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.