How to engage the private sector in development

By Kim Bettcher 30 July 2015

Office workers at a meeting in Ghana. How can public-private dialogue encourage businesses to help tackle global development challenges? Photo by: Arne Hoel / World Bank / CC BY-NC-ND

As the development agenda turns toward inclusive growth, participatory decision-making and innovative partnerships, the demand has grown for private sector participation in the discovery of viable solutions. One powerful tool for propelling this participation is public-private dialogue, a structured approach to inclusive policymaking. Public-private dialogue facilitates agreement on many vital goals, among them improving the business climate, raising competitiveness and sustaining growth.

Take Kenya, for example. Betty Maina, former CEO of the Kenya Association of Manufacturers, declares that “for more than 10 years, dialogue with government and all stakeholders has remained the pillar of our gains on behalf of our members.” Not only did public-private dialogue encourage a positive business environment in Kenya and regional integration, it also supported peace efforts following the disputed outcome of elections in 2007 and the ensuing violence. “Business was also instrumental in drafting and passage of the new constitution, which we gave ourselves in 2010 and continues to play a critical role in its implementation.”

Or consider the Ethiopian Public Private Consultative Forum, winner of the 2015 PPD Howard Award for long-standing achievement presented by the PPD Community of Practice. This consultative forum has advanced dialogue at federal and state levels on issues such as customs procedures, trade logistics, company registration and property rights protection. Tangible outcomes from this dialogue include a special credit window for small and medium enterprises and title deeds for more than 55,000 irregular and unprotected land holdings. Furthermore, the enthusiasm for dialogue in Ethiopia has done much to build trust between the public and private sector.

Public-private dialogue has proven to be a highly versatile tool for tackling development challenges. In fragile states, dialogue can revive private sector development and sustain policy reforms. Thus, the Nepal Business Forum played a role in building trust and prioritizing reforms in post-conflict Nepal. In a democratic transition, as occurring in Tunisia since 2011, dialogue can build consensus around how to manage the transition process. The National Dialogue in Tunisia produced a road map for social stability, which established the conditions for structural economic reforms.

At a sector level, dialogue can address issues of industry competitiveness and natural resource management. The Jordan Valley Water Forum coordinated responses by authorities and farmers to the water crisis in the region. Public-private dialogue can even be tailored to advance women’s economic empowerment, as shown by the winning entry from Bangladesh in the Global Partnership’s multistakeholder case study contest. The Bangladesh Women’s Chamber of Commerce and Industry promoted a Women’s National Business Agenda, which convinced the Central Bank to provide $93 million in loans to women-owned businesses.

So what exactly happens in the course of a dialogue process?

First, dialogue elevates policy priorities for creating a conducive investment climate and expanding markets. In Kenya, for instance, dialogue between business and government established collective leadership on economic liberalization, export promotion, regional integration and peace building. Second, dialogue gathers input from a wide range of interests. In doing so, it builds a constituency for reform among the business community. In Bangladesh, the Women’s National Business Agenda was the first advocacy campaign of its kind to give voice to the needs of women-owned businesses, and it connected with more than 180 organizations from all six geographic divisions of the country. Finally, structured dialogue improves the quality of legislation through analysis of evidence and incorporation of feedback into implementation of regulations. The Ethiopian consultative forum has done this through extensive investments in research and analysis, workshops to validate issues with the private sector, and technical committees to support the implementation of recommendations.

Although not a panacea, dialogue deserves attention from governments, business, donors and other development actors as a means toward credible and effective development cooperation. The tangible outcomes — in the form of cost savings to business — are real. More importantly, dialogue can kick-start policy reform and develop relationships that strengthen governance and economic performance. Especially in developing countries where institutions are weak and policy information is scarce, a coordinated dialogue opens a path to discovering and sustaining solutions. When done well, the legitimacy that accrues from dialogue is invaluable in preventing reversals of reforms.

The Global Partnership for Effective Development Cooperation has adopted the quality of public-private dialogue as one of its 10 monitoring indicators, by measuring the engagement and contribution of the private sector to development. While the indicator does not directly measure the business environment or private sector impact, it does capture the degree of private sector participation in policymaking and development partnerships. This indicator builds upon evaluation tools from an international community of practice and a charter of good practice.

Those policymakers and business leaders who now are ready to try dialogue can benefit from the wealth of experience accumulated by their peers around the world. When they reach out to their counterparts on the other side of the table, they are taking a big step toward the discovery of win-win solutions.

This article is shared in collaboration with the Global Partnership for Effective Development Cooperation. Read more expert comment at http://devcooperation.org

About the author

Kimbettcherphd
Kim Bettcher

Kim Bettcher leads the Center for International Private Enterprise’s knowledge management initiative, which captures lessons learned in democratic and economic institution-building around the world. Bettcher holds a Ph.D. in political science from Johns Hopkins University and a bachelor’s degree from Harvard College.


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