Tuesday, 15 October 2013

Public-private partnerships in Africa: presumptions

The dismissal last week of Malawi's entire cabinet (following a procurement fraud scandal) is easily dismissed as yet another corruption headline. But it also provides a hook for a little-mentioned aspect of public-private partnerships (PPPs) -- among the most fashionable concepts and phrases in current African economic and social development.

Although there is a strong scent of doubtful panacea about PPP-talk and often little precision offered on what exactly such relationships entail, there are many obvious advantages to seeking to crowd-in private sector funding and other support for government schemes. (This blog favours greater engagement with the private sector by governments in pursuit of public goals; see for example the previous post, here).

When PPPs are idealised, societies can see big business become more directly involved (than the indirect means of taxpaying) in the co-provision of public goods; for its part, business can envisage greater influence over the roll-out of infrastructure and other projects, reassured -- by the state's involvement in the project -- about its long-term prospects and return-on-investment.

Yet less ink is usually spent on what these relationships require, beyond viable co-financing arrangements, to work.

In particular, current PPP enthusiasm tends to presume that the public sector ministry or department can in fact deliver as a partner. The Malawi story highlights familiar accountability, transparency and integrity problems with many government departments in that sub-region, but the issue will also be one of sheer capacity and the available skills-base.

The issue is important to debates on promoting pro-developmental business in Africa because PPPs assume a class of public servants and regulators capable not only of delivering utilitarian projects but of conceiving and overseeing PPPs that strive to meet public interest (social, environmental and governance) criteria as well as commercial attractiveness ones.

I think that the issue I mean to address is this: 'We often assume that the difficulty is getting business to take the wider issue of public goods seriously; but many firms accept the merits or imperatives of development goals and are often waiting for a government lead and direction; so, what do hopes for scaled-up public-private relationships in pursuit of developmental goals assume about the quality of public servants, rather than just the motivational posture of private firms?'

It would be interesting to see survey data on whether the majority of today's non-migratory young graduates in major African countries prefer a public sector job to a business/corporate one.
It is often assumed that private sector roles attract the more dynamic, enterprising and capable cohorts, while supposedly more secure but lower-paid government jobs attract those who are more risk-averse, have public service motivations, and so on.

In less-developed African countries, as business-government interactions increase around PPP models, one question that will arise more starkly is the potential drain of government talent into corporate teams. Firms may face dilemmas since their instinct to 'poach' an individual may clash with their sense that more will get done on their PPP if the talented individual remains in government. One idea is for the private sector partner to sponsor government counterparts -- as if seconding them -- to ensure these remain in government; this sounds like a recipe for corporate capture of government agencies but, if not too na├»ve, holds the promise that PPPs can deliver projects without stripping departments of their best staff.

The Malawi scheme was not particularly sophisticated, but does reveal a degree of entrepreneurialism within government agencies that in commercial life would be rewarded, in relevant appropriate circumstances (see this reflection on the upsides of 'corruption as innovation' here). Yet the Malawi conduct is not the sort of 'initiative' and 'innovation' that PPPs require of public servants if PPPs are to make meaningful impact, as a model, on African growth and development.

See a previous post on 'revolving doors' and the private sector's responsibility for public sector integrity as Africa rises.

Jo

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