There is plenty of talk about public-private partnerships, but in all of that, it’s possible to lose track of what they are and what role they can play in how foreign aid and development projects are implemented.
Cross-sector cooperation may have seemed improbable in the past but is becoming a standard approach to tackling development challenges.
So what exactly are PPPs? Where did they come from and what’s so special about them? Is this another development fad, or will it continue to evolve, and how?
Here are seven must-reads about PPPs that tackle some of those questions:
“The Future of Public-Private Partnerships: Strengthening a Powerful Instrument for Global Development”
By Daniel F. Runde, Amasia Zargarian (Center for Strategic and International Studies, October 2013, 6 pages)
This brief, expert commentary from CSIS provides insight into both the current state of PPPs, and the future of partnerships as an increasingly accepted and sought-after approach to development.
Runde and Zargarian explain the landscape of PPPs by first defining partnerships, then giving an overview of the key players and roles of each sector, and finally transitioning into the ongoing challenges and successes in partnerships.
The brief also spotlights two critical components of successful PPP development: managing risk and measuring impact.
The authors’ view on the destined role of PPPs, as noted in the title, is clear: “Partnerships are not meant to supplant traditional aid,” but they represent a powerful instrument in the modern era of development, and should complement the role that official development assistance still plays.
The Convergence Continuum: Towards a “4th sector” in global development?
By Gib Bulloch and Louise James (Accenture, September 2014, 17 pages)
“As the opportunities for cross-sector cooperation multiply, we believe we are approaching a tipping point where the creation of an entirely new business ecosystem, or fourth sector, becomes an increasingly interesting option for more and more participants.”
In this 2014 report from Accenture, the writers define and evaluate the “convergence continuum” and the foreseen emergence of the so-called fourth sector. The convergence continuum is a spectrum representing the evolution of multisector collaboration in international development. It is predicted that the continuum will lead to the creation of a completely new collaborative space, the fourth sector, which would blend — or converge — the competencies of the three existing sectors and maximize impact and innovation for development challenges. The spectrum includes four stages ranging from a basic level to the most complex level of converged interests:
1. Basic or small-scale partnerships. a form of operation between two or more organizations that share objectives and goals, or a commitment to “shared value.”
2. Multistakeholder coalition: a grouping of civil society, the private sector, the public sector and other stakeholders that come together for a common purpose.
3. Issue-based platforms: the evolution of a joint solution that addresses a specific development and business need and provides a holistic, longer term view.
4. Fourth sector: a collaborative ecosystem, or marketplace, for positive societal or development outcomes driving innovation, entrepreneurship, collaboration and scale
The continuum is also expected to pave the way for new partnership opportunities, including hybrid business models, private-private partnerships and social intrapreneurs.
“Foreign Assistance: Public-Private Partnerships (PPPs)”
By Marian L. Lawson (Congressional Research Service, October 2013, 18 pages)
In this congressional report, Lawson chronicles the evolution of private sector involvement in U.S. foreign assistance programs during recent decades. While the intended audience is clear, this straightforward report is also a practical read for anyone interested in establishing a baseline of PPP knowledge, particularly as it pertains to the U.S. government’s development work.
The report begins with a brief history of private sector engagement models used in U.S. foreign aid policies and then touches on how globalization has contributed to the dramatic shift in financial flows to developing countries. In the early 1990s, ODA — finance from government — made up the bulk of financial flows. By 2010, however, ODA only accounted for 9 percent, while the rest was attributed to private capital flows and philanthropy.
Among government agencies, the U.S. Agency for International Development was highlighted for taking an early lead on PPPs with the establishment of the Global Development Alliance secretariat in 2001. It has since evolved into the global partnerships division and has facilitated USAID’s participation in at least 1,500 partnerships, with more than 3,000 distinct partners.
For those wanting to get straight to the good, the bad and the congressional interests, scroll to the second half of the report where Lawson lists potential benefits and potential concerns about PPPs.
Some of the potential benefits include increased sustainability of development activities, market access and cutting-edge business practices. The concerns listed include management burdens, inadequate evidence of value added and “bad bedfellows” or private sector entities that could damage the reputation of the United States.
“Reimagining the Role of the Private Sector in Development”
By Homi Kharas (Brookings Institution, September 2013, 8 pages)
We now know that the private sector is both willing and able to contribute to sustainable development. The question is: How do businesses effectively engage with the public sector to address development challenges? In this brief, Kharas calls for the private sector to systematize their approach to sustainable development by focusing forthcoming partnerships in three key areas:
1. Mobilizing long-term private finance for sustainable development.
2. Generating more innovation in technologies and business models.
3. Building mechanisms to hold the private sector accountable for development results.
One point mentioned in the final section of the report was that it was time to put aside the debate on whether the public sector or the private sector is better equipped to contribute to poverty reduction. Both sectors should recognize that the answer is to act together, and that neither can achieve sustainable solutions without the other.
The new generation of international development has introduced an unprecedented level of collective action in the form of multistakeholder partner organizations or “hypercollective” partnerships. The majority of these partnerships have been established to address a specific issue or challenge such as major infectious diseases, primary education or nutrition.
The governing bodies of these partnership organizations are often comprised of more than 20 to 40 members, representing every sector. Yet, despite the diverse and inclusive constituency of these boards, many observers have questioned whether the complex, and diluted management approach of the large governing body is truly conducive to aid effectiveness. Surprisingly, there has been little to no study on governance best practices — until now.
In this policy paper, Bezanson and Isenman examine the performance and effectiveness of partnership governance through a comparative review of four studies on hypercollective partnerships and a metareview of 11 existing partnership organizations. The metareview reports the results of independent evaluations conducted for each of the 11 organizations, including Gavi, the Vaccine Alliance, the Global Partnership for Education and the Consultative Group to Assist the Poor.
The report concludes with nine lessons learned on governance good practice, based on the findings from the comparative study and the metareview.
“Creating New Models: Innovative Public-Private Partnerships for Inclusive Development in Latin America”
By: Marisol Argueta de Barillas, Fernando J. Gómez (World Economic Forum, April 2014, 68 pages)
Now that PPPs are becoming a more commonly accepted model for sustainable development, what now defines an “innovative” PPP? Argueta de Barillas and Gómez from the WEF have provided a report featuring a selection of successful case studies that embody innovative PPPs.
Latin America is a socially dynamic region currently benefiting from economic expansion, job growth, a growing middle class and social progress. On the other hand, the region is also facing major challenges, such as the worst income distribution in the world, unequal access to education, and climate change, to name a few. These development challenges mean that Latin America must search for innovative solutions to goods and services beyond what is traditionally provided by the public sector. For this reason, the region is a particularly opportune location to identify a wealth of innovative PPPs.
The 15 initiatives surrounding education, health, gender equality and environmental sustainability, were selected as case studies based on a robust set of conditions and criteria, including:
● Impact: having tangible impact in its target area.
● Innovation: implementing a new or non-conventional model in that field.
● Diversity: engaging nonconventional stakeholders.
● Transferability and reach: using a portable model that addresses challenges affecting the region.
● Authenticity: actively involving both the public and private sectors, and having clearly identifiable benefits.
Interestingly, while many PPPs continue to shift away from the state acting as a key player, a defining characteristic of innovative PPPs is that the state maintains a vital role at the core of these initiatives by providing incentives and regulatory frameworks for the provision of quality goods and services. Key success factors and policy recommendations can be found toward the end of the report.
And of course, a critical older paper that has helped defined the field is:
“Creating Shared Value”
By Michael Porter and Mark Kramer (Harvard Business Review, January to February 2011, 17 pages)
If you haven’t already read Porter and Kramer’s cornerstone article on why companies should seek to solve social problems through their core business processes, you are missing out. Porter, a prominent Harvard Business School professor, and Kramer, founder of nonprofit consulting firm FSG, argue that firms must escape outdated value creation strategies and narrowly focused “corporate social responsibility” initiatives.
They contend that the source of future corporate growth and innovation “involves creating economic value in a way that also creates value for society by addressing its needs and challenges” and that this work is best done in collaboration with value-focused NGOs and government agencies. Creating shared value provides the intellectual foundation your company needs to engage in PPPs and will help you make the business case to your company’s leadership.
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