'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 

Africa: the use and abuse of 'innovation'

No-one wants to be heard to oppose 'innovation'.

It is not fashionable to suggest that the search for new approaches, whether in business or policy-making, can perhaps distract us from honest analysis of why conventional approaches are not working.

While the 'innovation!' cry seems everywhere at present, it is not often clear what it means to foster innovation in any field.

This is so, too, in relation to the issues often covered in this blog: the regulation of responsible business in developing societies, and the governance of public-private development cooperation.

Implicit in that call, of course, is a recognition that conventional approaches are not working. 'Old' approaches (for example, to promoting the rule of law in other societies) are often conceptually sound but face enduring barriers in practice. No amount of privileging innovation over implementation might be able to surmount these barriers. Yet the prevailing 'innovation' rhetoric can hold out the false promise that these barriers might be side-stepped altogether.

We hear a lot about the need and/or scope for innovative approaches to unlocking Africa's potential. I'll call this the 'innovation trend'.

In parallel is current rhetoric around Africa as a continent whose poorer and unemployed millions are best understood as would-be innovators and entrepreneurs. I'll call this the 'innovator trend'.

In development policy circles, the rhetoric of the innovation trend is undeniably positive. It supports a perspective that seeks potentially transformative break-throughs and short-cuts. The innovator trend is equally positive: it has an empowering intent that casts the continent's poorer people as having economic and development agency and potential, rather than as mere passive recipients or observers.

First, the 'innovator trend'. The goodwill that accompanies current portraits of the continent as full of latent 'innovators and entrepreneurs' has an unintended dark side. Many millions of Africa's rural and urban poor are not 'innovating' but simply trying to secure less precarious livelihoods; to cast them as incipient entrepreneurs is less condescending and opens the way for (self-)empowering approaches. But it can also represent a denial of the reality of poverty, and of the political context for addressing it.

I wrote on this recently in something published by the Bertha Centre for Social Innovation at the Graduate School of Business at the University of Cape Town, South Africa: here.

Turning to the 'innovation trend', it is becoming rather skewed. By 'innovation' in African development is typically these days meant technological innovation, and increasingly digital / IT tech-based innovation. The field is attended by what I think is unfounded hype about the transformative potential of IT tech-based solutions.

In particular, much of the excitement around at present is based on unsound analogies that take mobile phone sector trends in Africa and, from these, project that the continent's new dawn is not only at hand and handheld, but is less than a finger-length away. This conversation suggests that if only the right technologies and ap's could be designed and scaled-up, in development and growth terms Africa would soon join Asia, and then overtake Scandinavia... This is not helpful even if it is uplifting.

I noted (or rather, ranted) in a previous post that one cannot necessarily 'leapfrog' all development, governance and growth problems in Africa simply by waving the wand of 'innovation'. Nor are there tech-based solutions to the political, policy and governance issues that are inseparable from refashioning whole economies and societies.

Innovation vocabularies in the African development context have a negative dimension. By placing emphasis on hopes for tech-based quick-fixes to enduring developmental challenges that require conventional reform efforts, the turn to 'innovation' rhetoric might in fact represent a form of fatigue.

If so, championing innovation also smacks of a form of desperation in the face of enduring conventional bottlenecks, barriers, deficiencies and dysfunction.

I am not saying that innovation is easy, only that development is hard...

Jo

ps -- here is a previous post, reflecting on how corruption is a form of 'innovation' -- a new way around systems that are not 'working' in the eyes of some who have their own motives. How does a society capture the evident social capital that fosters innovative corruption and harness it for pro-social outcomes?

Business and human rights: mind the gap

Is there some risk that the current greater attention to the human rights responsibilities of business misses the mark?

Last week here in Oxford I chaired a session at a 1-day meeting on the evolving normative framework on the place of transnational corporations and other business enterprises in international human rights law.

I put aside here all the debates about the form and pace at which further international legalisation might occur in this area.

Instead I return, at risk of repetition, to a steady refrain of this blog.

This is the argument that society is justified in narrowing the 'governance gap', that is in seeking to make the social responsibilities of business actors commensurate with their levels of influence. But it should avoid doing so in ways that tend to obscure the principle that governments are and should be the primary duty-holders. In human rights terms, it is tolerably clear that whatever the responsibilities of non-state actors, the state has certain duties to protect, respect and fulfill human rights -- including by regulating the activities of business actors that have an impact on those rights.

This is a cousin of the argument, also typical of past posts (here), that the current attention to the private sector's role in helping meet sustainable development goals is welcome and/or inevitable, but should not result in shifting the burden from states.

How did last week's meeting prompt this return to something noted in recent posts (see for instance here)?

It seemed to me that some participants at the meeting had lost a certain perspective on the source and nature of the bulk of unfulfilled or violated human rights in the world. At some points some participants painted corporations as responsible for the bulk of unmet needs and abused rights in the world. Now there is undoubtedly a serious mismatch between companies influence and their degree of accountability and responsibility, but they hardly account for the most serious human rights abuses evident in the world today, and are to my mind certainly not obviously responsible for public goods that might fulfill human rights.

Participants' desire to find ways to close the governance gap cannot be faulted, but I wonder if we're seeing something else happening in recent years. In the field I work in, 'business and human rights' has become far more topical, attracting funding for advocacy and capacity-building programmes. This is welcome, especially considering that the issue had been under-scrutinised.

Yet even if one considers 'human rights' to involve the full range of social and economic rights (such as a right to education) and not just civil and political ones (such as a right to freedom of speech), and even if one acknowledges the huge influence that business entities have in the world and on the shape of its governance, this does not alter the facts. The great bulk of the aggregate of abused or unfulfilled rights in the modern world result from the acts or omissions of states -- including the omission to regulate abuses from non-state sources such as corporations.

To focus advocacy campaigns on what business should be doing to protect human rights is a justifiable strategic decision for a rights advocacy group. It is after all an area I work on myself. It suffers from widespread lack of awareness on the part of governments, businesses, victims. Yet more than once in recent months I've had the sense that the human rights movement has found a new issue and, frustrated with the intransigence or incapacity of governments, might pursue the wrong point in its growing focus on business and human rights.

The main point is the duties of states, not the responsibilities of corporations. To argue otherwise is ironically to afford business actors far more significance and legitimacy than makes sense for those trying to narrow the 'governance gap.'

Jo

Compliance fatigue and sustaining sustainability

Is the proliferation of disclosure and reporting schemes capable of undermining efforts for more sustainable, responsible business?

Now, it is very hard to refute the merits of the 'disclosure revolution' on environmental, social, and governance (ESG) issues that has come in recent times at least to major Western listed firms.

The merits are fairly obvious. The more we and the market know, the better we can ascribe meaning to a firm's value proposition. The more a firm knows about its own ESG impact (through committing itself to data collection, analysis and disclosure), the better it can address potential disruptions and problems in its operations or supply-chain. Do well while doing good, etc.

The same goes for the proliferation of voluntary, hybrid or other multi-stakeholder, quasi-regulatory schemes for addressing issues ranging from a firm's impact on local insecurity to transparency around revenues paid to host governments.

In this light, the recent announcement by Unilever of a new human rights reporting and assurance framework is good news, and consistent with the due diligence elements of the UN 2011 Guiding Principles on Business and Human Rights.

One would hardly want to curb the energy and enthusiasm evident around institutionalising the responsible business agenda within corporate systems and cultures. Yet it was that announcement that prompts this week's post. Because there seem to be so many schemes and initiatives and regulations and conferences that I imagine the landscape now is becoming somewhat bewildering even to a well-meaning executive within a major publicly-listed firm.

(A related issue is the proliferation of single-issue charity, aid and advocacy groups: that industry now talks about engaging with business but might require some rather hard-headed business strategies to reduce the over-heads and donor fatigue associated with organisational proliferation, and focus instead on delivering social value 'at scale'. But hush -- the same could be said of proliferating blogs...!).

I cannot put a finger on it, but do think there's an issue with this flowering of schemes and initiatives, in terms of strategic considerations relevant to the business sustainability / responsibility agenda, such as the resources and attention-span and goodwill of corporate decision-makers.

Instead of carrying on further, I refer to a post from pre-Christmas 2012 (here), on proliferation and fatigue related to the many initiatives on responsible and sustainable business.

See too this recent piece in The Gaurdian on how over 2,500 different metrics are in use for measuring and reporting supply chain sustainability.

It is true that reporting on 'non-financial' issues can serve a commercial and risk-management purpose and is increasingly being incorporated into core business strategies; it is true that leading firms think beyond compliance to how the sustainability agenda can be an opportunity to create both social and commercial value; it is true that there is a counter-trend to this proliferation, where broader concepts such as 'materiality' are being deployed rather than  endless multi-indicator checklists and indices. It is true that the field is evolving and emerging, and this flowering of schemes and requirements may settle into something more sustainable and manageable without becoming complacent or quieted.

Yet this proliferation phenomenon is relevant (or is perceived as relevant) to compliance burden and cost, and so to the competitiveness of responsible business and finance (see here, a past post on regulation and values amid perceived strategic competition for access to markets and resources).

Now I believe there is no necessary trade-off between being responsible and being competitive when investing in developing regions. Indeed in time one might only be competitive through being responsible (and being seen that way).

Nevertheless the perception remains in those places inside firms and funds where it matters.

Those interested in promoting sustainable and socially responsible business practices ought to reflect more, I think, on whether the proliferation of schemes and reporting processes is confusing 'the means' with 'the ends' in ways that do not advance the end goals. 

Jo

See too this past post reflecting on who the audience is for corporate sustainability communications.

'Business for Peace'

What drives current expectations that the private sector will play a more direct role in ensuring more peaceful societies?

This week's UN Global Compact 'Business for Peace' event in Istanbul is part of a growing field, as it were.

This field is dedicated to exploring the unrealised potential for business entities, communities and actors to contribute appropriately -- in more explicit, direct or deliberate ways -- to conflict prevention, mitigation or resolution in particular situations or more generally, and especially in fragile or divided societies.

This is the topic of my forthcoming book Regulating Business for Peace by Cambridge Univ. Press. There is a big, complex and evolving research and policy agenda here. There are plenty of ways into the debate, too, from practically-minded policy prescriptions on how businesses (and their financiers, insurers, etc) can be more conflict-sensitive in their operations and supply-chains, to understanding what incentives might help to promote responsible but competitive investment in fragile states.

These issues are topical, and highly relevant in much of sub-Saharan Africa. I could blog on, book and beyond, but instead think one observation is important. Much of the 'Business for Peace' / business and peace / business and conflict debate focuses on what business actors should do more or less of or do differently, and under what circumstances. To my mind this partly misses the issue.

This focus on business responsibilities or opportunities to help promote or consolidate peace is driven by various things, and is part of a wider shift in the expectations of business in society. In large part it is driven by recognition that more can be drawn out of the peace-relevant influence, incentives, impacts and attributes of the private sector; in some ways it is driven by business leaders' own sense of the need for the private sector to be more proactive in ensuring the sorts of peaceful, prosperous societies conducive to sustainable growth.

Yet what can be lost in this focus, and at events such as Istanbul, is that the proper way to frame this issue is not 'what can business do for peace and how' but surely 'what must public policy do to maximise the scope for business to contribute to peace'.

This is really reiterating an earlier post this year: here. It also is a theme of other posts that reflect on how business has gone from being an ignored stakeholder in the development agenda, to a presumed panacea for developmental problems.

To express caution on taking 'business for peace' too far is not to deny the scope for business actors to do more to mitigate conflict risk and maximise social cohesion. It is not to bring everything back to policy or make any worthwhile initiative contingent on government action.

Instead it is to recognise that the greater focus on the role of business is no substitute for recognition that business has limited scope, incentives, legitimacy (etc) for peace-building. The growing enthusiasm for realising business's unmet peace-building potential should thus not obscure that the primary question is a public policy one; the primary responsibilities rest with governments; any failure by business to contribute more positively (or less negatively) to peace is ultimately a public policy failure.

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

Business and disaster response

The role of for-profit entities in humanitarian response situations raises a range of policy questions.

Much of this part of the world goes on summer holiday at this time, amid a range of confronting stories of humanitarian crisis, from Syria to South Sudan. One question is the private sector's role in preventing and responding to disasters.

This brief post offers some reading on the issue. The literature on this took off, in large part, following the 'Boxing Day' Tsunami of December 2004, given in particular the role of global logistics firms in responding to the disaster. The critical literature has a somewhat longer vintage.

The thrust of Naomi Klein's 'Shock Doctrine' (2007) is that a malevolent but mainstream strain of 'disaster capitalism' thrives on such situations.

Compare, from the same year, Binder and Witte's assessment of key trends and policy implications  in relation to business engagement in humanitarian relief.

Here now is a major report on the topic, published this month by ODI researchers.

If you prefer, see this UN news service summary of the research (here). The summary is right, I think, to focus on the pervading legacy of distrust of the private sector by humanitarian agencies and staff. It is also right to note that the search for sustainable, innovative relationships is hampered by the tendency to nominate the wrong people to front up to the private sector or aid agency (as the case may be): humanitarian groups send their fundraising officials to talk with business, while corporates assign the role to public relations officers.

If short on time, here is an op-ed media article by one of the ODI researchers.

The research tends to make insufficient distinctions between acute humanitarian emergency situations, and (longer / slower-burning) periods of post-conflict or post-disaster recovery. Many of its examples relate to situations of chronic under-development, poverty, marginalisation or vulnerability that do not amount to humanitarian emergencies. The ethical, commercial and other considerations of for-profit engagement are not the same for such settings, clearly.

Distinguishing between forms of involvement also matters: firms that respond to natural or man-made disasters (and the line between those is often blurred) may be doing so as donors, partners, contracted service-providers, pro-bono service-providers, and/or out of considerations of strategic self-interest that are not necessarily inappropriate.

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

Africa, 'rising powers' and responsible investment

'The private sector' covers a huge variety of actors. Debate on responsible business, and on engaging business in development, can tend to gloss over this.

The vast majority of stuff written on these topics clearly has in mind only large Western listed companies, yet seldom clearly states this focus-choice, and even then treats such entities as a fairly coherent class. 

There is not enough attention to how different industry and finance sectors have very different incentives, regulatory levers, risk-appetites (etc) in terms of responsible and/or conflict-sensitive business conduct. Within sectors too there is typically significant variation among in how different firms deal with these issues, including variation among firms of the same 'nationality': there is too little good research that demonstrates how this is so (Luke Patey's Sudans oil sector work 2005+ is an example / exception).

Likewise, as argued previously -- and despite the first-glance attractiveness of the proposition -- there is insufficient empirical basis for the assertion that listed OECD-country firms generally have a superior enviro, social and governance footprint in developing countries than Chinese and other firms.

Evidence-based arguments on such things are vital to wider strategic debates about leveling the regulatory / responsible business playing field among foreign investors in Africa. Awareness of the varying capabilities, propensities, motives etc of different business sectors and firms is a good place to start in the advocacy, design, implementation and monitoring of responsible business mechanisms.

This week I'm at a DFID-sponsored workshop of a longer-term project on mega-projects, 'new powers' (BRICS) and conflict prevention in Africa. One of the (academic) questions I think that our research must engage with is the relevance of investors' national origin, ownership (state or private), form of incorporation, etc., to their varying amenability to regulatory overtures intended to mitigate conflict risk and other social harms.

This is a link (here) to a recent paper making the somewhat contrary point, too: that from Africa's perspective it matters not whether investors are Norwegian or Nigerian, Chinese or Canadian. What matters is their capacity and inclination in fact to contribute, within what can reasonably be expected of them, to inclusive, peaceable and sustainable development.

Also this week are two similar events in London on country and corporate uptake of the UN Guiding Principles on Business and Human Rights, adopted three years ago this month. One event looks at 'due diligence' requirements. The other I'm attending and looks at the contribution of multilateral schemes to compliance with such standards in conflict-affected or at-risk areas (see #bizconflict).

Like some of the re-emerging debate on the necessity for, desirability and feasibility of an attempted negotiated treaty on (the state duty on) business's human rights responsibility, such events in the past have often (to my mind) featured well-meaning advocates who tend to speak of 'business' or 'the private sector' as some alien out-there but coherent social force rather than a dizzying array of commercial actors and interests which happen not to be governmental or non-profit. Hence the sense that advocacy and regulatory design could account more cleverly for variation by sector and other criteria.

Such events also naturally focus on Western listed privately-owned firms. But they thereby risk omitting those state-owned (and other) firms from 'rising powers' whose activities are of high significance to development in sub-Saharan Africa. When attention at such events does turn to the latter, the assumption is that Chinese and other firms have poorer records on relevant social impact and development indicators. Again, this assumption lacks a solid empirical basis.

The first step to influencing responsible business activity is to understand 'business' and how it is operating in fact -- wherever it is from.

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.

NGOs and business: critics to capacity-builders

The promotion of responsible business practices in Africa will benefit from NGOs not just criticising firms but engaging with them along the value-chain.

Last week the deadline passed for US-listed companies whose supply chains may involve so-called 'conflict minerals' to submit certain plans to the stock exchanges regulator. These plans explain how they intend to ensure that their products will not use minerals mined in conflict-affected areas marked by force-based labour methods and serious systematic human rights abuse. For an accessible overview, see this BBC report.

That these regulations exist at all (*) is largely the result of long-running, intensive campaigning by groups such as Global Witness. Often this has involved exposing firms who know of (or unreasonably undertake no due diligence in relation to) the problematic social context of their supply-chain inputs.

In an open, democratic society where much of the aggregate of social power is wielded by private individuals and entities (and where state regulatory capacity is stretched or distracted) there must always be a place for organisations committed to critical monitoring and advocacy around corporate responsibility for enviro, social and governance impacts.

So critical advocacy, shaming and boycotting have their place. However, they do not necessarily result in solving the underlying problem.

In particular, these are strategies that tend to assume nefarious motives or indifference on the part of firms. These strategies do not account for the possibility that corporate non-compliance with responsible business standards may be a result of lack of capacity and/or understanding, not a lack of will.

In the same way, an advanced society needs a capacity and will to punish certain criminal conduct, yet acknowledges that a more constructive, problem-solving, restorative approach is needed to change behaviours. Regulatory theory tells us that the best-adapted and appropriate systems are those that not only tell or incentivise regulatees to comply, but also devote time and resources to helping them understand what counts as 'compliance' and how to achieve it (or indeed to go beyond compliance, through continuous improvement).

Of course, NGOs have for years (and increasingly in the last decade) engaged more closely with business in pursuit of shared objectives. The Aspen Institute report on the future of non-profits' ties to business pointed out the merits and drivers of this trend over a decade ago. (For a recent overview of these trends, see here and see FSG's report 'Ahead of the Curve' on the international NGO of the future, including its need to engage business more readily in achieving civic aims).

What is different, and to be welcomed, is the greater recognition by NGOs and civil society coalitions that compliance with supply-chain integrity issues is often complex, and that many firms may need advice as much as criticism. This is true, as said, of regulation generally as an activity.

The greater the degree of engagement and cooperation by a non-profit, the greater the risk (from the non-profit's perspective) of 'capture' by corporate interests, or the loss of authority credibly to assess business compliance. Where engagement is intended to help overcome obstacles to compliance, these are manageable and acceptable risks considering the nature and scale of challenges at stake, and the convergence of corporate and civil society interests in addressing these.

One recent primer in this regard is Corporate Responsibility Coalitions, co-authored by Jane Nelson, on new forms of alliance for more sustainable capitalism.

Firms across sectors and up/down supply chains are seeking alignment of responsible and sustainable practices -- and often NGOs can help catalyse these inter-firm relationships; indeed, many firms learned from their tentative relationships with civil society partners how also to reach out to ostensible competitors or other firms on shared issues.

Firms can, strictly speaking, point out that it is for the governments of developing countries to regulate social (etc) impact issues, such that compliance failures ultimately reflect the state's failure. However, such a response is unlikely to satisfy critics -- or increasingly discerning consumers, financiers and insurers, at least in the West.

Yet as an Economist article noted last year, NGO-business partnerships and collaboration is good for society (and business), but these relationships are often messy, tricky, difficult, unsatisfying.

Jo

(*) Note, the US Supreme Court recently ruled on the application of the Dodd-Frank Act in relation to the regulation of conflict minerals in US-linked firms.

The Business of Development: rhetoric and reality

Development policy has gone from largely neglecting business as a stakeholder to seeing public-private partnerships, or indeed the private sector generally, as a development panacea.

This post comes from Brussels, around a meeting on the private sector's role in post-conflict recovery and peacebuilding. When I began researching that topic in the mid-2000s, it was very hard to imagine high-level policymaker interest in engaging business in peace and development initiatives. 

That blindspot is now narrowing and ambivalence towards the private sector is lifting in the UN system and other relevant agencies. Business is increasingly accepted as a development stakeholder (at least in high-level summitry, if not yet among all development agency programming staff). This shift is documented [cue here a shameless plug ... ] in my forthcoming book Regulating Business for Peace (CUP).

Yet it is hard to escape the feeling that policymakers may now be over-compensating. The increasing rhetoric tends to conceive of engagement with business (public-private dialogue, cooperation and partnership) as having far more developmental significance than is merited given the difficulty of workable partnerships and alignments, and on the evidence to date of productive engagements to this effect. This includes evidence about the limited inclination and interest of business (beyond some Western corporate leaders) to become more explicitly involved in the development agenda.

Now, for the record there is no doubt that greater engagement with the private sector by African governments, donors and NGOs holds considerable promise for finding common interests and alignment of objectives. The promise is of cross-sector cooperation that enables scaling-up the developmental impact of core business activities, while simultaneously addressing the bottlenecks and deficits that business leaders see as inhibiting more sustainable, inclusive growth.

Many previous posts have touched on aspects of this potential. Indeed TPI's recent 'roadmap' on systematically engaging business so as to unleash (and harness) its developmental impact took this convergence of interests as implicit, such that it instead focused on what to do about implementing the new-found appetite for engagement.

This post, as a reflection on this heightened interest in a public role for the private sector, groups some earlier posts expressing caution in approaching the new-found enthusiasm for seeing the private sector as a development panacea: see a previous post arguing that not everything can be solved by partnering; one noting that the state and its capacity problems still matter in ways that cannot be ignored by pointing to partnerships' potential (since partnership implies state capacity) (here), a related post here; a further caution to avoid seeing the private sector as a magic wand in Africa's development (here); and misplaced enthusiasm for public-private partnerships as likely or capable of carrying the expectations placed on them (here).

The focus by African policymakers on scaling-up the development impact of business risks obscuring an enduring fact. The greatest development contribution that business can make is still to expand, employ, pay tax (etc), in sustainable and inclusive ways, as for-profit entities. While 'development policy' naturally and rightly looks to directing business growth in pro-social ways, Africa's poverty-reduction priority in relation to the private sector is still to foster flourishing sustainable enterprise. We should be looking for alignments, but not at the expense of attention to policies to support successful businesses capable of supporting the expectations currently placed on them to help transform the continent's development outlook.

Jo

WEF Africa: leapfrogs and left-behinds

One can seek short-cuts on long-term problems. But for all the excitement about innovation in Africa, one simply cannot 'leapfrog' all problems.

There is much enthusiasm about the scope for technological innovations and related information-sharing platforms to unlock Africa's growth, development and even democratic potential.

Much of this enthusiasm is justified and good. A hot-off-the-press example of this is a recent post by Michael Hastings on why technology-based 'solutions' for health, education, financial services and other issues provide major reasons for optimism about Africa.

That post relates to this week's World Economic Forum (Africa) in Abuja, Nigeria (7-9 May). 

This event also reveals, and champions, considerable business and social innovation in contemporary Africa in order to resolve / avoid infrastructural and developmental bottlenecks, scale-up markets, reach new consumers, provide new services, and so on. Some of the innovation is in terms of new forms of relationships (principally between business and government) for achieving inclusive, sustained and sustainable growth in Africa. Some of these are innovative relationships around innovative technologies, such as increasing government transparency through making more public documents available online.

As said, this is very well and good: may a thousand million centers of energy and daring send ripples of hope and waves of green, inclusive growth through the continent. I do not say this sarcastically. For example, one solution to Africa's energy poverty (and one with considerable other benefits, including in carbon footprint terms) is the growth in off-grid localised generation and distribution networks.

Yet the mini-grid trend is itself indicative of an issue that all the WEF-style discussion of innovation, entrepreneurship, and leapfrogging cannot and should not obscure.

This is that businesses and enterprises of all sizes in Africa are, like its individuals and families, typically compelled to be innovative in many respects because of poor state capacity to provide basic public goods and services. My former Oxford Analytica colleague Hannah Waddilove remarked this week that what can be seen positively as 'entrepreneurship' for example in providing bottled water for retail is also indicative of the failure of state service-provision.

Previous posts have noted that the scope for public-private cooperation in meeting the development agenda is unrealised, as is the untapped potential for private provision of public goods in Africa. However, a theme of these posts has also been that the state still very much matters for long-term sustainable development in Africa, perhaps more than ever.

In this sense, innovation that by-passes state incapacity may be imperative, welcome, or inevitable. Yet it creates a risk that short-cuts and leapfrogs -- valorised as 'innovation' -- might have a long-term negative effect. They might result in undermining the capacity or incentive for the state to respond to, and provide for, its citizens. If we tie progress to innovation that has a primarily commercial orientation but do not 'innovate' to link this in to building more capable, responsive states, many people might be left behind (even more) when the leaping begins.

Jo

See this previous post on 'corruption as innovation' in the context of state incapacity and bottlenecks.

See these pieces on inclusive growth (here), and a post-WEF Davos one on inequality and risk in Africa's growth path (here).

See too a WEF-related post I wrote this week on the 'African Arguments' platform (Royal Africa Society), here.

Proving improvement, evaluating value in Africa

As it matures, the 'responsible business' agenda requires (and exhibits) realism alongside idealism. Indeed, it is often by getting real that ideals are realised.

Disciples of the African investing story, positive version, in my experience use a discernible mix of head and heart: citing hard numbers (yield / return), but typically often overlaying it with something of an emotive appeal to be part of something bigger, the rise of a continent and its sustainable development. In extreme cases, this appeal smacks of a guilt-trip.

Yes, many objectively appealing investments in Africa are obscured by enduring unfair misconceptions. And talk of responsible investment in Africa goes over the heads of those whose approach (whatever nice noises they make about being part of Africa Rising) resembles that of the couple in Paul Simon's song: "Soon, our fortunes will be made, my darling / And we will leave this loathsome little town..."

But for the rest (beyond a limited set of mainly mandate-based institutional investors: pension funds, endowments, and the like), heart-based appeals to invest at all in Africa, and then to invest responsibly, will not get us far ... evidence of results will.

Is it too harsh to wish for a day when advocates of investing in Africa by reference to sustainability principles feel confident enough to pitch 'do so just because it works, not also or only because you (we) think it is right'?

The realism-idealism point is that the 'field' of responsible investment / business activity both needs and is increasingly marked by greater discipline and rigour: quantifying qualitative gains, proving improvement, measuring success, evaluating value.

This professionalisation of the wider environmental, social and governance (ESG) industry / discourse is both inevitable (if it is itself to be 'sustainable'), and a good thing. One does not have to be subverted to market considerations to accommodate them, and indeed to harness or leverage them in pursuit of sustainable development.

Hence the focus on aligning ESG considerations with 'core' business or investment ones (see here), on learning and speaking the language of positive value-creation (or at least no value impairment), the focus on positive value not just risk management or compliance or reputation-building or goodness, the focus on framing as need-to-do not nice-to-do, and so on.

However, there is still a need to go beyond saying these things work, to showing they do. Too much still involves treating it as obvious that ESG is value-adding, or pleas to disregard that 'it might not be but is still probably a good thing'.

The notion of 'responsible' investment is that it will do no harm, and of 'impact' investing is that it will go further and do some good. Explicit in at least the latter is proof of impact, but investment generally seeks proof of value, and the challenge is to get conceptions of 'value' to include ESG impact as a matter of course.

Socio-enviro responsibility will hopefully move beyond speaking about the falsity of people-planet-profit trade-offs. It must not just show the approach works and is right. It must aspire to show that ESG-based approaches work because they are right and just (not despite it, as an add-on).

Governments across Africa may regulate for greater ESG emphasis, but this is both unlikely and partly beside the point of responsible investment, which is about going beyond mere compliance, and increasingly (one hopes) about seeing ESG due diligence / impact as simply part of 'investment', without the 'r' word prefix.

Discussions had lately have involved whether there something particular about social and sustainability factors relating to Africa, and a particular way of doing business there in terms of ESG factors, development impact or context. Previous posts on 'Africapitalism' have asked this. There is the dynamism, optimism, leapfrog, frontier feel / phenomenon ... but there are also some pretty entrenched structural features of political economy, and Africa Rising is now over a decade old. (There is also the generic challenge of data reliability / availability in the region).

Arguably, if 'Africa Rising' debate is to mature further, it can certainly still seek to inspire new pro-social, sustainable ways of doing business and investment, but must strive to move beyond appeals. It must construct a case that shows how ESG-based approaches add or protect commercial value (at least in the long-term). This means not appealing by saying 'seek more than yield, make a difference' or on the faith that intuitively ESG-based approaches reduce political and other risk exposure. It means maturing beyond the insinuation that if you do not invest in Africa (at all / sustainably) you're neither with it nor a very nice person, and that if you divest you are hurting its children's future. (Much capital flows out each week to secure the future of someone, somewhere else).

In this sense, there is nothing new, nothing uniquely 'African' about all this. Along with an undeniable gloss of subjective, almost sentimental factors (that is, a degree of herd instinct behaviour), capital looks impassively for value propositions.

The challenge for those interested in inclusive, sustainable long-term growth in Africa that does not mortgage its environment and ecosystems is to move, swiftly now, beyond the binary of 'yield' or 'tree-hugging' and show why it works to filter one's investments and run one's business on an ESG basis. Hard proof, the empiricism to match (and sustain) the optimism.

"Faith..." as Paul Simon's song continues "... is an island in the setting sun / but proof, yes, proof is the bottom line for everyone..."

Jo

'Partnering' business for development

In the new fashion for cross-sector cooperation, are we tending to distort the term 'partnership', applying it to things that are either just dialogue, or normal cooperation with regulatory requirements?

And alongside all the promise that lies in the convergence of public and private sector focus on shared development constraints, are there not some concerns?

Convergence and blurring are related ideas, but one has a positive sense and the other a pejorative one.

So policymakers have 'discovered' the private sector as an 'actor' with impacts and interests relevant to development. Duh. But we now risk too rapid a transition in which proper parameters and principles have not yet been worked through.

Scaling-up the private sector's developmental impact was a key theme of last week's inaugural high-level meeting on global partnerships for effective cooperation for development ('GPEDC'), held in Mexico.

This blog is very 'pro' looking for ways to unleash-yet-harness the energies (etc.) of business in support of sustainable development aspirations and imperatives. Yet one overwhelming theme at and message from the GPEDC agenda / outcomes was not really about partnering for development (in the sense of systematically looking for areas and issues where business strategy / self-interest and government policy / duty overlap).

Instead, a major focus was about shifting from external financing of development (donors) to 'domestic resource mobilisation'. That is, taxation of business activity and constraining licit and illicit capital outflows, retaining more value within regions such as sub-Saharan Africa. (See para [4], [20-[24] of the outcomes document). This is a very sound idea (see a previous post on taxing for development in Africa). Especially for heavily indebted donors, and some developing country governments which might become more democratic if they become more reliant on and responsive to local taxpayers.

But a focus on taxation is not 'partnering' with business for development, nor is it public-private development cooperation.

It is a basic function of the state to tax and spend, and a basic obligation of a firm to pay, and to complain or leave if it does not wish to. When regulatees share the regulators' vision and cooperate, this improves compliance and eases regulatory burdens. But tax compliance is not cooperation, it is an obligation. Cooperation comes where business and government enter dialogue about what the taxation envelope might consist of. Even then, this is not a relationship of equals, for a number of reasons on both sides.

It is a basic ideal of development policy to eventually wean a country off external funds to enable it to finance its own development. To do so, one wants to think less about particular partnerships with business here and there (helpful as these can be), and more about creating an environment where business can flourish, so that appropriate social shares can be taken and distributed, building a better and more sustainable, inclusive society in which (in turn) business can flourish more. Virtuous cycles, and so on.

Sure, there is scope for greater cooperation, expertise-sharing, dialogue, etc between the public and private sectors. But these are not necessarily 'partnerships'.

Cooperating to find ways to help developing countries to tax more fairly, consistently and to spend the proceeds on developmental purposes is something to be explored. In previous posts I've repeatedly noted the initially counter-intuitive idea that a major investor might help its host government improve its tax and regulatory capacity. This way business can know what its fiscal exposure is, but also know that its taxes will in fact lead to better infrastructure, a healthier and better educated population (workforce / customers), and so on. Cooperation like that is to be welcomed, and specific partnerships may help deliver it.

But 'partnering for development' should not now mean everything that vaguely relates to business. Some of those things are just 'development'. Hence the 'duh' above: why is it such a revelation to donors that business can make general and specific contributions to development goals, and may in fact be interested in more peaceful, prosperous societies?

The social responsibility of any one corporation is not open-ended. One needs only pause for a minute to know why this is a good thing: business is not accountable in ways that policymakers (in theory) are. Hence the previous post, making the point that business and government may 'partner' but are not true 'partners': governments must lead, serve, respond, take responsibility.

Excitement about 'partnering' should not obscure the state's duties, and the state's capacity shortfalls without which it cannot partner effectively.

Blurring these lines is not in the interests of business, or in the public interest.

Where government functions as it should in Africa (or anywhere), there would perhaps be nothing shocking and anti-progressive about reiterating (with caveats) Milton Friedman's adage that the social responsibility of business is to grow, employ, obey laws, pay tax ... the social responsibility of governments is to finance development by planning, supporting, taxing, spending. There is convergence, there are shared interests and vulnerabilities, but there are separate spheres, and there is value in that. Friedman had some objectionable ideas, but it is too often overlooked that he cherished freedom. Do we want the public and private spheres to blur?

This blog says that the private sector inhabits a public world, and with it various responsibilities. But that does not mean business can or should do it all, or that government can absolve itself of its duties by producing a soup of partners.

In academia, 'multi-disciplinary' scholarship is useful for cross-cutting problems, but by definition relies on people who first have a strong grounding in their individual discipline, and only secondarily have an openness to other forms of knowledge. So it is with development: each sector needs to succeed in its own sphere, while looking out for judicious combinations and efficiencies. Societies need to resolve where those spheres lie, what is private and what is public.

These are big questions of ideology and social-political preference. The current 'business and development' debate can obscure that this is so. Does business want more social responsibility? Do we want business to have more social influence?

These things need discussion, not what I call the NDL: the New Disapproving Look. One gets it these days if one suggests that not everything that matters can be solved by some or other public-private dialogue and, of course, a partnership. 'Only connect!' and all will be well? I do not think so.

On a practical level, firms and departments may not be very good at partnering, or sure about it. The NDL and the new high-level rhetoric on engaging companies and investors in development can obscure the extent of ambivalence that still exists, within both bureaucracies and corporate structures, about expanding explicit links.

As with all high-level meetings: they matter, they steer, but they are generally aspirational, not declarative. Greater cooperation is a goal and a process, but it is hardly happening all around us. Policymakers need to show both the public and potential business 'partners' why partnering is more efficient and effective. Intuitively it seems so, and these linkages hold enormous promise for dealing with development bottlenecks and business frustrations. But more proof is needed, that partnering works. 

And in Africa and beyond we must keep an eye out that 'partnering' is not a cover under which the state (realising how few expectations it can deliver on) tries to abdicate its role or responsibility, or a cover under which business (fearing the effects of unmet expectations) tries to partner so as to say 'we tried to partner'.

Jo