Business and shaping the business of government

History not having ended, somewhere out there is a perfect equilibrium of state-business-civic relationships and roles, catalysing and manifesting an ideal form of sustainable, inclusive development.

Over dinners here in Oxford I envy science-nerd friends whose research seeks (and often finds) pathways, combinations, formulas to unlock or unblock cells or substances in ways that might dramatically improve life and health. Policy and political economy hold less tangible rewards. I console myself by saying that perhaps we policy folk have a similar vocation: finding judicious and productive formulas of governance and collaboration, to unblock whatever constrains, corrupts or conspires against better social, regulatory and growth models: ideal cooperative forms mapped to suit the unique DNA of particular societies, sectors or supply-chains. 

This week's post reflects on aspects of the just-published special report on 'Companies and the State' in The Economist of 22 February.

First, the lead article states that relations between business and government are becoming "increasingly antagonistic". That may be true in richer OECD countries (on which the report focuses). However, in contrast to any trend of antagonism, arguably in development policy circles and among leading multinationals there exists increasing pragmatism, mutual outreach and cooperation in pursuit of shared objectives (see for example this previous post).

Yet there is a long way to go in convincing policymakers and executives of the propriety and utility, respectively, of looking for appropriate, productive ways to harness the private sector's strengths in pursuit of greater public goods. This post on the lack of meat to back up recent rhetoric on cooperating with business makes the point, as does last week's post on policymakers' mindsets towards a business role in public health provision. In this sense, the Economist is right to conclude its report by saying that governments and business alike "should acknowledge the fact that they are partners not enemies".

Second, the report dwells on shortcomings of taxation strategies. In poorer countries, development policy will increasingly focus on taxation issues both in terms of financing development (governments) and as a strategy to foster more responsive government (donors). See here.

Third, the report calls (as that newspaper is wont to do) for less complex and convoluted regulation in order to stimulate productivity. This post argued that in stimulating business' capacity for virtue on social, enviro and governance issues in settings with low-capacity regulators, regulation that is based on broad principles rather than detailed codes may be preferable.  

Finally, the report considers the sometimes pervasive influence on government of corporate or sector lobbying. In many mid-income or developing settings, the same imbalances exist: parts of the business community either have too much access to government or too little. One challenge in feeling the way towards the ideal sustainable development equilibrium is to institutionalise effective, inclusive, responsive feedback loops between the public and private sectors, so that 'lobbying' is not a dirty word but a transparent, regulated part of the business of governing.

This is surely because in the social science of responsible business and responsive government, the microscope reveals that from cellular to system-level, the vital, fragile, organic and mysterious substance is trust: see here.

Jo

The Economist report is here.

Private sector, public goods: 'healthy partnerships'

The provision, financing and regulation of healthcare will be crucial if the best-case predictions of 'Africa Rising' are to be realised. Private providers may have a major role.

One key variable is whether public policy is open-minded enough to catalyse this potential -- beyond just the excitable rhetoric on public-private partnerships discussed in a previous post.

While some familiar patterns and problems persists, at least two broad shifts are underway in many settings. Many governments are ill-prepared for the first one, which is largely a function of demographic and economic trends: some long-term shift in aggregate disease burden towards non-communicable 'lifestyle' and diet-related diseases (such as Type-II Diabetes) associated with the 'new urban middle classes'.

The other broad shift is an increasing role for private funders and providers, not just in meeting the needs of high-income earners, but in mass low-cost, high volume goods and services, such as micro-insurance. As is true at many levels across the continent, considerable scope remains for innovative partnering, such as in Nigeria where the government piggy-backed on Coca-Cola's well-developed distribution networks to augment its own very poor distribution capacity in relation to spreading public awareness about HIV. There are public policy risks to such interactions, partner-picking and 'co-branding', but they are generally navigable.

Again as with so many things in sub-Saharan Africa's 40+ countries, there will be plenty of unevenness, with big variations within countries and as between different countries. One risk remains a growing quality gap between private and public healthcare, although some research (McKinsey) suggests that low-income groups in some countries make considerably more use of private, for-profit health services than is often assumed.

This is enough from me on the private sector and public health in Africa, since here in Oxford is a far more qualified commentator on the topic, Dr Serufusa Sikkide, whose recent blog post notes how being pro- the private sector's role in African healthcare is not necessarily an abdication of public-minded values and goals.

Implicit in Serufusa's post is that the most important shift in healthcare in Africa -- perhaps in its development more generally -- could be the mindset shift that looks to harness appropriate private sector contributions to the state's provision of public goods.

Jo

See here for a collection of some previous posts on related themes, and a recent FT article on a recurrent theme of this blog: the wider trend of engaging the private sector in development.

There is a lot of material on this topic. The issue of service-provision is somewhat distinct from public-private cooperation on healthcare goods, that is pharmaceutical products. There is a lot going on in that sphere.

See the IFC's 'Healthy Partnerships' report (2011) on how governments can engage the private sector to improve healthcare in Africa, and see here too (2012).

See here for the McKinsey report 'Healthcare in Africa: a vital role for the private sector', although now over 5 years old, and overview reports from well-known thinktanks, the reports linked here: WEF, CGD and CSIS

Finally, see here for some thoughtful contributions on the trade-offs potentially involved in increasing public engagement with the private sector in healthcare provision, albeit in South Africa, whose healthcare landscape is not analogous to most countries further north.