Public-private partnerships for development projects: what are they and what is their role?

Definitions

To begin questioning the role assumed by Public Private Partnerships (PPP) in the international development landscape and its impact on policy, one should be familiarized with its definition. As such, it involves discussions over the type of actors concerned and the level of authority they have in a global governance scenario. Nowadays, PPPs range from loose forms of cooperation to legally binding contracts for the implementation of specific projects.

Definition can be further complicated by the lack of a specific area of action: Partnerships can range from dealing with climate change, infrastructure projects, health, corporate social responsibility, disaster relief/humanitarian aid, and environmental protection.  In addition, the level of involvement varies according to partnership, theme, visibility of the project and actors involved.

Not all partnerships are continuous, some may happen for a short period of time, and that should not make them less legitimate. According to Börzel and Risse, from a public management perspective, PPP in a transnational scenario should be defined as “institutionalized cooperative relationships between public actors (both governments and international organizations) and private actors beyond the nation-state for governance purposes”. Such definition requires a further understanding of the idea of governance purposes, which ultimately situates this relationship as a subset of transnational relations in world politics.

Attention should be drawn into the definition of the actors as public or private. As a matter of legitimacy governments are perceived as public actors, and other actors such as non-governmental organizations or businesses as private ones. The United Nations applies the definition of PPP as “voluntary and collaborative relationships between various parties, both State and non-State, in which all participants agree to work together to achieve a common purpose or undertake a specific task and to share risks and responsibilities, resources and benefits”.

The international development agenda and the PPP

Seeing PPP as an expression of the engagement of non-state actors in authoritative decision-making can be portrayed as evidence of the enduring reconfiguration of influence in world politics. Conversely, there is no consensus on the level of engagement of private actors, their interests and actual contributions to the international development agenda.

As well, statistical evidence is either nonexistent or weak to analyze this evolution, and analysts resort to a general perception of the increasing number of partnerships that include non-state actors in development projects. The recent growth in the popularity of partnerships that involve private actors in the developing world is notable specially regarding the focus that has been given by multilateral bodies, such as the United Nations, at strengthening and providing political support to this kind of partnership. However, to which degree are these partnerships actually contributing to development projects is yet to be tackled.

When analyzing the PPP role in the development agenda, the sector that gets the most attention is the infrastructure PPP projects, possibly for being the most traditional sort of partnership and still being extensively used in many of the projects implemented by the BRIC countries in Africa, for instance.

There is certainly a considerable amount of money involved in these kinds of projects. In Europe alone, according to Blanc-Brude, long-term infrastructure partnerships have yielded more then a thousand contracts with revenue that surpasses US$300 billion, in the last fifteen years. That figure allows us only to wonder the size of contracts and revenue consequence of the Chinese actions in Africa.

However important this kind of analysis may be, evidence of its actual impact is weak, most studies being business cases made on an early stage of the project or before the signature of the contract, not to mention the lack of statistical evidence.  One of the key elements of the PPP relationship within development projects resides in the particularity each project represents. Therefore leading us to the incomplete and yet tautological affirmation that we should see thorough the results of each case in the pursuit of a broader picture.

Yet, other types of partnerships are in evidence as well. Within the 1992 United Nations Conference on the Environment and Development (UNCED), which argued in favor of the prevalent tendency to enlarge participation in the global governance by strengthening the interface between the state and non-state actors, these partnerships gained momentum in the international development agenda.

The development of the United Nations Global Compact in 1997 subsequently linked to the fulfillment of the Millennium Development Goals – MDG (issued in 2000) was the beginning of a series of international initiatives aimed at involving the private world in the development policy arena.

In 2002, a new boost was provided by the official recognition of a high number of PPP and multistakeholder initiatives as a result of the World Summit on Sustainable Development.  Moreover, the Good Practices for Achieving the MDG evidences a link between development policy and the inclusion of PPP on the development agenda. It comprises a high number of such partnerships as success case stories for the achievement of the MDGs.

A case in point: the role of PPP at the POETA project

Among these case stories, the Partnership in Opportunities for Employment through Technology in the Americas (POETA) Project, involving Microsoft as its largest donor, was appointed as contributing to achieve the first goal on eradicating extreme poverty and hunger, through its work on the target 1B of achieving full and productive employment and decent work for all, including women and young people.

POETA is an initiative of the Trust for the Americas (TFA), a non-profit international organization affiliated to the Organization of American States (OAS). The TFA is the organization responsible for managing the POETA project, through its ICT4D unit.

Seeing this project as a case in point, the analysis of its results has lead to the conclusion that the type of partnership has no influence in the outcome of the project. Nonetheless, the partnerships contribute to the expansion of the project as they provide the financial and human resources necessary, also giving legitimacy for its implementation, once involving a public actor or a governmental organization such as the OAS.

Moreover, the relationship among the actors leads to a higher level of transparency, as the results are made public. In this sense, the different interests involved have a positive impact on the project and it results on a win-win situation. Even so, this case cannot be perceived as a rule for the action of all partnerships.

After all, what is their role?

Whether PPP contribute positively or not to the outcome of development projects, their role in the expansion of such initiatives is fundamental as they provide these with much needed resources. The foremost reason for NGOs to seek and engage in PPP is the lack of financing available from governments. Multilateral organizations, such as the OAS or the UN, could arguable operate limitedly without resorting to these partnerships. However effective these partnerships may be perceived, they keep the development projects arena on the move.

This is a non-for-profit explanation

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