Blog by Sebastian Große-Puppendahl (ECDPM): PPPs for development: from principles to practice?

Need to readily embrace the complexity and diversity of PPPs, and focus on how to translate broad principles into operational tools

Recently ECDPM was invited to contribute to two workshops on the role of public-private finance and multi-stakeholder partnerships for development. One was organised by World Vision Brussels under the title ‘Emerging trends in EU development finance and private sector partnerships­ – what are the implications for development NGOs?’ and the other one by the European Policy Centre (EPC) jointly with Oxfam International on the theme ‘Lifting people out of poverty – Can public-private finance truly deliver?’.

Representatives from NGOs, CSOs, think tanks, EU member states, the European Parliament and EC officials came together to discuss some of the challenges and opportunities for public-private finance and its potential to deliver on development objectives.

Let’s avoid oversimplification

What sometimes surprises me in all these talks, is how often complexity is set aside for the sake of driving a simple message home. For instance,  all too often people refer to the private sector and the public-private partnerships, as if they are all the same and uniform. There is however a great diversity of businesses and partnerships and hence the urgent need to better understand the different forms of partnerships that exist. The objectives, interpretations, practices and incentives of the range of public and private actors are also diverse, as we have argued here, which leads to key questions such as who is leading whom and under what circumstances? Additionally, there are good examples provided by the private sector, which the EU and its member states can learn from, while at the same time thinking about new ways of making those business activities more development-friendly and inclusive.

Another tendency is to jump too easily to conclusions and make sweeping statements. For instance, one failed experience among many PPPs – as for instance the Lesotho PPP in the health sector according to Oxfam – does not mean that all other public-private cooperation initiatives are useless or doomed to fail right from the start. Similarly, a failed purely publicly funded aid project does also not lead to dismiss all grant supported projects. The issue rather seems that both public and private actors need to harness the lessons learnt to do better in the future based on effectiveness criteria and defined principles.

Addressing key challenges

More interesting was the discussion on how to better address systemic challenges in public-private cooperation. A set of challenges relate to the use of scarce public funding to leverage private finance for development. These range from result measurement to the need to show development impact and the issue of additionality, so that the project or activity would not have been kicked off without the addition of public funding. One of the examples that development impact was not satisfying is the in 2014 suspended Danida Business Partnerships Programme, as an independent evaluation concluded that “the effect on job creation and sustainable growth in developing countries has not been sufficient”.

At the EPC event, Oxfam presented the outcome of some preliminary research (undertaken together with CAFOD, ActionAid, EURODAD and WWF) on a principled approach to public-private finance for delivering sustainable development. The aim is to propose “a set of principles to assist governments to apply best practice, international standards and learning more systematically to help ensure best outcomes for sustainable development”, when working with the private sector (finance).

Read the rest of Sebastian Große-Puppendahl’s blog post here.