Regulatory culture: punish or persuade?

How do we design 21st century regulatory schemes for responsible business? Regulatory culture must shift, not just corporate culture.

How do we design viable, principled but pragmatic regulatory systems that engage with business in pursuit of goals but are legitimate and trusted by all societal stakeholders?

In particular, what mix of 'enforcement' and 'guidance' is appropriate and effective on the part of the regulator?

The prompt for this post is the interim report on the EPBC Act, Australia's principal federal legislative scheme for environmental protection.

I study 'business and human rights' (social impact) but this emerging field has not done enough to learn from the bitter experience of the conservation and environmental movements and the history of regulation there. (The social and environmental are/ought not so easily be distinguished).

The EPBC Act review has various lessons of interest in my field (e.g. on recent reporting schemes on 'modern slavery' in supply chains), from federal/state coordination to questions about the adequacy and quality and availability of reported data. But what stands out are the lessons in the review about designing enforcement aspects of regulatory schemes where corporate activity may impact on public wellbeing and public interests.

The review condemns federal regulators for settling into a regulatory 'culture' of not using available enforcement powers, and for their over-reliance on a 'collaborative approach to compliance and enforcement' that is 'too weak'.

Last year in a related post on the Royal Commission report into the banking sector I noted the same pattern:

"The lesson is that regulators -- even where they have these powers -- appear reluctant to use them, and so err on the side of 'engagement' where sometimes demonstrative penalty seems more appropriate..."

There are many merits (as I wrote in that 2019 piece) to a regulatory approach that is judicious about the use of enforcement powers, and that privileges cooperative approaches that guides and educates and harnesses companies' own resources (etc) in pursuit of the public policy goal. Moreover, the regulator's dilemma is always 'when to punish and when to persuade'.

But the credible threat of non-negligible punishment may be vital to any strategy of dialogue and engagement. Moreover, enforcement is a form of 'guidance'. Theorists who promoted dialogic and collaborative problem-solving engagement made clear how such regulatory strategies to explain and foster compliance were defensible, but only where the regulated entities know the consequences of non-compliance or perfunctory compliance. A credible pattern of using punitive powers and a reputation for fair but decisive use of enforcement powers is, in this theory, inseparable from the other more 'cuddly' bits about cooperation. Australian regulators have only embraced the latter.

Parking inspectors and fines come to mind. I used to remind my eager 'business and human rights' students -- believers in regulatory capability -- that the Oxford city council has more parking inspectors than the staff at the UN HQ office in New York coordinating the [voluntary] UN Global Compact with business (not an inspector / enforcement entity). The interim review of the EPBC Act shows that since 2010 the total fines issued for breaching environmental approvals is less than the annual amount of traffic fines levied in a typical small local government area in Australia ...

From environmental impact to responsible banking to modern slavery in supply chains, public trust in the regulation of responsible business may require that 21st century regulatory models have some supposedly old-fashioned 'sticks', and use these to incentivise compliance and engagement. This doesn't require that EPBC-type regulators have the blunt 'revenue-raising' approach that parking inspectors do: there is more to regulation than this. 

Schemes like the EPBC Act have a wider purpose as part of efforts to shift behaviours towards socially responsible ones. But the judicious use of enforcement powers clearly has a place in such a scheme.

JF

Here is the related post on regulatory culture.

Corporate culture: capital vs social capital

Australia is this week absorbing the final report of the Royal Commission into 'misconduct in the banking, superannuation and financial services industry'.

What is at the heart of the disregard shown by retail banks and finance houses for regulation aimed at protecting consumers from the excesses of the pursuit of profit motive?

As ANU's John Braithwaite has said, a core dilemma of regulation is "when to punish and when to persuade" (1992+).

Command and control-style punishment and sanctions are not the only way to regulate. There are many reasons for non-compliance, suggesting that regulators sometimes need to preference dialogue and engagement over knee-jerk automatic punishment. There is a strong case to be made for regulatory designs and institutional approaches that privilege engagement, persuasion, education, capacity-building. Braithwaite's 'responsive regulation' theory would suggest that regulators hold punitive powers in reserve while making overtures to regulatees and seeing how they respond to non-punitive approaches. The regulator then adjusts its own approach. This will be perceived, the theory goes, as more fair and so legitimate. Entities will internalise the regulatory goal, compliance will improve and the regulator can let compliant entities essentially self-regulate, and indeed exceed what is required in pursuit of the social goal underlying the regulation.

What is a lesson from the Royal Commission?

It is that this approach, as influential as it has been, needs to be revisited. Or at least the theory needs to be fully implemented if it is to work. Not surprising, that.

The lesson is that regulators -- even where they have these powers -- appear reluctant to use them, and so err on the side of 'engagement' where sometimes demonstrative penalty seems more appropriate. The issue is whether the regulated entities are responding to signals to change. If they are not, another more intrusive approach is warranted from the regulator.

Standing back, the key word is in the first sentence above: motive.

Incentives matter: we can talk all we want about 'values not just value' and 'engendering a shift in corporate culture'. But when all is said and done, market actors respond to incentives, and clear, credible and consistent signals and actions from regulators about the consequences of non-compliance.

And those consequences sometimes need to be severe.

As Commissioner Hayne wrote, "misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished..." It is not deterred -- for such profitable entities -- by requiring those found to have done wrong to "do no more than pay compensation." It is certainly not deterred by the issue of infringement notices in the hope that the market or consumers will respond to those incidents by withdrawing or conditioning their custom or financing.

Responsive regulation remains a highly appealing theory, if properly implemented. It is bound to fail -- as Braithwaite and his disciples have always said -- if only partially implemented. If all the cuddly dialogic bits are followed, but not the hard and punitive bits. Regulators can and should talk to their regulatees about how to improve compliance. But they are not mere consultants to business. They are regulators. Braithwaite would insist that the regulatee must know that the regulator can escalate things, where fair and appropriate and where there is no response to overtures to comply. They must know and see that the regulator can make life very difficult.

As Braithwaite once wrote, dialogue, engagement and capacity building must take place "in the shadow of the axe".

Australian regulators need to have the axe, even if they need to be smart and fair about when to keep it in the background and pursue a more engaged approach.

This is true from banking conduct in the retail sector, to emerging models on supply chain reporting in the context of modern slavery, on which see earlier posts on this blog.

Jo

Regulating the Future: 'private sector, public role'

One ought not get too categorical about distinguishing the public and private sectors when thinking about the wider 'sustainability' and 'social impact' agendas.

This blog's name plays off the differences we apprehend between public and private actors and activity, from principles (e.g. differing legitimacy levels as between corporations and public authorities) to drivers (e.g. differing incentives and audiences) to practicalities (e.g. different tools and techniques even where the ends are common).

But in many socio-enviro responsibility & sustainability contexts, the public-private distinction may be difficult to make. Or it may be not useful to dwell on, where it blinds us to the significant governance contributions of private actors towards what are ultimately public goals.

Past posts have dwelt on this, but this one (the first for 2018) is prompted by three recent things that I see as connected in relation to this enduring public-private debate.

The first is my delight this week in meeting my new PhD student here at ANU, who will study the financial sector as a significant source of influence on the human rights impact of business more generally. (See recently in this regard the Thun Group of Banks view on one aspect of this, here).

Who is a 'regulator' and what counts as 'regulation', and what are appropriate and effective contributions that those policing bottlenecks in the economy -- such as financiers and insurers -- can play in furthering regulatory objectives? How does formal Regulation (with a big R) or other policy interventions (regulation with a small r?) leverage these contributions?

The second is that I recently returned from a sustainable development symposium at the University of Indiana, Bloomington on balancing freedom vs security in the regulation of cybersecurity. Given that (mostly privately owned) tech firms dominate much activity in cyberspace, they will surely play an outsize role in the governance of that space relative to public authorities.

With this influence comes elevated levels of responsibility on the part of private actors (and expectations of increased accountability about how that power and influence is used).

Which brings me to the third prompt for this post: a Twitter thread from @KateAronoff about a meeting (to which the media were not invited) between Canadian Prime Minister Justin Trudeau and Amazon CEO Jeff Bizos, described by a CBC journalist as a 'bilateral' meeting. Now technically it is bilateral if two parties are involved. But Aronoff's point was to get us to pause and consider the implications of a world where the language of diplomacy is seamlessly used in this way. Normally, only heads of state have bilateral meetings... but then Amazon does 'run' a large part of the world in net terms.

 

Surveys suggest many consumers/citizens trust (private) big brand firms and business leaders more than they trust public institutions and elected political leaders. Trust is a key component of regulatory legitimacy and effectiveness. Yet as we design societal impact regulatory models for the globalised (and virtual) economy, and make use of -- or just acknowledge as real -- private governance contributions, we need to think about the authority and legitimacy and other qualities that only public institutions ultimately have.

Jo

@fordthought

Responsible business in a Trump era (III)

Just how compelling is the 'business case' for firms and funds to adopt and implement human rights policies?

Here I mean planning, self-assessment and reporting policies and systems that are explicitly framed in human rights terms -- not the wider idea of a 'business case' for being socially responsible.

Among the outgoing Obama administration's last actions in December 2016 was to shepherd in a US 'National Action Plan' on 'Business and Human Rights' (BHR).

The evidence so far shows clearly that a Trump-led US federal government will not lead, in policy, messaging and regulatory terms, in the BHR area. Indeed it will evidently not do so on the responsible or even sustainable business agendas more broadly.

If that is so, it may nevertheless happen that in the US and beyond, big business and the financial and insurance worlds drive parts of this broad agenda itself, not waiting for a national government lead.*

With important caveats, I have recently blogged on this possibility.** These blog-posts were offered in the search for a 'silver lining', from a BHR perspective, to Trump's election. Of course European governments + the EU (and others) might lead in America's stead. But the US matters.

If it happens that business does not wait for such a lead, it may be because there is a perceived 'business case' for it (even if part of that case is just longer-term anticipation by business of a degree of reversion in regulatory trends in a post-Trump presidency).

The 'business case' concept in the BHR field derives from the wider corporate accountability / responsibility field. It is a familiar feature of the CSR field, in particular. 

'Business case' is of course shorthand for the idea that whatever the ethical, moral or legal reasons for mitigating a business's social, enviro and governance impact, it makes good commercial sense, especially in the longer term, to embrace this agenda.

We need to be cautious about a 'business case' at the broad level: business sectors and sub-sectors -- and individual firms within these -- may have very different incentive structures (etc.) in responding to or anticipating social impact issues. The 'business case' concept is a more sound one when describing how those incentives etc might be approached in particular contexts, making a case each time.

For years the CSR and then emerging BHR fields spent considerable energy on articulating a general 'business case'. Yet in recent years BHR advocacy has sometimes appeared to proceed on the basis not only that the business case for acting on human rights risks is self-evident, but that it is or will go further and become an important driver of uptake by business of the BHR implementation agenda.

The thrust of the current post is to suggest that the Trump era will now put to the test claims made in recent years about the strength and obviousness and appeal of the business case for self-starting action on human rights risk.

Put another way (and partly for provocation's sake), it is easy to assert the existence of an obvious business case for business to be pro-active about addressing human rights impacts, but we need to be careful about assuming that this has some sort of self-executing logic to it.

At very least, it seems unlikely that all aspects of BHR will advance at equal pace and degree. Parts of some sectors in business may go with some aspects of the BHR agenda (eg 'modern slavery' in supply chains), while not on others; we may see uptake on some measures (eg human rights due diligence in larger listed firms and financial houses), but little movement in areas such as access to remedy.

Of course many would argue that because human rights are universal non-negotiable normative imperatives, emphasising the commercial advantages of investing in a human rights-consistent business is a wrong starting-place to 'motivate and justify' corporate engagement in human rights implementation.*** This is partly the thrust of a recent Harvard Business Review article entitled 'We shouldn't always need a business case to do the right thing'.

I think there is unarguably a business case for some kinds and sizes of firms to take the BHR agenda seriously. Demonstrating empirically that such action protects or creates commercial value is more difficult.

Jo

* This comment relates to the federal government: the same reactionary approach to promoting sustainable and responsible business conduct is not necessarily true of state-level governments in the US, some of them major economies in their own right, such as California.
** My previous posts on 'responsible business in a Trump era' are here (February 2017) and here (November 2016).

*** See Posner and Baumann-Pauly, 'Making the Business Case for Human Rights', in Baumann-Pauly and Nolan 2016, section 1.2.

Modern slavery: consumers, regulators, companies

"... Debate continues over whether 21 or 40-plus million people live and work in slavery-like conditions. Either number is unacceptably high in the 21^st century.

Yet addressing modern slavery is not only a job for government or bigger businesses: a critical mass of informed proactive consumers will surely be as significant as law-making..." 

So I argue in a blog-post on another forum, on Australia's moves towards a Modern Slavery Act, incorporating corporate transparency requirements of one form or another.

Here is a link to that blog-post.

https://www.policyforum.net/consumers-must-join-business-government-addressing-modern-slavery/

JF

ps -- see previous blog-post on this issue on this blog, that 'business and human rights' is about more than corporate supply-chains, modern slavery, and transparency legislation ... even tho these are big enough in themselves: here.

Responsible business in a Trump era (II)

How might the Trump era affect trends in responsible business (and its regulation)?

I am hesitant to give Trump more social media air-time than he already gets*, but the question is of broad relevance if indeed we're entering an era in which the state-business nexus has some particular features.

One of the things us regulation scholars navel-gaze about is the relative significance of public versus private forms of governance, and the scope for innovative hybrids of these in pursuit of both societal and commercial goals.

Last November, around his inauguration, I blogged on what Trump & co might mean for the responsible business agenda, in particular in relation to my own interest in policy and regulatory initiatives around that: here.

(At around the time, at least one other blogger also wrote on this topic: see here.)

In that post I speculated whether business might lead, and civil society be reinvigorated, where a new administration distances itself from promoting responsible and sustainable business practices:

"... a reluctant or recalcitrant or reclusive government [on this agenda] might indeed stimulate all sorts of unexpected enlightened activity ... often led by business and investors. This may include a greater convergence of the BHR agenda with core commercial ideas about value-creation, productivity, competitiveness and so on..."

I wrote that because I saw a possible silver lining on what otherwise was a rather gloomy outlook for this agenda at least within the US.

I still think it holds merit.

This is a long lead-up to saying that my attention was drawn to this blog-post on how corporate responsibility may in fact be mainstreamed in a Trump era, without necessarily waiting on government to lead (or the US government to lead, in a global context).

I do accept rejoinders such as those of Mark Taylor @lawsofrule that see the many possible downsides here.

Sub-question

Of course there's a sub-set of questions here: Trump will matter to the US context in terms of responsible business conduct, but the sub-question is 'Does the US context matter globally?' The world's largest and most diverse economy does not necessarily lead on innovation in responsible business or regulation or policy innovation around this.

Still, the premise of this post is that what happens in the US, and in US corporate life and cultures, matters for its own sake and will continue to matter globally.

At the global governance level, there is an argument to be made that any Trump-related leadership gap on issues affecting the responsible business agenda globally (including climate change) might be taken up by Beijing. (See here for a related comment on the potential for Trump isolationism to create leadership opportunities for Beijing).

On this blog's themes, it is so facile still to persist in assuming on responsible business issues that 'Western company or regulatory state = good', and 'Chinese state or firm = bad'. One still sees a lot of this lazy assumption, eg in the China-in-Africa debate. This ignores some interesting practice and policy-making from China, some of which may support a thesis that despite the weak underlying domestic media / civil society context, it is not inconceivable that leadership on some of these issues will come from a non-OECD country and its corporates.

Jo

Twitter: @fordthought

* Of course Trump alleges a media conspiracy to distort or not report certain issues or views...

Trumping the responsible business agenda

What would a Trump presidency mean for the responsible and sustainable business agenda? 

Even as we question the limits of expert analysis, it keeps pouring in following Donald Trump's remarkable US presidential election victory, coming as it did with Republican capture of both legislative houses.

Well, here is my small contribution (on the issue that I follow).

Overall I think that it is hard to envisage a Trump administration pushing for governmental and regulatory action on the overall sustainability agenda, and on promoting corporate responsibility and accountability.

For instance, a Business and Human Rights 'National Action Plan' is not something one would imagine near the top of any policy agenda.

Yet there are two related points that might be made:

1. Overstating government

Perhaps we sometimes overstate the relative significance of formal institutional regulatory and policy initiatives to the furtherance of this agenda, or at least to preventing, solving and remedying adverse human rights impacts of business activity where these are a risk or reality.

In this sense, this election result may not derail or detain that agenda as significantly as one might suppose. Human rights promotion, level playing fields for responsible firms, remedial avenues, etc cannot be left to non-governmental actors. But governments cannot do everything. Without promoting an abdication of governmental roles and responsibilities, in the Business and Human Rights / corporate sustainability / responsible business field it may be that we have all focused too heavily on what governments ought to do, relative to alternate or parallel strategies to transform fundamental market and consumer incentives, mindsets, behaviours and patterns in ways that might engender faster and more profound change.

...

2. Under-estimating business

Perhaps we can (or must...) see this outcome as an opportunity to explore further the many vital and vitalised vectors and avenues for corporate, civic and consumer actions (and coalitions thereof) that do not necessarily rely on government to lead or steer.

Indeed the existence of a reluctant or recalcitrant or reclusive government on this score might indeed stimulate all sorts of unexpected enlightened activity in this sphere, often led by business and investors. This may include a greater convergence of the BHR agenda with core commercial ideas about value-creation, productivity, competitiveness and so on.

...

In short, it is not necessarily all bad news.

(There is also the question of whether / how any deceleration and adjustment on global and regional free trade agendas might affect that emerging body of work on the intersections between trade and investment regimes, corporations, and human rights.)

Jo

More generally ...

Its been nearly two months since my last blog-post -- a reflection of just how much information and analysis is 'out there', a volume and pace that does not necessarily make for better-quality decisions.

I can only use the fact of this time-lapse as a metaphor for a point made in some earlier posts about the proliferation of initiatives and normative and reporting frameworks relating to sustainable, responsible and accountable business in society (here is an example).

This flurry of activity is hard to criticise, yet should not be an end in itself, can lead to new indirect definitions of 'compliance' in business & human rights terms, and does not necessarily help us solve the underlying problems.

Business, human rights and income inequality

What role does business have in addressing income inequality?

Does the way in which we now ask this question risk a gradual shift that wrongly pulls the focus away from its proper subject, which is the duties and policies of the regulatory state? 

How did I arrive at these remarks?

1. Very few reasonable people would dispute that income inequality (globally, and within various countries and cities) is a major issue of our time.

2. Very few business leaders would dispute the trend towards greater interest in / scrutiny of the social impact of business practices by social, consumer, market / investor and regulatory stakeholders.

Yet it is not particularly obvious, putting 1 and 2 together as issues, that one aspect of being a responsible business is to take steps to address income inequality -- a highly complex policy puzzle and socio-economic phenomenon (insofar as I understand it myself... ), one not easily fixed by simply appealing, for example, for greater bona fide corporate adherence to national taxation regimes.

At very least, is it not obvious that compliance by business with fundamental human rights standards (or even some fulsome embrace of these norms, beyond mere compliance) would necessarily have any real impact on income inequality.

Approached in terms of the legal standards that comprise the global human rights architecture, sure, there are perhaps some issues for example around wage levels that would differentiate 'employment' from 'servitude'.

I am sure that a case can be made that better performance by business actors on recognised human rights standards might materially improve (narrow) the income inequality margins.

I just do not think that case has been made yet, or properly, or fully.

At very least, I think arguments that put 'business and human rights' and 'income inequality' together are at risk of positioning human rights as some kind of magic policy fix-all, as is often the case. So that we get arguments (in effect) that if one just applied a human rights lens to climate change = fix! (see here). Or if one just looked at income inequality from a business-human rights perspective = fix!

These comments of mine are no doubt full of holes, but are prompted by the otherwise unobjectionable and agreeable remarks of a leading scholar on business and human rights in a recent post in The Conversation: here.

Academics can (and sometimes should) be advocates. Yet they can (and often should) also be nit-picking and devoted to accuracy. In this post I am probably at risk of being seen at best as overly nit-picking, or at worst as an apologist for business.

Instead my only point is the nit-picking one that it hardly seems self-evident that if more businesses ensured their operations did not violate human rights standards (as I understand these in terms of present international law), that this would affect income inequality in a meaningful way.

Income inequality matters -- no doubt. But human rights vocabularies, standards, strategies, lenses, frameworks, etc., are not necessarily the secret to addressing this endemic and worsening issue. Nor necessarily is it the role of business to address that issue, lest we let the state and policymakers off the hook (and inadvertently ascribe far greater social influence to business than is proper or prudent).

The current fashion of focusing on business's own responsibilities can sometimes have that effect. On income inequality, it is ultimately the state that matters, and while we must demand all sorts of things of 21st century business and finance, it is the state first and foremost that has the duties and powers to attempt to address the problem of income inequality.

Jo

See previous more practical, less nit-picking posts on this issue in 2014 and 2015 around the time of Davos with its focus on income inequality: here.

Extractive Industries and Conflict Risk

In what circumstances can the discovery and/or development of large-scale mineral resources bring countries or communities together, consolidating peace rather than driving conflict?

This question is the subject of the recently published Chatham House report 'Investing in Stability' (here).

As co-authors we found this a tricky subject area, filled with counter-factuals, definitional minefields, and serious methodological problems: how do we measure in what ways major resource projects increase or mitigate conflict risk? How do we attribute 'peace-positive' events or processes to the conduct of firms or others? How do we define 'peace' (net peace? local or national? etc) and who gets to do so? And so on.

The report proceeds on the basis that while energy and mining firms have increasingly clear responsibilities in ensuring conflict-sensitive operations and practices, the principal responsibilities are those of governmental authorities.

The tricky fact is that in fragile and contested states and situations -- the topic of this report -- governmental capacity is by definition very low or compromised. This increases the onus on responsible firms (and their financiers and insurers) to decide how, when and indeed whether to pursue large-scale projects in areas where the historical and political context makes it very difficult to see resource extraction and related revenues as capable of contributing to peaceful outcomes and processes. 

Jo

Milton Friedman's ghost in Mombasa, 2015

The fashion at corporate responsibility summits is to mock Milton Friedman, the Chicago school economist.

I often wonder how many who do so have in fact read his late 1960s - early 70s doctrine before dismissing his famous line that '... the only social responsibility of business is to make profits...'

(Here it is in a nutshell, and by the way in its full explicit Cold War, capitalism-as-freedom context; a fair full quote would add what he did: '... so long as it stays within the rules of the game ...' engaging in free and fair competition without deceit, and compliance with the laws of the land.) 

Friedman's ghost has appeared a few times to me, in broad daylight too, here.

'Here' is downtown Mombasa, the heaving multi-ethnic port city that has long been the gateway to Kenya, and indeed to the entire east Africa region.

(Through its congested port comes everything from east Africa's oil supply to many of the small consumer goods sold by the region's ubiquitous street traders; too little that is Kenyan besides tea is exported in return -- and too much of its 'exports' consist of ivory poached for Asian markets, but that is perhaps another story ...)

In apparent contrast to Friedman's austere doctrine, we now tend to accept that 'the development challenge is no longer the preserve of government'. So reads an editorial by Kenya's deputy president in a local daily, following remarks he made at a conference in Nairobi earlier this week.

The remarks are an opportunity to reflect on what business the business community has in designing and delivering the development agenda -- globally, nationally and locally. 

There is no doubt, in my mind, that business (however we might define it) both has a significant role to play (within some important limits), and has clear interests in the development agenda succeeding.

The deputy president's remarks raise some consistent issues in topical debates on how the private sector can support development, and how supporting a vibrant private sector can have developmental dividends ... 

Some points he makes are hard to argue against. The private sector stands to benefit from developmental gains; its role goes beyond financing or co-financing projects that have development impact -- it is not just a source of resources; and so on.

And only purists will object to him using the term 'corporate social investment' (which can have a limited CSR-project meaning), where he really means a range of broader impacts that larger firms and funds can have beyond simply Friedman's approach of maximising profits while obeying the rules of the game, especially paying taxes and employee's salaries and complying with environmental and other laws.

Here in Mombasa there are initiatives, for instance, that reveal business groupings taking a more deliberate, engaged, do-not-wait-for-government approach to issues such as finding work for what Friedman called 'the hard-core unemployed'.

Yet call me a heretic, and accuse me of seeing ghosts: Friedman was not totally, as they say, 'on crack'.

In all my meetings with businesspeople here, including (in fact, especially) those with sincere longer-term developmental passion and vision, a message emerges that on its face is uncomfortable for all of us espousing a far greater explicit role for business in development.

This is the inconvenient truth that the greatest developmental impact business could have in places like this is for government to focus on allowing them to succeed as businesses. Not specifically as socially responsible or development-oriented businesses (although there's no trade-off necessary), but to succeed as law-abiding firms creating value, jobs, tax revenues, demand for better governance, and so on.

The developmental impact that a flourishing, open business sector could have in such places (within the natural resource and environmental envelope) perhaps compels one to turn from exploring alignments and partnerships (the current trend) to old-fashioned 'let tax-paying business succeed'.

The public policy issue then is far more about fostering enabling environments for core business activities, than persuading business to seek alignment with particular aspects of the development agenda. 

If so, it follows that contrary to the deputy president's (otherwise welcome) message, the role of government is not to help business identify where it can have maximum developmental impact.

Instead the role of government is to identify where it (government) can create maximum developmental impact by identifying where to help business do what business does best, while upholding the (evolving, more demanding) rules of the game ... cue Milton Friedman's famous quote.

Jo

PS -- this approach may of course assume that government has the regulatory, planning and other capacity in particular to tax business appropriately and to make use of those revenues.

Cross-sector partnerships: fashion, fuzz and focus

This post marks six months to the summit to agree the next global development agenda, to replace the 2000-2015 MDGs (Millennium Development Goals).

Discussion of the Sustainable Development Goals is filled with the significance of cross-sector partnering as the key to unlocking development potential.

By 'cross-sector' is often (if not exclusively) meant 'public-private' and so the partnering agenda is, in large part, about more proactively engaging the worlds of business and finance in the world's development.

If 2015 is the 'year of partnerships', what is at stake?

Any good contribution on this topic needs to address, at a minimum (a) what sorts of activities might be meant by the broad term 'partnership' or 'partnering'; and (b) the many assumptions that attend the rhetoric on this issue: assumptions about trust (between business and government), and about aligned incentives and adequate capacities for long-term sustained partnering.

This is vital since (as often when UN summits loom) there is a tendency towards self-reinforcing rhetoric, persistent refrains that reinforce fashions while often losing sight of opportunity costs and risks.

The fashion for cross-sector partnering risks erecting this very difficult, emerging set of practices as the development panacea without adequately theorising, testing, illustrating. 

It also risks distancing states from their development obligations by suggesting that the main vector for development requires the cooperation of business and others. Yes, collaborative development holds great promise, but development failures cannot simply be put (in future) to the failure of partnerships. These fail all the time, in many areas of life.

A blogger on this -- or any -- issue should offer variety along with some attempt at insight, opinion, information.

This is true even for an occasional (roughly fortnightly) blog like this one.

Yet when a topic is complex, surrounded by mediocre inputs, and very important, I think a blogger adds value simply by passing on something worth reading.

Of all the pieces I've read in 2015, this World Vision report perhaps best sets out the issues and meets its title's promise of 'advancing debate' -- if only by promising to help clarify what the debate is, and so separate fashion and fuzz from topics that need focus. (It follows some earlier excellent briefings from that organisation on this topic).

For the most recent thoughts on this issue on this blog, see here.

Jo

Public-Private Partnerships: Hype or Hope?

Partnering with business for development is overwhelmingly a good thing.

Disciples of partnering are making fascinating progress, as The Partnering Initiative here in Oxford shows; pilgrims of partnering are forging interesting, promising relationships -- not waiting for policy orthodoxy to lead.

However, this post questions the new-found faith in public-private partnerships (PPPs).

It makes two points about the need for caution over the current enthusiasm for PPPs as the panacea for Africa's development.

1. The first is that the developmental impact of the private sector is not limited to what businesses can do in partnership with governments, civil society, and community groups.

Strategies that put 'business' and 'pro-poor development' in the same sentence should be about far more than PPPs. There are significant ways in which the developmental impact of business activity can not only be harnessed, but unleashed, without involving any partnering of the 'PPPs for development' sort.

For instance, last week's post noted the scope for responsible private enterprise to deliver poverty-reduction without partnerships as such, but with development policies geared to foster investment and broad-based, inclusive growth in societies that currently struggle to attract or achieve that.

The problem is that the current fashion for partnering, while welcome, could obscure the 'quick wins' available from, for example, helping countries reform their business regulatory environment in ways that reduce unemployment. This stuff is hard -- but not necessarily harder than PPP-ing, and potentially far more impactful in a diffuse sense across society at large.

Of course, short of partnering it makes sense to consult business (in an appropriate and principled way) in the design of policies intended to foster inclusive, sustainable growth through unleashing the private sector.

1A. This point -- PPPs are not the sole vector of increasing the private sector's development relevance -- relates to another. An emphasis on 'partnership' can be too narrow a framing for what is really about public-private cooperation more broadly: (a) 'partnering' is not limited to formal, regulated PPPs such as infrastructure ones, but encapsulates a range of relationships aimed at development impact; (b) cross-sector cooperation and dialogue, especially where systematic, can be hugely significant without involving partnering as such.

I promised a second point of caution over current prevailing PPP-related enthusiasm!

(A precursor to that is to note that the enthusiasm for PPPs and wider partnering is in fact hardly universal across either the business or development communities).

2. The PPP hype belies the experience that partnerships are hard to generate and maintain, often controversial, not necessarily efficient or effective, and not necessarily grounded in evidence of their superior developmental impact.

I say this as an overt proponent of exploring ways to engage business in the development agenda.

For the last year, I've advised on an emerging cross-sector partnership intended to promote the partnering agenda. The difficulty in getting business, government and academic actors to work together on this discussion-about-partnering is itself instructive of the challenges of partnering-in-fact. More work needs to be done on measuring the effectiveness and opportunity-cost of PPPs (widely defined), and on conceptualising their political and policy risks and implications 

In this respect, I recommend a read of this Devex Impact blog post on partnerships, especially its first few paragraphs.

Previous posts on this site have sought to reflect on these issues, for example the hype about PPPs in Africa (here).

Jo

What role for business in tackling inequality?

'Africa Rising' advocates boast that the sub-Saharan Africa region hosts six of the world's fastest-growing economies. Yet it also holds six of the world's most unequal societies in income terms, according to the African Development Bank.

This week Oxfam released a report on the growing wealth and/or income gap around the world.

This is ahead of the annual Davos gathering.

If the inequality gap raises serious social policy (and even security) issues for governments to respond to, what is a responsible role for the private sector on this issue?

That is, what role should organised businesses play in addressing structural income inequality in African economies, beyond their duties as taxpayer and employer? Would shifting the focus onto business (and re-framing inequality as a corporate responsibility issue) wrongly detract from the proper locus of responsibility?

That lies in the complex social contract between citizen and state. Corporates should be neither excluded nor exempt in such a debate.

I wrote on this (... here ...) almost exactly a year ago -- also ahead of Davos, also about inequality, and also unsure where exactly 'responsible business' meets 'redistributive fiscal policy'.

There have since the last Davos been many reports on how Africa's fast (average) GDP growth rates have not reduced income inequality and may have only exacerbated it (see, for example, this report and this IMF Policy Paper, both from a year ago).

However, among all the policy prescriptions and advocacy points, few offer insights into what it is business could be doing more of, or less of, other than the obvious issues (where foreign firms are concerned) around tax evasion or avoidance.

Income inequality raises serious longer-term business growth and investment strategy issues in Africa, since it affects the pace, quality and sustainability of growth (for example, of new urban middle classes)*.

This 'bottom line' element suggests that business leaders will continue to give the issue attention. In weaker governed states in Africa, that could in theory (if somewhat counter-intuitively) extend to corporate taxpayers helping to increase the capacity of their host governments to levy and distribute fair and viable corporate taxes more efficiently.

For many African economies, it is arguable that growth rather than income inequality is the priority: without the tax income from sustainable, broad-based growth these economies will struggle with distributive policies. The current focus on 'inclusive growth' need not be a simplistic 'growth and redistribution' model, which posits citizens as passive recipients; if its ideals are realised, inclusive growth is economic empowerment not wholly based on state provision of income. Firms can contribute to this through their hiring and procurement policies. 

Jo

* Oxford Analytica, 7 November 2014

'Flourishing Cities': partnering for resilience

How can effective, appropriate cross-sector partnering help in 'future proofing' the developing world cities of the future?

'Flourishing Cities' is the theme this week of our annual Challenges of Government conference at the Blavatnik School of Government here in Oxford.

From an Africa perspective (as this blog is), the conference programme speaks to the scale of urban development and human security challenges in fast-growing cities. Far from Oxford's pleasant setting, these challenges come across very vividly in the heaving expanse of cities from the Cape Flats in South Africa to Cairo.

(The Nile city was the setting of a related post a year ago now on the 'turnaround challenge' for business in mega-cities (here)).

Yet by focusing among other things on the progress of one troubled Colombian city, the conference agenda also speaks to the largely untapped potential for scaling-up dialogue and partnership between policymakers, business, civic groups (and often donors).

The evident and largely latent scope for greater cooperation and collaboration holds considerable promise for unlocking developmental bottlenecks in ways that make commercial sense for business and investors, too.

At some level, there are strong shared interests across sectors in moving beyond guarantees of minimal security so as to enable human flourishing and the attainment of basic aspirations. It goes almost without saying that business and governments share an interest and indeed an imperative in promoting more inclusive and sustainable growth and poverty-reduction; more and better education, job-creation, and productivity; greater shared prosperity and reduced inequality (of income, healthcare, security and so on); greater social cohesion and reduced radicalisation; and so on.

At this level, the case for partnering is not hard to make. Much harder is to give effect to such ideas, and to ensure that there are principles to guide the pragmatism involved in greater cooperation across sectors in meeting the development agenda.

Moreover, there is a growing shift to focus on city-level issues, from investors to development agencies. Schemes and initiatives proliferate: Rockefeller's '100 Resilient Cities', Columbia University's 'Millennium Cities' initiative; IBM's 'Smart Cities' initiative, and the list goes on. Again, the case for focusing on urban development and resilience challenges is easy to make, even if partnering is hard: finding the right incentives for sustained cooperation, the right relationship parameters, deciding who counts as 'business' or 'the private sector' in selecting partners, negotiating relationships with national- and provincial-level governments.

As the previous post on 'innovation' noted (here), there can be a tendency in using the term 'partnership' to gloss over not just how hard and entrenched development challenges can be, but also how hard, piecemeal, or political partnering can be (even if 'development' was easy!).

What we are working on at Blavatnik, among other things, is getting to the heart of the fundamental concepts around why partnering works or does not work, is appropriate or inappropriate, is embraced or resisted.

These challenges apply generically: one myth in the recent turn to city-level programmes, conferences, investment strategies (etc.) is that by descending to the supposedly more agile and adaptive city level of analysis or administration, one can by-pass some of the enduring problems of cross-sector collaboration and get more done.

This is an appealing idea -- but not necessarily a sound one.

Jo 

Sustaining sustainability: bottom lines, full circles

'Can we expect corporations to solve global problems?'

This fortnight's post relates to a panel with this title that I attended at this week's 'Global Horizons' conference hosted by Oxford Analytica.*

As they say, 'one had to be there' ... not surprisingly the panel covered a lot of ground, some of it requiring fundamental questions about the real or ideal nature of society, its well-being, and its governance. And 'how', 'why' and 'in what direction' those issues and expectations may be shifting.

The combination of Africa's serious developmental / governmental deficits and investment interest in its contemporary growth story make it a primary forum for exploring these questions (or at any rate I think so -- hence this blog!).

So anyway this post is not a report, nor attempts really to address the question (or how it was framed). It only reflects on two of the various things that struck me on the panel. These relate to the 'who' issues around sustaining sustainability.

Who: firms

First is how so many debates on business and society or corporate responsibility or the public-private divide are approached in a very limited and limiting way, by reference to 'the private sector' only as large, listed, branded Western multinational business corporations.

This is a very narrow perspective. Effective analysis of and strategies for sustainable and responsible business cannot be lazy. They must consider how incentives, inclinations and other factors vary considerably depending on sector, nationality, size, corporate form, etc. There is no one 'private sector'. Someone raised this with the panel, thankfully; it is something of a bugbear of mine, noted indeed in the very first post of this blog (2011).

Who: governments

Second, the panel question did not mention government but implicitly of course it is not asking 'what can / should corporations do about global problems', it is asking 'what can/should they do relative to governments' (or indeed relative to people acting as [free] agents, consumers and citizens in society without waiting for either governmental or business actions).

Many commentators on this topic perhaps understandably focus on what business should do and not do. True, much of what matters and can be done in sustainability terms does not require or need to wait for government. Yet there are still too many debates one goes to side-step the question of government, the governance of responsibility, the division of roles on promoting sustainability.

The panel did not (like this blog) have an Africa focus. Africa was covered in other discussion groups, on the theme of its rising consumers. Notionally, such market forces -- not state regulation -- are or will be the most sustainable drivers of business sustainability and corporate responsibility. Yet there is a risk here: trends in this area, combined with new expectations that business will directly contribute to the development agenda, are good for articulating the nature of corporations' responsibilities or abilities, but can tend in the process to obscure those of government.

Policies and politics can be a big part of the 'global problems' we're talking about. These debates tend to focus on corporate responsibility whereas inherent in the issue is delineating that by reference to the relative spheres of responsibility and action belonging to governments. (We should also ask how influence across business-government lines can shape where those lines are drawn and in whose favour).

In Africa at least, this focus on government's duties and the governance of responsibility is as important as being pragmatic and imaginative about unexplored roles for business to improve the provision and protection of public goods (see this recent post, here). Moreover, we must acknowledge how much harder it is to get business, government and civil society working together on 'global problems': it is not just a case of saying 'only connect' (I ranted about this point here).

If the optimists' case proves true (enviro, social and governance issues become fundamental business principles fully integrated into valuation and value-definition) then with a redefined 'bottom line' we will have come full circle to Milton Friedman's controversial thesis that the social responsibility of business is simply to continue to succeed.

The focus would then again be more balanced on the responsibilities of governments and indeed consumers-citizens: expecting corporations not to deepen global problems, supporting enterprising ways to solve those problems, but understanding that these are too big and complex for any one arm of society to solve alone.

Jo

ps - The panel also dwelt on how the question of business responsibility for public goods is increasingly inseparable from debates about proper forms and levels of taxation. I mention this just to free-kick an earlier post on this issue in Africa: here.

* Oxford Analytica was my previous employer.

Business and Africa's development: an agenda

Pre-Autumn Oxford, and this week a new grad student moved in next door. So this post gets nerdy on the nexus of responsible business and responsive government in African societies.

The topic is big, but if this blog's themes were translated into a research agenda, what might be some principal questions?

I try below to list 10 hypothetical thesis research topics. They are not the 10 biggest questions around 'Africa Rising' generally. Partly this reflects an implicit call on what issues relate to a public role for the private sector, and which are firmly matters for government only: this blog is not about public policy in general. Many of the issues affecting Africa's trajectory are global ones even if they have important localised impacts, from climate change to negotiations on trade barriers.

Instead the list is an exercise in indulgence were I to be one of these new post-grads choosing a topic.

You will notice that some of them are essentially diagnostic: where are we now? There's a reason for that. Working on medium- and longer-term upside scenarios for Africa's unlocked potential -- generally or by sector -- is very interesting work. There is quite a bit of it, and every few months more glossy reports. Yet the trick to such projections is basing them in accurate stock of where things are now. The paucity or unreliability of data make this no easy task -- as Morten Jerven has continued to show.

Taking stock, deciding baselines, and building scenarios requires, of course, asking the right questions. So does the task of imagining the 'upside' -- what does it comprise, what does it mean to conceptualise steady growth that is inclusive and sustainable?

Well, here are 10 topics. They are not necessarily in order of priority. They are framed brief and broad as research questions, albeit ones with a degree of abstraction (macro-level) and with a heavy policy rather than academic or conceptual dimension.

1. 'Inclusive growth': What is in fact happening to income inequality in the region's major economies -- is there any role for business on this issue in fast-changing markets, or is its social responsibility only to grow? More generally, how can tax system design in African conditions best balance private sector incentives with public goods imperatives, and how do we institutionalise appropriate public-private dialogue on tax issues?

2. 'Africapitalism': Is there any evidence of an emerging identifiable 'African' model of private enterprise with smoother edges in terms of sustainability and social + environmental impact, a model consistent with prevailing political ideas of the developmental state ... or is 'Africapitalism' just a neat phrase with no real content, in economies whose structural patterns are well entrenched?

3. 'Business and development': Policymakers valorise small and medium enterprises, but what do we really know about their impact on job-creation and poverty-reduction in Africa? Assuming we know this, what can realistically be done about financing, regulatory and other obstacles to local business creation and continuation on the continent -- how can donors, lenders and big business help?

4. 'Business for development': Related to 3, in what ways can systematically engaging bigger business in the sustainable development and inclusive growth agenda help, including by linking informal or smaller-scale actors into bigger value-chains? Why is this proving so hard? Where has rhetoric on private sector engagement yielded significant results capable of sustaining replicable models?

5. 'Innovation: nothing new?': Mobiles (and related platforms) have had a significant impact in Africa, including in ways that address or leapfrog altogether some stubborn development bottlenecks. This continues to spurn a lot of hype about Africa's 'digital lions' and the transformative potential of the internet in African economies. Yet what evidence is there about links between private consumption or public investment in / of ICTs and significant change in core areas of the economy such as agriculture? How might the internet/digital/knowledge economy prove truly transformative? Or is the current donor buzzing around innovation and ICT only going to prove a distraction from education and skills issues and from addressing some basic infrastructural, policy and regulatory barriers to growth in traditional sectors?

6. 'New investors': What evidence is there that Chinese and other investors have an inferior social or environmental footprint in Africa relative to other (Western) firms? On the basis of this, what scope still exists to shape 'new' investors' approaches in ways that promote ideals around sustainability, good governance and human rights?

7. 'Future-proofing cities': In what ways are business and governments (including sub-national governments) working together to address service-provision and other shared issues in Africa's more significant fast-growing urban areas? What can be done to scale-up some of these initiatives, and how do they relate to broader national and donor development strategies, including in terms of being coherent with rural development issues?

8. 'Public-private partnerships': What pro-development role do PPPs really have to play, what is their record of success, why is there reluctance on either side, what could be done to ensure they meet the potential often attributed to them? In particular, recent high-level summits have called for innovative public-private financing mechanisms to 'share risks while maximising financial returns alongside development impact' (a tall order ...): what models work / might work, what can be done to ensure they're taken up especially for public infrastructure funding?

9. 'Farming fundamentals': Perhaps I am biased, but it seems to me the focus on Africa's urban consumer classes, youth demographic, urban labour surplus, manufacturing potential (etc) is still wide of the main mark. That mark is agriculture, and related value-adding services and industries. What does the last decade really tell us about the scope for private investment in these (very diverse) sectors to have significant developmental impact, in particular through bringing in smallholders?

10. 'Fragility and prosperity': in what specific ways does donor and government policy towards private sector development or engagement require adaptation for countries and areas affected by fragility, conflict and violence? How do we attract reputable firms to risky places? Does major investment necessarily increase human security in fragile regions, where might it have had the opposite effect?

There are any number of other questions and re-framing of the listed ones. There it is. The potential and problems relating to Africa's women and girls mean that the listed things could benefit from a gender dimension.

Responsible policymakers and investors would be asking essentially the same questions about the nature of the continent's growth path: one question underlying all those on the list is how to foster responsibility and attention to longer-term horizons within government and business. That challenge is hardly unique to Africa.

Jo

'The sustainable business of government'

Corporate sustainability experts on Africa are right to recognise the state's important role, but wrong to assume that the issues are only apolitical ones of capacity and know-how.

Toby Webb's recent piece for Ethical Corporation addressed a major theme of this blog, when he wrote on big business in developing countries engaging host governments on longer-term sustainability issues.

Webb was right to the extent that he implies that however good a firm's sustainability and impact practices, policies and programmes are, scaling-up and sustaining these things requires the governance and other contributions of a cooperative and capable regulatory state. His post was unobjectionable on a number of other fronts, particularly the need for systematic engagement by firms (including in sector or cross-sector coalitions) with host governments on development impact issues.

However, I'm not entirely sure about the premise of his post. (He also runs together developmental impact with political risk exposure, for example referencing GSK's woes in China, in ways that avoid addressing how these things might be linked).

The premise of his that I'm not sure of has two legs.

First is that officials in developing countries are out-of-date and simply not aware of current business-and-society trends, so that if firms simply engage with and 'educate' their hosts, relations will run smoothly and big business can pursue sustainable, pro-development practices.

Second is the related implication that there is (as he writes) a "right role for business" in meeting social goals, an uncontested obvious balance, an ideal business-society-government model that can get on with sustainable development if only the ignorance and incapacity of host government officials could be addressed.

This is naive stuff from someone with such experience in sustainability issues. At least in the African region I know best, questions around the role of business in society -- and its delivery or regulatory role relative to the state -- are deeply political (not technical), open and unresolved (not simply 'obvious-but-not-known-about-yet'), and hardly 'fixable' simply by educative engagement.

For example, Webb's suggestion that officials retreat into populist regulatory postures simply because they have not yet been exposed to the gospel of modern sustainability practices is both highly patronising and naive about the political uses that local officials and politicians will continue to make of big business and foreign investment.

Some of these issues are certainly amenable to moderation by greater dialogue, trust-building, role-allocation and so on between big firms and host governments. But Webb is wrong, at least in Africa, to suggest a 'right' business-government-society model sits out there, waiting for firms to enlighten their hosts about. Just as Tony Blair was wrong in 2012 to suggest Africa had reached the 'end of history' and was now awash in consensus on the 'right' models of governance (see this 2012 post critical of Blair).

The point is that vital issues around responsible and sustainable development, and the relative roles of business and government in relation to public goods, are not advanced by assuming that what we have is advanced, enlightened firms and backward, ignorant host regulators and officials. Nor is there one right way.

These false premises aside, then yes the sustainable development agenda certainly requires more systematic and strategic engagement between firms and host governments at various levels (subject to this recent post questioning the value of simply asserting the need to 'engage'!).

In the same way, regulatory incapacity is a real issue and there is a role for big business in building the capability of host governance institutions, as outlined in this post over two years ago.

Jo

'Engage or fail'? Stakeholders in African investing

Africa investment risk advisers can sound good and play it safe by merely stating the obvious.

Yet the obvious is never pure and rarely simple. If it were otherwise, such advisers would find little demand for their services.

A recent report by FTI Consulting warns that investors in Africa risk failure if they do not 'engage' with government and social stakeholders: here.

Two remarks here. The first is that this is not new insight. The report calls itself -- and the strategy of engagement -- 'a new approach' to risk management in Africa. Well, not quite.

True, directly invested firms, especially in time- and capital-intensive sectors such as mining, have over time shifted towards seeking positive social impact, rather than just attempting neutral impact, mitigating negative impact, or not considering local impact at all. They have faced pressure to do so, on various fronts. To shift effectively they have had to re-conceptualise their relationship to host governments and communities. Some have also sought to see this embedded-ness as a value-creating exercise not just a risk-managing one. Still, it is a bold consultancy that presents as a new idea the notion that firms might further their objectives by engaging their host governments, and might protect and enhance their long-term value proposition by deepening their social license to operate through various forms of local inclusion, investment, outreach and disclosure.

The second remark is that consultants do their clients a disservice to simply state the obvious ('engage with stakeholders' ...) as if (a) the process of doing so will be self-evident, (b) the consequences of enhanced engagement are always manageable and foreseeable, (c) the identity of relevant stakeholders is clear and (d) these stakeholders are passively awaiting engagement by corporates and have no mixed feelings or motives of their own. None of these is typically the case in fact.

True, responsible firms with long-term plans in African localities would be well advised to pursue more deliberate, strategic and intensive stakeholder engagement. But the FTI report frames this as a risk-management strategy, when in fact the process of expanding and deepening links to host governments and social groups is neither easy nor risk-free. Few serious firms in Africa would read such a report and say 'Thank you -- it had never occurred to us to reach out locally'. They are far more likely to say 'Yes but it is hard, who is who, what do stakeholders really want, is this our role, where does it expose us?' and so on.

Reports such as FTIs make it seem as if not engaging is risky, but simply 'engaging' solves all social and political risks. That is far from obvious. 'Engaging' can itself become the source of (ok often manageable) risk. It assumes governments and communities speak with one voice, know what they want, understand firms' viewpoints, etc. Now these things are better handled by firms adopting an explicit pro-engagement mindset, actively seeking to find shared ground with authorities or other stakeholders, or delineating the extent of their responsibility. But merely calling on firms to 'engage with stakeholders' tells them nothing about how to do so, and suggests a far easier, smoother process than ever exists in fact.

I say all this partly because of my own fatigue (and my perception of generalised fatigue) at the constant refrain about 'engaging'. It heavily marks the whole area of sustainable / responsible business, and of cross-sector cooperation on development issues. My own blog goes on about it. So does a policy brief I wrote, published last week, on engaging the private sector in peaceful development in Africa. Yet I think a healthy dose of realism is required.

We use 'engage' as a short-hand, convenient phrase in the context of business-government-social relations because our intuition and ideals tell us it is better (for development impact, risk management, etc) than non-engagement. Yet it is far easier to call for than to do. Too few in my field seem prepared to admit this, as a recent post in effect noted, as did another post on enthusiasm for the act of public-private 'partnering'.

Last week's post made the same point in relation to NGO-business collaboration: on balance productive and advisable, but hardly a smooth ride.

Jo

Post-script:

The FTI report's mini-poll of WEF-Africa attendees does reinforce a good point: foreign investors in Africa have a long way to go in communicating better with / to local stakeholders. In previous posts (see 'Corporates, Communities, Communicating' here) I've noted that firms involved in the bumpy African growth story can improve their messaging about the nature of the constraints they face, their limited ability to meet social demands, the delineation of their responsibilities from those of government, and so on. High expectations of firms (individually and as a class) are a source of risk, both directly and in feeding arbitrary and/or populist-placating fiscal demands and regulatory actions.