x

Public-private partnerships – are we missing the point?

BrokeringDevelopmentCoverImage.jpg

Whether you like them or dislike them, public-private partnerships (PPPs) are talked about … a lot. From the World Bank’s PPP Knowledge Lab to USAID’s Global Development Alliances to the UN-backed International Forum for PPPs for Sustainable Development they have become a pervasive aspect of development programming. But work I have recently done on public-private partnerships in agricultural value chains makes me wonder if we really understand PPPs in the development sector and what it takes to make them work?

When I started the work two years ago, I set out five hypotheses of success factors for PPPs, based on my reading of what had been published on partnerships so far and discussions with practitioners. These were: a clear public good aim linked to national policy; clear and transparent roles and objectives of partners; sufficient resources for management and process; flexibility in implementation and brokerage. I promised to review how these hypotheses stacked up against the evidence from four in-depth case studies that we were developing with the International Fund for Agricultural Development (IFAD), based on PPPs in Ghana, Indonesia, Rwanda and Uganda that had been developed through IFAD-funded projects.

My assessment? I’d say it was about 50:50 the degree to which these hypotheses were supported. Whether this gap lies in the development sector’s understanding of PPPs or my interpretation of their experiences is up for debate – it’s almost certainly a combination. But it is worth setting out where these gaps lie.

 

Hypothesis

Result?

Analysis

Clear public good aim linked to national policy

Partly supported

A clear rationale is important – what is the constraint and how will working with the private sector overcome it? But the research found that it was equally important to understand and test the assumptions behind this rationale. Unrealistic targets and unfounded assumptions are a common problem.

 

Clear and transparent roles and objectives

Not supported

In an ideal world, partners would be clear and transparent but there are often strategic reasons for non-transparency, especially in new partnerships where trust still needs to be built. More realistic is identifying a joint goal where incentives align, such that everyone has ‘skin in the game’.

 

Sufficient resources for management and process

Partly supported

Sufficient resources are important. But what emerged from the research, at least in the context of agricultural value chains, was the risk that resources invested in fostering a successful PPP may produce arrangements that cannot be sustained in the long term.

 

Flexibility in implementation

Supported

The complexity of agricultural markets mean that unforeseen challenges often arise. Unpredicted outcomes are not undesirable or indicative of failure. But mechanisms for ongoing monitoring, communication and negotiation between partners are needed.

 

Brokerage

Largely supported

Brokerage played an important role across the cases – introducing partners not used to working together, building trust and maintaining effectiveness. However, there is a risk of dependency on brokers that needs to be recognised and addressed.

 

In addition, the general PPP guidance that is available misses three aspects particular to PPPs in agricultural value chains. What makes agricultural value chain PPPs unique is that they are public-private relationships but are intended to engender a private-private relationship (between farmers and companies). To do so with development benefits they need to reflect both power relations and risk in these value chains, since otherwise the weakest actors (normally the farmers) will bear a disproportionate share of the risk. The arrangements also need to ensure that the value chain offers a clear market ‘pull’ for the crops being produced. Most importantly, the role of farmers is vital for the success of these partnerships, which depend not only on governments and companies, but on the commitments and activities of farmers. Collectively, we need to move beyond thinking of public-private and see these as PPPPs or ‘public-private-producer’ partnerships.

As the complexity of the development challenge (and our understanding of it) rises, I feel that partnerships of different forms are here to stay. So we need to get better at making them work. This will mean taking risks and making mistakes, but also learning and adapting as we go.

 

This post is a part of the May 2016 series on Partnerships delivering inclusive businesses. View the whole series for more business examples, research and insights on partnering for impact.

Leave a Reply