Presentation to IDRCPresentation to IDRCFebruary 22February 22ndnd, 2013, 2013

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: skindornay@nsi-ins.ca

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: freillyking@ccic.ca

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.