common criteria for assessing which private sector to engage, including on PPPs Establish indicators to ensure financial 5. additionality and a monitoring framework 6. Demonstrate clear development additionality
Future research Broader scoping of the range of financing tools 1. donors are using to engage the private sector in development 2. How donor policies are being implemented in practice Impact of these interventions 3. 4. South-South cooperation and triangular cooperation in support of this
Knowledge mobilization Broad distribution in Canada and globally Pick-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
Thank you! Fraser Reilly-King Shannon Kindorney Policy Analyst Researcher Canadian Council for International Co-operation The North-South Institute 450 Rideau Street, Suite 200 55 Murray Street, Suite 500 Ottawa, Ontario Canada Ottawa, Ontario Canada K1N 5Z4 K1N 5M3 Tel.: (613) 241-7007, ext. 306 Tel.: (613) 244-3058 Fax: (613) 241-5302 Fax: (613) 241-7435 Email/Courriel: freillyking@ccic.ca Email/Courriel: skindornay@nsi-ins.ca Website: www.ccic.ca Website: www.nsi-ins.ca The Canadian Council for International Co-operation The North-South Institute thanks the Canadian thanks the Canadian Partnership Program of the International Development Agency for its core grant and International Development Research Centre for its the International Development Research Centre for its program and institutional support. program and institutional support grant to NSI.
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