Structural Adjustment and Public Private Partnerships

1. Structural Adjustment and Public Private Partnerships The Impact of International Reforms on Domestic Policies

2. Overview of the Discussion International: Structural Adjustment in Practice- From Normative to Empirical Challenge Domestic: Public Private Partnerships in Pittsburgh and the World

3. Limited Government Assumptions and Administrative Reforms The Reagan Revolution and the New Orthodoxy

4. Reminder: The Source of the Reforms and the Bitterness • Reagan and Thatcher • Neo-Orthodoxy • 1983-1991- End of Cold War and Dismantling of the Soviet Union

6. Leftist Slogan- 1975 “Maggie Thatcher Milk Snatcher” Thatcher had served as Minister of Education in Tory Government and tried to end school lunches.

7. U.S. Reforms • Attack on Keynesian Economics • Rejection of Regulation, Fiscal Policy and Wage and Price Controls • U.S. Focus on Monetary Policy • Need for Budget Reduction (no deficit), and Balanced Budgets

8. Monetary Policy Control the Flow of Money into The economy (Interest Rates, Production of Money, and regulation of Reserves for Loans)

9. International Policy Reform: Review The Current State of Management of Policy Reform and Structural Adjustment a. IMF stabilization and trade liberalization b. Currency reform, auctions- end of subsidies (end urban privileges)

10. Two Icons of Neo-Orthodoxy • IMF • Milton Friedman

11. Policy Reforms c. Market prices for agriculture and industrial goods d. Deregulate the economy e. Most Importantly: Free Trade f. Administrative Reform: Privatization

13. Internationally: Privatization Redux Key: Conditionality- Privatization of the economy Bridging and sectoral loans and grants (THE CARROT) The major source of international involvement- Conditioned on privatization

14. Privatization "Privatization fights laziness, privatization fights poverty, privatization fights smuggling, and privatization fights unemployment.“ (Swahili)

15. Policy Reform-Conditionality Conditionality- World Bank and UNDP and the "Management" Team of Resident Ambassadors SAPs- Focus on Policy and Administrative Reforms in return for loan restructuring and foreign aid

16. Administrative Reforms Stabilization and Conditionality Requirements Public Sector Reform Targets

17. World Bank Targets

18. Administrative Reforms Reform of the bureaucracy a. The problem: Need for skills b. Individual international Consultants and Contractors work with investments and the service/commercial sector

19. Structural Adjustment Principles and Conditionality

20. Structural Adjustment Problem of debt: Considered a Third World Problem not a Problem for Developed Countries Jamaica- #1 (Signed in 1977) Impact: Donor monies drive the system in the degenerated state

21. Structural Adjustment Second World as new debtors- Chad vs. Russia a. Transitional States-Hungary vs. Mongolia b. Rise of Asia and trade blocks c. Crisis in Asia and their return to debt management

22. SAPs and Russian Oligarchy

23. Policy Reforms- Issues • Controversy: The receivership committee- The UN Resident Rep., theWorld Bank Representative and the IMF delegate plus resident ambassador committee • Structural Adjustment State looks like colonial antecedents. • Mildly Opposing views of many UNDP Representatives (The role of the Resident and Country Plans)

24. The Other World View of SAPS

25. U.S. (Domestic Policy in the 1990s): David Osborne and an alternative to Privatization

26. Reforms (according to Osborne) 1. Strategic Planning and Management (not incrementalism) 2. Deregulation 3. Performance Management 4. Merit Recruitment 5. Decentralization and Development of Local Government

27. Administrative Reforms 5. End of Corruption 6. “Reinventing Government”- end to hierarchy and intra-governmental competition 7. Rewards based on Performance  8. Intra-governmental Competition

29. U.S. Reforms: From Re-inventing Government to Public-Private Partnerships NGOs, Business and a streamlined state

30. Beyond Privatization • Public Private Partnerships

31. The Rhetoric

32. Public Private Partnerships: Domestic and International Contexts Defined: Partnerships (formal or informal) between: • Non-Governmental Organizations (NGOs), or Non-Profits • Community Based Organizations (CBOs), • Governments, • Donors (International and Private), • Private- Business Sector.

34. Public Private Partnerships: Origins a. Domestic Urban Coalitions- Coming out of Great Society b. International Donors- Way of Dealing with Umbrella Grants and implementation of development policies c. Accepting government or donor money means accepting donor principles

35. The 1964 Great Society Speech

36. Public Private Partnerships Public Private Relationships is a concept that grew out of efforts to “downsize” the role of government. They refer to relationships between the public sector, nonprofit and nongovernmental sector, and the private sector. PPPs have also be referred to as: Privatizing Government, Outsourcing, and Devolving Government. The most obvious outcome of PPP movement has the growth in the number of nonprofit/nongovernmental organizations that provide a wide range of public services.

37. Public Private Partnerships: The Use of Grants The idea is that by drawing upon the non-politicized interests of the nonprofit/ nongovernmental sector and the expertise and acumen of the private sector, public services can be provided more cost-effectively and efficiently and thus create better public value for taxpayers. Thus the desire to create better public value is the primary objective behind the PPP movement. The PPP movement joins together public management, the political neutrality of nonprofit/nongovernmental organizations and the ingenuity of free market forces.

38. What?

39. Public Private Partnerships The underlying rationale for Public Private Partnerships is the belief that 1. The nonprofit/nongovernmental sector is closer to the community and has a better sense of the needs of the community and thus can more cost-effectively apply resources and 2) The private sector is more efficient at responding to market forces because of private investment and than large public bureaucracies.

40. The Model

41. Public Private Partnerships Building PPPs brings the public, the nonprofit and non-governmental and the private sector together for a common purpose. PPPs involve a set of elements of political good will management:

42. Public Private Partnerships 1) building a climate of tolerance, active support or ongoing operational assistance for 2) a policy or overall strategy to achieve specific objectives among those outside the scope of those who have direct authority over the domain 3) but whose operational assistance is necessary to achieve the objective. Not Competitive at this stage

43. Public Private Partnerships 4. Comes out of Domestic Non-Profits and Block Grants 5. Internationally Moving Beyond Structural Adjustment and Policy Reform? f. Seen by some as an alternative to Contracting Out- Others as part of it g. Critics see it as detrimental to a market approach to economic change

44. Understanding the Public Sector of Allegheny County Allegheny County is made up of 130 townships and boroughs. Each of these has its own public manager and council. The city of Pittsburgh is part of this mix of local government. Operating Budget for the County for 2003 is $654 million. This budget provides for such services as: Children and Youth Services Jail/County Police Port Authority District attorney coroner

45. Demographics of Allegheny County • Total population 1,281,666 • 84% White • 12% African American • 1.7% Asian • 1% Hispanic • 1/10 of 1% Native American • 18% 65+ • 6% under 5 years old

46. Public Private Partnerships • Characteristics- a. Targeted at the expansion of Social Capital and Synergy in the promotion of Economic and Social Development   b. Seeks a holistic or Integrated Approach to Economic and Social Development   c. Involves informal processes, cultural sensitivities as well as legal norms and contracting principles.

47. Human Resources Development Commission, Allegany County Maryland

48. Public Private Partnerships (PPPs) • PPP Supporting Factors in the Domestic and International Context   1. Democratic Governance- private sector and NGOs seen as legitimate actors; transparency, accountability and responsiveness 2. Rational Government- Merit Principles, anti-corruption environment, acceptance of non-state actors as service deliverers. 3. Use of Contracting Out and Controlled Sub-Grants

50. Public Private Partnerships- Factors Factors that Support PPPs  3. Decentralization- Subsidiarity: Governance devolved to the lowest levels capable of implementation and contracting out 4. Legal Frameworks- Acceptance of Contractual Agreement as the basic organizational relationship