Building peace: what role for business?

What is proper and possible in engaging and influencing business in processes of building peace?

This week's post simply links to one written for the Cambridge University Press blog, relating to my book Regulating Business for Peace, just published.

The post is here.

Jo

For previous posts on this theme, see here.

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

Business, poverty and signs of confusion

Some skepticism of policy trends promoting the private sector's role in meeting development goals is healthy.

But there is a 'but' here.

The 'but' is that skeptics risk confusing means with ends, in ways that sound stridently pro-poor but which might occlude opportunities to harness (or unleash) private enterprise, in ways that might hold far more development and empowerment potential than the aid schemes of conventional development practitioners ... 

Take the latest Gaurdian Development Digest network's email this week.

There is a post (here) that laments the shift in development aid policy towards helping promote trade, investment and the liberalisation of markets. Whatever its merits, this makes the bizarre suggestion that "globalisation has made a tiny proportion of people better off." OK, the environment has suffered and China's sprawling migrant mega-cities may be awful -- but the author is determined to ignore the evidence that China's development has lifted hundreds of millions of people out of poverty. 'Liberalisation of markets' was integral to that process.

The confusion and contradiction among these skeptics is illustrated in the same Guardian issue, which carries a post on the challenges to attracting private investment in Africa's energy sector. Without this investment, Africa cannot create jobs, electrify hospitals, light classrooms, etc.

Attracting investment of this sort has huge pro-poor developmental implications.

Aid that helps countries erect regulatory frameworks to enable this, for example, surely cannot be dismissed as 'neoliberal' as if that easy, glib label explains everything we need to know. That is lazy, self-satisfying criticism.

It follows that (for instance) shifting UK aid policy to help improve the investment climate in poorer countries is not simply a self-serving process of diverting aid towards corporate interests.

The contradiction on that one page of the Gaurdian hub suggests that some observers want development, but only by certain means. These means, for them, must not involve any possible benefit to the private sector, local or foreign. Poor people good, companies bad.

This is so short-sighted, condescending and statist that it is hard to know where to begin attacking it.

Development targets are so hard to obtain and the ends of these development goals matter. If the means to achieving them involve opening up markets in ways that foster productivity and growth and opportunity and financing, it should at least be considered. Many development types seem instinctively, almost ideologically, to reject it.

Now, development is of course a process, not just a set of outcomes.

That is, the manner of the process matters. How things are done (participation, inclusion, etc) are as important as the achievements. Otherwise, if only outcomes and targets mattered, we would all be praising Rwanda's development achievements. The reason many right-thinking people do not is because they recognise that these goals are achieved in a political context where people are not free to mobilise to express their disagreement with government policies designed to benefit them ...  

Nevertheless, the ends matter too, at least to those directly affected by stubborn poverty traps.

It follows that if altering the thrust of development practices towards facilitating the prospects for business growth, investment and job-creation holds promise for bringing whole populations out of poverty, the fact that this might create investment opportunities for private business owners is not, on its own, a reason to oppose them.

This must be so unless growth is a zero-sum gain, whereby any gain must necessarily be at someone else's expense. I'm no development economist, but intuitively that seems wrong.

Development policy cannot be reduced to market-creation, and aid spending cannot simply be about opening doors for one's home corporations to find new markets -- but the desire to avoid benefiting private sector firms cannot itself justify opposition to schemes to increase and liberalise trade and investment that might have direct and indirect pro-poor benefits.

In contemporary Africa, policies calculated to improve the business environment are not simply the manifestation of global capitalism vanquishing the interests of the poor. Nor is the UK's shift in aid policy (and others like it) simply designed to promote British industry at the expense of local people in developing countries.

The fact that these new pro-growth aid policies and related economic opportunities will be distorted by powerful, self-interested elites is a manageable risk. Otherwise we accept that 'aid' only comprises hand-outs of the old-fashioned kind, which are also manipulated politically and yet hold no promise of economic self-empowerment.

There are much wider structural issues of trade and investment that affect the prospects of emerging out of poverty: aid to help build local business and attract investment should be balanced with aid to help build the capacity of countries to engage in trade and investment negotiations on better terms.

Jo

See here for previous posts expressing caution with the tilt towards business's role in development.

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