Following the Fourth High Level Forum on Aid (HLF-4) held in Busan in 2011, there has been increasing emphasis on public-private dialogues (PPDs), where “consultation with the private sector in the elaboration of national and sector plans is seen as a prerequisite for broadening country ownership of the development process” (Herzberg and Nicod 2013). PPDs come in many forms: they can be structured or ad hoc, formal or informal, and wide-ranging or focused on specific issues (Herzberg and Wright 2013). The main potential benefits of PPDs are seen to be:
- facilitating investment climate reforms by supporting champions for reform, creating momentum and accelerating the reform process;
- promoting better diagnosis of investment climate problems and design of policy reforms;
- making policy reforms easier to implement;
- promoting transparency and good governance;
- building an atmosphere of mutual trust and understanding between the public and private sectors (Herzberg and Wright 2013).
The literature suggests that PPDs, when done well, can give stakeholders a voice which they otherwise would not have, and give governments a sounding board which can improve the quality of policy-making (Herzberg and Wright 2013). The national competitiveness council in Colombia has been one of the most active and effective instances of national level PPDs (Eslava, Meléndez, and Perry, 2014). Created in 2006 by the government of Álvaro Uribe, the council elicited active participation by business through a special organisation created by business, the CPC (Consejo Privado de Competitividad). The CPC was an innovative organisation with a broad membership by both large firms—national and MNCs—and major associations, and directed by a small executive committee that worked closely with government, and whose decisions and strategies were ratified periodically by the larger organisation (Schneider 2013). However, if PPDs are not sufficiently transparent and broad-based, they can reinforce vested interests and create incentives for rent-seeking behaviour (te Velde 2013).
Charter for good practice in using public–private dialogue for private sector development
PRINCIPLE I: MANDATE AND INSTITUTIONAL ALIGNMENT
A statement of objective is helpful for clarity. A formal or legal mandate can be an important help in some political and economic contexts, but mandates are never sufficient to establish good Public–Private Dialogue (PPD). Wherever hosted and whenever possible, PPD should be aligned with existing institutions to maximise the institutional potential and minimise friction.
PRINCIPLE II: STRUCTURE AND PARTICIPATION
PPD’s structure should be manageable while flexible, enable participation to be both balanced and effective, and reflect the local private sector context.
PRINCIPLE III: CHAMPIONS
It is difficult to sustain dialogue without champions from both the public and private sectors, who invest in the process and drive it forward.
PRINCIPLE IV: FACILITATOR
A facilitator who commands the respect of stakeholders can greatly improve the prospects of PPD.
PRINCIPLE V: OUTPUTS
Outputs can take the shape of structure and process outputs, analytical outputs or recommendations. All should contribute to agreed private sector development outcomes.
PRINCIPLE VI: OUTREACH AND COMMUNICATIONS
Enabling communication of a shared vision and understanding through the development of a common language is essential for building trust among stakeholders.
PRINCIPLE VII: MONITORING & EVALUATION
Monitoring and evaluation is an effective tool to manage the public private dialogue process and to demonstrate its purpose and performance.
PRINCIPLE VIII: SUB-NATIONAL
Public–private dialogue is desirable at all levels of decision-making, fromthe most local possible level, especially as this is likely to be more practically capable of involving micro-entrepreneurs, SMEs and other local stakeholders.
PRINCIPLE IX: SECTOR-SPECIFIC
Sector-specific or issue-specific public–private dialogues should be encouraged because they provide more focus, greater incentive to collaborate, and more opportunity for action.
PRINCIPLE X: INTERNATIONAL ROLE
Broad and inclusive public–private dialogue can effectively represent and promote national and regional interests of both public and private actors in international negotiations and international dialogue processes.
PRINCIPLE XI: POST-CONFLICT / CRISIS-RECOVERY / RECONCILIATION
Public–private dialogue is particularly valuable in post-conflict and crisis environments – including post-natural disaster – to consolidate peace and rebuild the economy through private sector development.
PRINCIPLE XII: DEVELOPMENT PARTNERS
Public–private dialogue initiatives can benefit from the input and support of donors (development partners) when their role is determined by the local context, demand-driven, and based on partnership, coordination and additionality.
Source: Herzberg and Wright 2013
- A similar point can be made about other forms of state-business interactions such as Presidential Investor Advisory Councils and Investment Promotion Agencies.
- Eslava, M., Meléndez, M., & Perry, G. (2014). Public-private collaboration on productive development policies in Colombia. Washington, DC: Inter-American Development Bank. See document online
- Herzberg, B. & Nicod, M. (2013). Monitoring framework – Indicator on private sector engagement and contribution to development. Paris and New York: Global Partnership for Effective Development Cooperation.
- Herzberg, B. & Wright, A. (2013). The PPD Handbook. Public-Private Dialogue. See document online
- Schneider, B. R. (2013). Institutions for effective business-government relations (IDB Working Paper no. 418). New York: Inter-American Development Bank. See document online
- Te Velde, D. W. (2013). Introduction and overview. In D. W. te Velde (Ed.), State-business relations and industrial policy: current policy and research debates. London: ESRC DFID Growth Research Programme. See document online