Presentation to IDRC February 22 nd , 2013

1. Presentation to IDRCFebruary 22nd, 2013

2. Presentation Outline • Introduction • Methodology • Overview of donor strategies • Modalities for engaging with the private sector • Implementation considerations • Recommendations and future research • Knowledge mobilization • What next? • Questions and answers?

3. 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 1997 • Lack 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

4. 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.

5. Methodology (cont.) • Literature review January-July 2012 • Framework analysis • Restricted 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

6. 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

8. 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.)

9. 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)

10. 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!)

11. 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

13. 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

16. 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

18. 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

19. Implementation considerations • Which 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

20. Implementation considerations • Financial 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

21. Recommendations • Enhance tracking, disclosure and comparability of PS funding • Deepen and strengthen implementation of AE principles • Support democratic ownership of agenda • Develop common criteria for assessing which private sector to engage, including on PPPs • Establish indicators to ensure financial additionality and a monitoring framework • Demonstrate clear development additionality

22. Future research • Broader scoping of the range of financing tools donors are using to engage the private sector in development • How donor policies are being implemented in practice • Impact of these interventions • South-South cooperation and triangular cooperation in support of this

23. Knowledge mobilization • Broad distribution in Canada and globally • Pick-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

24. 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

25. Shannon KindorneyResearcherThe North-South Institute55 Murray Street, Suite 500Ottawa, Ontario CanadaK1N 5M3Tel.: (613) 244-3058Fax: (613) 241-7435Email/Courriel: skindornay@nsi-ins.caWebsite: www.nsi-ins.caThe 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 AnalystCanadian Council for International Co-operation450 Rideau Street, Suite 200Ottawa, Ontario CanadaK1N 5Z4Tel.: (613) 241-7007, ext. 306Fax: (613) 241-5302Email/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.