USAID
 and
 Sida:
 How
 and
 Why
 they
 
Engage
 in
 PPPs
 
 
 
 
 
 
 
 
 
...
 
 
2
 
Table
 of
 Content
 
 
Table
 of
 Content
 ......................................................
 
 
3
 
 
1.
 Introduction
 
 
 
During
 the
 past
 decade,
 the
 development
 community
 h...
 
 
4
 
partnerships
 (PPPs).
 PPPs
 within
 foreign
 aid
 are
 seen
 as
 hybrid
 governance
 f...
 
 
5
 
• How
 and
 why
 do
 USAID
 and
 Sida
 engage
 in
 PPPs?
 
 
Finding
 the
 answer	...
 
 
6
 
thorough
 explanation
 of
 the
 method
 used
 is
 presented,
 followed
 by
 an
 introdu...
 
 
7
 
Researchers,
 governments,
 businesses,
 and
 the
 press
 have
 often
 emphasized
 PPPs
 ...
 
 
8
 
PPPs
 in
 boosting
 economic
 development
 (Conrad,
 2012)
 or
 how
 partnerships
 betwee...
 
 
9
 
3.
 Theoretical
 Framework
 
 
3.1
 Approaches
 within
 Rational
 Choice
 Theory
 
 
...
 
 
10
 
are
 means
 to
 aggregate
 the
 preferences
 of
 the
 persons
 who
 embrace
 them.
 ...
 
 
11
 
could
 for
 example
 be
 risks
 in
 democratic
 institutions,
 political
 liberalization
...
 
 
12
 
and
 Sida
 could
 be
 seen
 as
 self-­‐interested
 maximizers
 who
 uses
 strategic
 c...
 
 
13
 
which
 stress
 that
 different
 institutional
 solutions
 occur
 depending
 on
 what
 pr...
 
 
14
 
previously
 been
 used
 to
 evaluate
 work
 of
 the
 EU’s
 development
 agency,
 Europ...
 
 
15
 
how
 and
 why
 USAID
 and
 Sida
 work
 with
 PPPs
 (Bryman,
 2008).
 USAID
 and
 S...
 
 
16
 
The
 framework
 focuses
 on
 the
 three
 specific
 dimensions:
 “context”,
 “actors”,
 a...
 
 
17
 
The
 third
 step
 assesses
 the
 governance
 structure.
 After
 assessing
 these
 three	...
 
 
18
 
5.1.1
 The
 History
 of
 the
 GDA
 from
 2000
 Until
 Today
 
 
In
 the
 1970s
...
 
 
19
 
Billing
 et
 al.
 states
 that
 the
 role
 of
 the
 business
 sector
 in
 Swedish
...
 
 
20
 
stated
 that
 private
 sector
 partners
 have
 been
 encouraged
 to
 put
 more
 energy...
 
 
21
 
 
Another
 important
 document,
 “Sweden’s
 Policy
 for
 Global
 Development”,
 also
 w...
 
 
22
 
The
 history
 of
 the
 GDA
 and
 B4D
 from
 the
 year
 of
 2000
 and
 onwards
 p...
 
 
23
 
Furthermore,
 Sida
 might
 have
 wanted
 to
 align
 with
 pressure
 from
 other
 devel...
 
 
24
 
demand
 would
 be
 the
 private
 companies
 seeking
 to
 increase
 their
 global
 mark...
 
 
25
 
washing
 with
 soap
 in
 Uganda,
 Kenya,
 Tanzania,
 Senegal
 and
 Benin.
 This
 proje...
 
 
26
 
forms
 of
 partnerships
 identified:
 financial
 partnerships,
 partnerships
 based
 on
 
...
 
 
27
 
The
 collaboration
 should
 always
 combat
 poverty
 (Sida,
 2013a).
 The
 idea
 of
 t...
 
 
28
 
The
 agencies
 are
 almost
 the
 same
 in
 one
 respect,
 their
 stated
 goal
 with	...
 
 
29
 
understanding
 of
 the
 development
 agencies’
 compliance
 level
 explaining
 how
 the
...
 
 
30
 
contribute
 to
 the
 alliance,
 they
 should
 also
 be
 
entitled
 to
 benefit
 from
...
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
Political Science Bachelor Thesis Stina Ahnlid
of 46

Political Science Bachelor Thesis Stina Ahnlid

Published on: Mar 4, 2016
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Transcripts - Political Science Bachelor Thesis Stina Ahnlid

  • 1. USAID  and  Sida:  How  and  Why  they   Engage  in  PPPs                                   BACHELOR  THESIS  IN  POLITICAL  SCIENCE  2013-­‐14     SUPERVISOR:  JONATHAN  KUYPER     STINA  AHNLID     WORD  COUNT:  12  346           During  the  last  decade  public-­‐private  partnership  (PPP)  initiatives  have  taken  on   increased  importance  for  development  co-­‐operation  and  development  agencies  in  OECD-­‐ countries.  This  thesis  takes  a  closer  look  at  how  and  why  the  United  States  Agency  for   International  Development  (USAID)  and  the  Swedish  International  Development   Cooperation  Agency  (Sida)  engage  in  PPPs  to  achieve  development  objectives.  The  thesis  is   a  comparative,  cross-­‐national  case  study  using  a  framework  that  analyses  context,  actors,   and  governance  structure  in  the  PPP-­‐programs  of  USAID  and  Sida.  Differences  will  be   analyzed  using  a  theoretical  framework  taken  from  rational  choice  theory  inspired  by   Schäferhoff  et  al.  The  thesis  argues  that  government  agencies  engage  in  PPPs  in  order  to   bridge  existing  governance  gaps  and  that  PPPs  occur  when  the  preferences  of  the   development  agencies  and  private  companies  overlap.  Also,  the  thesis  argues  that  the   compliance  level  within  USAID’s  PPP-­‐initiative  is  less  formal  than  that  of  Sida’s.         KEY  WORDS:  PUBLIC-­‐PRIVATE  PARTNERSHIP,  DEVELOPMENT,  FOREIGN  AID,  SIDA,   USAID
  • 2.     2   Table  of  Content     Table  of  Content  .......................................................................................................................  2   1.  Introduction  ...................................................................................................................  3   1.1  Public  Private  Partnerships  .................................................................................................  3   1.2  Research  Question  ..............................................................................................................  4   2.  Background  and  Previous  Literature  ...............................................................................  6   2.1  USAID  and  the  GDA  .............................................................................................................  6   2.2  Sida  and  the  B4D  .................................................................................................................  6   2.3  PPP  as  a  Mechanism  for  Development  ...............................................................................  6   2.4  Previous  Literature  ..............................................................................................................  7   3.  Theoretical  Framework  ..................................................................................................  9   3.1  Approaches  within  Rational  Choice  Theory  ........................................................................  9   4.  Methodology  ...............................................................................................................  13   4.1  Comparative  Cross-­‐National  Case  Study  ...........................................................................  13   4.2  Case  Selection  ...................................................................................................................  14   4.3.  Data  ..................................................................................................................................  15   4.4  Operationalization  ............................................................................................................  15   5.  Empirical  Analysis  ........................................................................................................  17   5.1  Context  ..............................................................................................................................  17   5.2  Analysis  of  Context  ...........................................................................................................  21   5.3  Actors  ................................................................................................................................  24   5.4  Analysis  of  Actors  ..............................................................................................................  27   5.5  Governance  Structure  .......................................................................................................  28   5.6  Analysis  of  Governance  Structure  .....................................................................................  34   6.  Conclusion  ...................................................................................................................  36   7.  References  ...................................................................................................................  38
  • 3.     3     1.  Introduction       During  the  past  decade,  the  development  community  has  increasingly  realized  that   development  aid  will  not  suffice  to  alleviate  poverty  and  reach  the  millennium   objectives.  Since  the  Monterey  Conference  on  Financing  for  Development  in  2002   several  international  development  conferences  have  pointed  at  the  role  of  the  private   sector  for  development.  Most  recently,  the  Busan  Conference  in  2011  and  Ban  Ki  Moon’s   High  Level  Panel  in  2013  clearly  stressed  the  importance  of  partnering  with   corporations  in  order  to  move  towards  sustainable  development.  For  example  in  the   final  document  from  the  OECD  conference  on  aid  effectiveness  in  Busan  leaders  commit   to:   …modernize,  deepen  and  broaden  our  co-­‐operation,  involving  state  and   non-­‐state  actors  that  wish  to  shape  an  agenda  that  has  until  recently  been   dominated  by  a  narrower  group  of  development  actors.  In  Busan,  we  forge   a  new  global  development  partnership  that  embraces  diversity  and   recognizes  the  distinct  roles  that  all  stakeholders  in  co-­‐operation  can  play   to  support  development  (Busan  Conference,  2011:2).     Thus,  development  agencies  have  increasingly  turned  their  interest  towards  the  private   sector  (Lindahl,  2005).  Recently,  many  policy  strategies  and  programs  have  been  crafted   in  a  way  that  encourages  cooperation  between  foreign  aid  actors  and  the  private  sector.   Two  examples  are  United  Nations’  (UN)  “Unleashing  Entrepreneurship  –  Making   Business  Work  for  the  Poor”  (2004)  and  the  World  Bank’s  “A  Better  Investment  Climate   for  Everybody”  (2005).       1.1  Public  Private  Partnerships     This  thesis  will  take  a  closer  look  at  how  and  why  two  specific  development  agencies,   the  United  States  Agency  for  International  Development  (USAID)  and  the  Swedish   International  Development  Cooperation  Agency  (Sida)  engage  in  public-­‐private
  • 4.     4   partnerships  (PPPs).  PPPs  within  foreign  aid  are  seen  as  hybrid  governance  forms   where  the  political  powers  of  non-­‐state  actors  are  extended.  In  PPPs  non-­‐state  actors   are  directly  affecting  political  decisions  like  agenda  setting,  policy  formulation  and   implementation,  and  co-­‐govern  together  with  state  actors.  The  PPPs  can  range  from   loose  forms  of  cooperation  to  legally  binding  contracts  when  implemented  (Schäferhoff   et  al.  2009).     The  goal  is  to  find  how  and  why  the  United  States  (US)  and  Sweden’s  development   agencies  engage  in  PPPs.  Also,  the  thesis  will  discuss  similarities  and  differences   between  USAID  and  Sida’s  PPPs.  Both  agencies  have  recently  initiated  private  sector   development  policies.  Sida  initiated  its  policy  in  2003,  but  did  not  start  to  work  seriously   with  the  program  until  2012  (Sida,  2013),  whereas  USAID  initiated  its  policy  in  2001,   and  has  been  actively  engaged  in  PPPs  ever  since  (Dewar,  2008).  Both  initiatives   challenge  companies  to  develop  products,  services  and  business  models  that  can   contribute  to  poverty  reduction  and  reduce  climate  change  together  with  the   development  agencies.       1.2  Research  Question     The  research  problem  of  the  thesis  emanates  from  the  observation  that  even  though   PPPs  are  increasing  in  popularity,  little  information  exists  on  how  development  agencies   relate  to  the  phenomenon  of  PPPs.  According  to  Schäferhoff  et  al.  international  PPPs   form  a  research  field  that  is  still  in  an  early  stage  (2009:468).  Since  these  initiatives  are   relatively  new  they  have  not  yet  been  examined  in  depth,  which  is  one  reason  for  why   increased  scrutiny  is  warranted.  Also,  there  has  been  a  considerable  increase  in  the  use   of  PPPs  during  the  latest  decade  (Lick  and  Hamlin,  2012)  making  it  a  heated  topic  in   need  of  more  research.  Another  puzzle  examined  in  this  thesis  is  that  even  though   USAID  and  Sida  are  relatively  similar  aid  agencies,  both  being  western  aid  agencies  in   the  top  rank  of  foreign  aid  (Toal,  2013),  they  have  different  approaches  when  it  comes  to   working  with  the  private  sector.  To  guide  this  research  paper  and  to  solve  the  research   problem  the  following  question  is  used:
  • 5.     5   • How  and  why  do  USAID  and  Sida  engage  in  PPPs?     Finding  the  answer  to  this  question  will  also  guide  the  paper  in  when  trying  to  explain   the  differences  between  USAID  and  Sida’s  PPPs.  In  order  to  answer  the  question  “how”   the  thesis  describes  the  overall  framework  and  rules  governing  USAID’s  and  Sida’s  PPPs   within  the  dimensions  of  “context”,  “actors”  and  “governance  structure”.  Also,  the   answers  to  the  question  “how”  and  “why”  PPPs  emerged  will  be  discussed  using  three   different  rational  choice  perspectives  taken  from  Schäferhoff  et  al.’s  article:   “Transnational  Public-­‐Private  Partnerships  in  International  Relations:  Making  Sense  of   Concepts,  Research  Frameworks,  and  Results”  (2009).  The  findings  of  the  thesis  will  be   of  importance  both  to  research  scholars,  professionals  in  the  development  sector  and   personnel  in  the  private  sector.     There  are  three  main  arguments  of  the  thesis.  First,  USAID  started  engaging  in  PPPs  due   to  the  realization  of  the  USAID  of  there  being  a  governance  gap  in  developing  co-­‐ operation  between  its  ability  to  promote  growth  and  the  ability  of  the  private  sector  to   do  the  same.  In  Sida’s  case  PPPs  emerged  because  of  outer  pressure.  Second,  both  USAID   and  Sida’s  PPPs  were  initiated  when  overlapping  preferences  were  at  hand  between  the   development  agencies  and  the  private  sector.  Third,  the  compliance  level  of  the  PPPs  in   USAID  is  lower  than  in  the  PPPs  of  Sida.       This  study  is  both  politically  and  socially  relevant.  It  contributes  to  political  science  by   investigating  how  government  institutions  can  work  together  with  private  companies.   This  study  is  socially  relevant  since  it  tries  to  increase  knowledge  in  how  to  manage   poverty  reduction.  Also,  cooperation  is  the  key  in  international  relations  and  is   important  for  the  reduction  of  poverty.  Furthermore,  this  topic  is  relevant  due  to  the   increasing  global  influence  of  both  small  and  multinational  corporations  in  general  and   due  to  development  agencies  attempt  to  use  these  corporations  to  obtain  development   objectives  more  specifically.       The  thesis  is  structured  as  follows;  next  section  provides  background  and  a  discussion  of   previous  literature  in  order  to  contribute  to  a  better  understanding  of  the  topic,  the   following  section  focuses  on  the  theoretical  approach  applied  in  the  thesis.  Thereafter,  a
  • 6.     6   thorough  explanation  of  the  method  used  is  presented,  followed  by  an  introduction  of   the  data  used.  The  next  section  consists  of  the  analysis  of  the  data,  followed  by  a   discussion  and  conclusion.  The  last  section  includes  a  reference  list.     2.  Background  and  Previous  Literature     2.1  USAID  and  the  GDA     The  USAID’s  model  for  PPPs  is  called  the  Global  Development  Alliances  (GDA).  It  was   established  in  2001  by  former  Secretary  of  State,  Colin  Powell  in  order  to  underpin  a   “fundamental  reorientation”  of  how  the  US’s  development  programmes  were  shaped   and  how  they  related  to  development  partners  (USAID,  2013).  The  GDA  is  supposed  to   help  improve  the  social  and  economic  state  of  affairs  in  poor  countries  as  well  as  to   expand  USAID’s  development  impact.  Until  today  the  program  has  formed  over  1700   alliances  together  with  the  private  sector  (USAID,  2013).     2.2  Sida  and  the  B4D     In  the  case  of  Sweden,  the  government  recently  realized  that  the  private  sector  had  to  be   better  included  in  the  development  agenda.  In  2012  Sida  adopted  a  Business  For   Development  (B4D)  program  encouraging  further  partnership  with  the  private  sector.   Before  the  B4D-­‐program  little  work  was  done  by  Sida  to  include  the  private  sector  in  its   work  although  the  agency  had  some  collaborations  together  with  private  parties.  Today   this  has  changed  and  business  is  one  major  actor  within  innovation,  investments  and   growth  according  to  Sida.  Using  these  drivers,  Sida  now  wants  to  reduce  poverty   through  developing  the  collaboration  with  Swedish  companies  (Sida,  2013).       2.3  PPP  as  a  Mechanism  for  Development
  • 7.     7   Researchers,  governments,  businesses,  and  the  press  have  often  emphasized  PPPs  as  a   measure,  which  holds  the  potential  of  increasing  sustainable  development  (Flinders,   2005;  Hertzberg  and  Wright,  2005;  Mullin,  2002).  The  following  section  thus  considers   PPPs  from  a  foreign  aid  and  theoretical  perspective.     The  definition  of  a  PPP  used  in  this  thesis  is  taken  from  the  OECD,  according  to  which  a   PPP  is:   An  agreement  between  the  government  and  one  or  more  private  partners   to  which  the  private  partners  deliver  the  service  in  such  a  manner  that  the   service  delivery  objectives  of  the  government  are  aligned  with  the  profit   objectives  of  the  private  partners  and  where  the  effectiveness  of  the   alignment  depends  on  a  sufficient  transfer  of  risk  to  the  private  partners   (2008:17).     PPPs  develop  through  the  recognition  that  many  ongoing  problems  cannot  be  solved   using  the  old  mechanisms  of  government.  According  to  the  OECD,  it  is  likely  that  the  use   of  PPPs  will  keep  on  growing  (2013).  PPPs  can  include  either  legally  formalized  forms  or   less  formalized  forms  of  cooperation  between  public  and  private  partners.  PPPs  might   appear  when  partners  identify  that  they  will  increase  net  benefits  and  decrease   governance  costs  when  reaching  a  partnership  (Sagalyn,  2007;  Mullin,  2002;  Newman   and  Verpraet,  1999).  Furthermore,  PPPs  are  considered  an  adequate  instrument  when   confronting  public  development  problems  where  unilateral  approaches  have  failed  or   provide  unsatisfactory  results  (Stadtler,  2012).    In  order  to  render  the  collaboration   successful,  partners  have  to  decide  on  shared  goals,  rules,  standard  operating   procedures,  and  the  division  of  tasks,  risks,  and  responsibilities  (Bryson  et  al.  2006).       2.4  Previous  Literature     A  range  of  previous  literature  has  dealt  with  the  phenomenon  of  PPPs.  This  section  focus   on  what  has  been  written  on  PPPs  within  the  field  of  foreign  aid.  One  assessment  study   discusses  the  conditions  under  which  partnerships  within  development  activities  work   or  do  not  work  (Houghton,  2010).  Other  economic  articles  discuss  the  importance  of
  • 8.     8   PPPs  in  boosting  economic  development  (Conrad,  2012)  or  how  partnerships  between   the  private  and  the  public  sector  should  be  managed  (Stadtler,  2012).  These  articles   show  that  little  research  has  been  done  about  why  PPPs  emerge  in  development  work.   This  thesis  seeks  to  diminish  this  research  gap  trying  to  gain  a  deeper  understanding  of   PPPs  within  foreign  aid.     Even  though  not  much  research  has  been  conducted  on  PPPs  within  foreign  aid  more   research  has  been  done  on  PPPs  within  other  fields.  For  example,  Andonova  studied   PPPs  within  the  environmental  field.  Similar  to  this  thesis,  Andonova  seeks  the  answer   to  why  international  organization  partner  with  non-­‐state  actors.  Andonova’s  findings   show  that  international  organizations  engage  in  PPPs  because  of  external  pressure  and   agency  autonomy  (Andonova,  2010).  Including  the  research  done  by  Andonova,   Schäferhoff  et  al.  have  summarized  different  studies  done  on  transnational  PPPs   exploring  why  PPPs  emerge,  under  what  conditions  they  are  effective,  and  under  what   conditions  they  are  legitimate  (2009).  It  is  in  Schäferhoff  et  al.’s  article  the  foundation   for  this  thesis’s  theoretical  perspective  is  found.  Throughout  this  thesis  some   weaknesses  of  current  research  mentioned  in  Schäferhoff  et  al.  will  be  addressed.  As   stated  by  Schäferhoff  et  al.  “more  empirical  research  is  necessary  to  further  specify  the   conditions  under  which  PPPs  emerge”  (2009:469).  Also,  Whelan  states  ”future  research   needs  to  acknowledge  that  states  continue  to  be  actors  of  considerable  importance  with   regard  to  the  creation  and  maintenance  of  Political  Corporate  Social  Responsibility   (CSR)  activities  and  initiatives  at  the  national  and  global  levels”  (2012:728).  Lastly,   Witte  and  Deng  stress  the  importance  of  giving  attention  to  the  questions  of  why   partnerships  emerge  (2005).     Since  the  previous  literature  is  limited  this  thesis  will  fill  a  research  gap  by  contributing   to  the  literature,  within  the  field  of  development,  on  the  use  of  PPPs  in  development   work.  This  study  will  also  contribute  to  knowledge  of  how  USAID  and  Sida  differ  in  their   use  of  PPPs.  The  research  aims  at  contributing  to  the  field  of  political  science,   development  studies  and  rational  choice  theory.
  • 9.     9   3.  Theoretical  Framework     3.1  Approaches  within  Rational  Choice  Theory     As  indicated  by  Schäferhoff  et  al.  international  relations  theories  can  be  successfully   applied  to  PPPs  when  conducting  a  theory-­‐based  comparative  research  (2009:452).   Taken  from  Schäferhoff  et  al.  this  thesis  uses  three  already  established  approaches   within  rational  choice  institutionalism  theory  that  seek  to  explain  why  PPPs  emerge  in   an  international  context.  These  three  approaches  are  useful  when  exploring  why  PPPs   have  emerged  in  USAID  and  Sida.  Previously  neo-­‐Gramscian  and  constructivist  theories   have  been  used  to  account  for  the  emergence  of  PPPs  (Schäferhoff  et  al.  2009)  however;   empirical  research  supporting  their  arguments  is  presently  limited  making  it  difficult  to   apply  them  to  this  thesis.  On  the  contrary  the  majority  of  work  refers  to  rational   approaches,  which  claims  to  “provide  a  grand  theoretical  framework  for  designing   human  institutions”  (Schofield,  1996:189).  Rational  choice  institutionalism  theory  is   also  applied  in  this  thesis.     Rational  choice  institutionalism  is  a  strand  deriving  from  new  institutionalism  (Peters,   2005).  According  to  Peters,  an  institution  is  a  structural  feature  of  the  society  and/or   polity.  There  are  both  informal  structures,  like  interacting  organizations  or  shared   norms,  and  formal  structures,  like  legislature  or  a  legal  framework  (ibid).  According  to   Peters:     An  institution  transcends  individuals  to  involve  groups  of  individuals  in   some  sort  of  patterned  interactions  that  are  predictable,  based  upon   specific  relationships  among  actors  (2005:18).       Furthermore,  to  be  an  institution  the  patterned  actions  also  needs  to  have  some  stability   over  time,  constrain  the  behavior  of  its  members  and  include  some  shared  values  and   meaning  among  the  members  of  the  institution  (Peters,  2005).     The  rational  choice  approach  in  new  institutionalism  applies  both  to  individual  behavior   and  collective  decision-­‐making.  The  rational  choice  approach  assumes  that  institutions
  • 10.     10   are  means  to  aggregate  the  preferences  of  the  persons  who  embrace  them.  The  behavior   of  the  people  inside  the  institutions  is  directed  by  rules  and  incentives  instead  of  norms   and  values  (Peters,  2005).  Furthermore,  rational  choice  institutionalism  assumes  that   actors  are  egoistic  wanting  to  pursue  their  own  interests  (Abott,  2008).  Within  the   institutions  a  rational  action  involves  utility  maximization  meaning  that  actors  choose   the  option  that  best  serve  their  objectives  (Green  and  Shapiro,  1994).  Also,  actors   maximize  the  expected  value  of  their  own  payoff  (ibid).  This  could  be  seen  as   contradictory  to  why  actors  engage  in  foreign  aid  but  this  is  not  the  case.  The   phenomena  could  be  explained  from  a  rational  choice  institutional  perspective  as   including  a  degree  of  altruism  in  the  actor’s  preference  function  or  by  seeing  the  actor   wanting  to  elevate  a  normative  goal  (ibid).  In  this  thesis  the  PPPs  within  the   development  agencies  will  be  seen  as  institutions  and  used  as  the  focus  of  the  analysis.       Deriving  from  rational  choice  institutionalism  theory  this  thesis  focus  on  the  most   important  arguments  mentioned  in  Schäferhoff  et  al.  The  arguments  will  guide  this   thesis  in  answering  why  PPPs  emerge.  Following  a  presentation  of  the  arguments  and   their  theoretical  background  is  given.     3.1.1  Solving  Governance  Gaps     The  first  argument  within  rational  choice  institutionalism  theory  in  Schäferhoff  et  al.’s   article  is:  “PPPs  are  purposefully  created  by  rational  actors  who  are  interested  in  solving   complex  trans  boundary  problems”  (Schäferhoff  et  al.  2009:456).  This  is  a  functionalist   explanation  that  considers  governments  and  multinational  corporations  that  previously   have  been  incapable  of  addressing  global  challenges  developing  from  globalization  in  its   most  efficient  way.  In  trying  to  battle  these  challenges  they  initiate  PPPs  that   successfully  fill  governance  gaps  through  effective  governance  solutions  (Reinicke  and   Deng,  2000;  Reinicke  and  Witte,  2000;  Nelson,  2002).  Governance  gaps  could  be  solved   through  the  use  of  PPPs  since  they  can  reduce  transaction  costs,  help  pooling  resources,   and  help  mediate  disputes  (Abott,  2008).     In  this  argument  the  governance  gaps  could  be  seen  as  market  failures  where   transactions  are  expensive  to  carry  out.  Examples  of  problems  causing  market  failure
  • 11.     11   could  for  example  be  risks  in  democratic  institutions,  political  liberalization  and   technological  change  (Reinicke  and  Deng,  2000).  In  trying  to  solve  these  governance   gaps  it  is  the  rational  choice  of  the  development  agencies  to  try  to  reduce  the  failure   within  the  market;  hence,  starting  to  work  with  private  companies  trying  to  solve   current  market  problems.  Moreover,  PPPs  could  act  as  bridges  between  producers  and   markets  making  markets  where  they  are  deficient  and  extending  markets  where  they   are  not  living  up  to  expectations  (Reinicke  and  Deng,  2000).  When  solving  the   governance  gap  the  reward  is  a  healthy  society  where  social,  political  and  economical   factors  are  improved,  hence  the  rational  choice  for  USAID  and  Sida  would  be  to  enhance   the  work  in  solving  governance  gaps.       Although  this  is  an  argument  appropriate  for  this  thesis  it  should  be  used  with  caution   since  other  authors  have  contested  it.  For  example  some  studies  have  found  that  PPPs   were  not  formed  to  help  close  governance  gaps  but  to  increase  the  interests  of  actors   (Andonova  and  Levy,  2003;  Hoering,  2003).  Other  criticism  towards  this  argument  could   for  example  be  that  some  development  agencies  might  benefit  from  an  inefficient  status   quo,  in  which  the  agency  only  search  for  profit  maximization.  This  is  not  the  case  of   USAID  and  Sida  since  they  are  democratic  western  aid  agencies  stating  that  their   objective  is  to  help  reduce  poverty.  Since  diminishing  poverty  is  the  agencies’  ultimate   goal  neither  of  the  agencies  would  benefit  from  an  inefficient  status  quo,  in  which  no   help  would  be  given.       3.1.2  Overlapping  Preferences     The  second  important  argument  is  “PPPs  will  be  formed  when  the  interests  of  actors   overlap,  and  each  of  them  can  expect  benefits”  (Schäferhoff  et  al.  2009:456).  This   approach  predicts  that  rational  actors  will  form  partnerships  to  promote  their  interests   when  their  preferences  coincide.  According  to  this  approach  PPPs  are  not  necessarily   established  to  diminish  governance  gaps,  but  that  PPPs  are  institutions  where  rational   actors  try  to  gain  unobtainable  resources  they  would  not  otherwise  have  (Tesner,  2002).   Furthermore,  development  agencies  cooperate  with  the  private  sector  in  the  delivery  of   services,  which  encompass  the  public  interests.  Private  interests  could  be  based  in   economic  or  political  opportunism.  According  to  rational  choice  institutionalism  USAID
  • 12.     12   and  Sida  could  be  seen  as  self-­‐interested  maximizers  who  uses  strategic  calculus  and   institutions  as  the  outcome  of  rational  thinking  (Peters,  2005).  It  would  be  the  rational   choice  for  USAID  and  Sida  to  engage  in  cooperation  with  the  private  sector  since  the   gains  and  preferences  are  enhanced.  For  example,  USAID  and  Sida  might  be  increasingly   confronted  with  difficulties  related  to  highly  technical  issues  in  which  they  lack   knowledge,  while  business  could  help  USAID  and  Sida  develop  these  skills.     One  criticism  towards  the  second  argument  could  be  that  even  though  the  public  and   private  sector  might  have  overlapping  preferences  there  is  a  chance  of  that  the   prisoner’s  dilemma  would  occur,  in  which  one  of  the  partners  might  not  benefit  from  a   collaboration.  Even  though  there  is  a  small  chance  that  the  prisoner’s  dilemma  would   occur  USAID  and  Sida  have  made  the  rational  action  in  establishing  guiding  rules  and   principles  in  how  a  partnership  should  be  managed.  Because  of  the  established   guidelines  the  prisoner’s  dilemma  is  avoided  and  both  partners  preferences  will  be   enhanced.  The  connection  to  the  prisoner’s  dilemma  and  compliance  level  is  further   developed  in  the  following  argument.     3.1.3  Compliance  Level     The  last  argument  states  “PPPs  are  based  on  diverse  institutional  designs,  ranging  from   loose  cooperation  to  highly  formalized  initiatives  that  rely  on  precise  rules,  strong   obligations,  and  compliance  mechanisms  to  further  the  goal  attained  to  partnerships”   (Schäferhoff  et  al.  2009:457).  This  argument  is  brought  up  by  Schäferhoff  et  al.  to   explain  why  diverging  institutional  forms  of  PPPs  develop,  which  cannot  be  explained  by   the  previous  arguments  (Reinicke  and  Witte,  2000).  This  argument  implies  that  there   are  different  levels  for  collaboration.  Some  form  a  more  severe  form  of  shared  action   problems,  since  actors  have  incentives  for  desertion.  Furthermore,  agencies  that  deal   with  problems  deriving  from  collaboration  are  predicted  to  be  relatively  formalized   (Hasenclever  et  al.  1997).  This  argument  is  connected  to  rational  choice  institutionalism   since  the  more  problems  that  might  occur  within  collaboration  the  more  rules  need  to   be  established  to  avoid  these  problems.  Here,  the  problem  of  prisoner’s  dilemma  is   diminished.  The  more  formalized  institutions  the  easier  it  will  be  to  avoid  the  prisoner’s   dilemma  in  partner  collaborations.  These  arguments  are  situation-­‐structural  in  nature,
  • 13.     13   which  stress  that  different  institutional  solutions  occur  depending  on  what  problems  the   cooperation  will  face  (ibid).     The  rational  choice  institutionalism  theory  is  used  for  this  thesis  since  it  helps  provide   interesting  insights  into  how  institutions  and  the  behavior  of  individuals  within  those   structures  behave.  To  understand  why  the  institutions  of  PPPs  have  emerged  in  USAID   and  Sida  the  three  rational  choice  approaches  will  help  understand  the  phenomena.   Following,  the  methodology  section  is  presented  explaining  how  the  answer  to  the   research  question  is  established.     4.  Methodology     4.1  Comparative  Cross-­‐National  Case  Study     This  thesis  is  a  comparative,  cross-­‐national  case  study.  The  data  will  be  studied  in  a   qualitative  manner  since  it  focuses  on  the  broader  context  (Bryman,  2008).  The   comparative  design  was  used  since  it  “implies  that  we  can  understand  social  phenomena   better  when  they  are  compared  in  relation  to  two  or  more  meaningfully  contrasting   cases”  (Bryman,  2008:58).  The  cases  are  USAID  and  Sida’s  initiatives  in  partnering  with   the  private  sector  called  the  GDA  and  B4D,  which  are  the  units  of  analysis.  Moreover,  the   case  study  approach  was  used  since  it  is  a  good  starting  point,  identifying  important   features  of  possible  relationships.  It  also  provides  an  opportunity  to  conduct  an   intensive  examination  of  the  case  (Bryman,  2008).     The  thesis  concentrates  on  the  overall  framework  of  rules  and  regulations  that  USAID   and  Sida  apply  to  their  respective  PPPs.  Only  the  management  of  partnerships  with   private  companies  will  be  examined.  The  GDA  and  B4D  initiatives  will  be  compared  with   regard  to  three  key  dimensions  that  are  relevant  to  the  analysis  of  development   cooperation;  “context”,  “actors”  and  “governance  structure”  The  dimensions  are  used  by   the  European  Commission  when  assessing  sectorial  development  programs  and   constitute  the  most  recent  and  up  to  date  tool  available  (EC,  2008).  This  framework  has
  • 14.     14   previously  been  used  to  evaluate  work  of  the  EU’s  development  agency,  EuropeAid.  It   has  neither  been  used  on  USAID  nor  Sida  making  it  unbiased  towards  these  agencies.   This  type  of  analysis  is  useful  in  trying  to  explain  why  reforms,  such  as  the  PPP   initiatives,  have  been  implemented,  which  also  makes  it  connected  to  the  theoretical   arguments  previously  presented  (DFID,  2009).  First,  the  “context”  framework  will   mainly  help  to  explain  if  the  agencies  have  been  trying  to  solve  any  type  of  governance   gap.  Second,  the  “actors”  framework  is  useful  when  trying  to  elaborate  if  there  are  any   overlapping  preferences.  Third,  the  “governance  structure”  framework  will  mainly  help   to  indicate  the  compliance  level  within  the  PPPs.     The  relevance  of  the  framework  is  not  limited  to  EU  development  cooperation.  There  is   nothing  in  this  framework  that  is  clearly  linked  to  EU  treaties,  institutions  or  policies.  On   the  contrary  the  dimensions  can  be  generalized  and  shed  light  on  development   cooperation  outside  the  EU  as  well.  No  other  framework  that  is  better  suited  to  the   purpose  of  this  essay  has  been  found.  By  comparing  how  Sida  and  USAID  conduct  PPPs   along  the  three  dimensions,  important  insights  with  regard  to  private  sector   engagement  in  development  cooperation  could  be  gained.       The  framework  suits  the  purpose  of  this  thesis,  with  some  adjustments,  since  it  points  at   concrete  aspects  that  have  to  be  studied.    Thereby  it  facilitates  the  comparisons  by   making  the  analysis  more  concrete,  manageable  and  understandable.  The  following   section  contains  a  brief  introduction  to  the  case  selection  and  data  used.  Last,  the   operationalization  is  presented  to  facilitate  the  understanding  of  the  method  used.     4.2  Case  Selection       The  cases  studied  in  this  thesis,  the  GDA  and  the  B4D-­‐program,  were  chosen  with  the   purposive  sample  method  since  the  method  entails  an  attempt  to  gain  a  good   correspondence  between  the  research  question  and  sampling  (Bryman,  2008).  The  goal   of  the  thesis  is  to  find  the  difference  in  USAID  and  Sida’s  PPP  programs,  the  GDA  and  the   B4D,  and  therefore  the  purposive  sample  method  was  used.  The  purposive  sample   method  was  used  due  to  the  study’s  aim  of  finding  the  similarities  and  differences  in
  • 15.     15   how  and  why  USAID  and  Sida  work  with  PPPs  (Bryman,  2008).  USAID  and  Sida  were   chosen  because,  both  USAID  and  Sida  are  western  aid  agencies  in  the  top  rank.  Also,   both  agencies  had  recently  initiated  PPP-­‐programs.       4.3.  Data     The  data  consists  of  the  overall  framework  rules  and  principles  for  the  PPP  programs   from  USAID  and  Sida.  The  primary  sources  used  are  official  documents  published  on   USAID  and  Sida’s  respective  webpages,  both  in  terms  of  official  documents  describing   the  programmes  and  reports  produced  by  hired  consultants.  The  documents  relates  to   the  basic  rules  and  regulations  for  the  PPP  program  of  the  respective  agency.  The  time   frame  looked  at  is  from  2000-­‐2013.  First  of  all,  the  thesis  analyzes  the  management   within  the  GDA  and  B4D.  When  specific  PPPs  are  used  they  include  private  companies   and  not,  for  example,  non-­‐governmental  organizations.  Therefore,  data  was  taken  from   the  section  were  USAID  and  Sida  described  their  collaboration  with  the  private  sector,   mainly  the  web  pages  for  the  GDA-­‐initiative  and  the  B4D-­‐initiative.  These  governmental   agencies’  web  pages  are  all  seen  as  reliable  sources.  When  sufficient  information  were   not  found  on  the  agencies’  official  web  pages  the  OECD  DAC  Peer  Reviews  of  USAID  and   Sida  were  used  as  a  complementary  source.     Since  a  majority  of  the  data  is  taken  from  governmental  sources  the  possibility  of  bias  in   the  documents  exists.  Therefore,  credibility  of  the  sources  is  to  some  extent  questioned.   On  the  other  hand,  biases  could  enhance  the  findings  of  this  study  shedding  more  light   on  the  agencies’  differences.  Therefore,  bias  is  not  seen  as  a  major  problem  within  the   thesis.  One  factor  that  is  seen  as  a  problem  is  the  issue  of  representation.  Only  a  limited   sample  of  official  documents  have  been  studied  in  this  thesis  making  it  difficult  to   determine  whether  the  result  would  have  been  different  if  time  would  have  permitted   an  examination  of  all  official  USAID  and  Sida  documents.  Due  to  this  restriction,  further   research  is  needed  on  examining  how  the  agencies  are  conducting  their  PPP-­‐programs.         4.4  Operationalization
  • 16.     16   The  framework  focuses  on  the  three  specific  dimensions:  “context”,  “actors”,  and   “governance  structure”.  The  dimensions  are  studied  within  a  specific  sector.  In  this   thesis  the  sector  is  defined  as  the  PPP-­‐initiatives  the  GDA,  and  the  B4D.     Each  dimension  brings  up  a  set  of  questions,  which  will  be  answered  later  in  the  thesis.   Also,  each  dimensions  help  explain  why  USAID  and  Sida  became  engaged  in  PPPs.  In  the   following  diagram  the  link  between  dimensions,  theoretical  arguments  and  questions   asked  are  shown.     Dimension   Theoretical  argument   Questions  asked     Context     Solving  governance  gap   Overlapping  preferences       What  is  the  history  of  the   sector?  What  political   attention  does  the  sector  get?         Actors     Overlapping  preferences   Solving  governance  gap   Compliance  level       Who  are  the  stakeholders  in   the  sector?  What  are  their   respective  roles  and   responsibilities,  their   interests  and  incentives  for   maintaining  the  status  quo,  or   for  change?       Governance  structure     Compliance  level   Solving  governance  gaps       What  are  the  sector’s  core   principles?  How  does  the   governance  structure  look   within  the  sector?       Finding  the  answers  to  these  questions  will  give  a  holistic  view  of  how  the  GDA  and  the   B4D-­‐program  work.  Also,  three  steps  are  used  when  trying  to  find  the  answers  to  the   previous  questions.  The  first  step  analyzes  the  context.  The  second  step  maps  the  actors.
  • 17.     17   The  third  step  assesses  the  governance  structure.  After  assessing  these  three  steps  a   combination  of  the  relationships  between  them  will  help  to  move  beyond  the  static   picture  and  the  answers  will  make  it  possible  to  assess  why  USAID  and  Sida  started   working  with  PPPs.  The  framework  helps  showing  clearer  results  on  how  the  two  PPP-­‐ initiatives  studied  differentiates  at  different  levels.  The  reliability  of  this  method  is   relatively  high.  The  results  of  the  study  will  be  consistent  if  the  same  cases  are  used  at   the  moment.  On  the  other  hand,  the  results  could  be  different  if  the  study  would  be   conducted  some  years  after  this  study  since  USAID  and  Sida’s  working  methods  usually   changes  over  time.  Also,  the  time  frame  only  encompasses  the  years  of  2000-­‐2013.  If   data  before  2000  would  have  been  collected  the  findings  might  have  been  different.   Another  problem  with  the  method  could  be  the  inappropriateness  of  the  results  to  be   generalized  to  other  development  agencies.  That  findings  cannot  be  generalized  affects   external  validity  (Bryman,  2008),  however,  this  study  does  not  aim  to  provide  generable   answers,  it  aims  at  finding  important  features  that  later  can  be  additionally  researched   with  the  aim  of  finding  generable  answerers.     5.  Empirical  Analysis     This  thesis  proceeds  as  follows.  First  the  GDA  and  the  B4D-­‐program  will  be  studied   through  the  dimension  of  “context”.  Within  the  dimension  of  “context”  there  are  two   sub-­‐aspects;  the  history  of  the  PPP-­‐programs  and  how  much  political  attention  the  PPP-­‐ programs  get.  Second,  the  PPP-­‐programs  will  be  studied  through  the  dimension  of   “actors”  mapping  their  roles  and  responsibilities.  Last  the  dimension  of  “governance   structure”  within  the  PPP-­‐programs  is  studied.  After  each  dimension  an  analysis  is   presented  mapping  the  differences  between  the  USAID  and  Sida’s  PPP-­‐programs  as  well   as  addressing  the  three  theoretical  arguments  taken  from  Schäferhoff  et  al.     5.1  Context
  • 18.     18   5.1.1  The  History  of  the  GDA  from  2000  Until  Today     In  the  1970s  70  percent  of  the  foreign  aid  from  the  US  to  the  developing  world  derived   from  USAID  and  30  percent  were  from  the  private  sector.  In  the  beginning  of  year  2000   there  had  been  a  significant  shift  making  the  majority  of  resources  from  the  US  to  the   developing  world  coming  from  the  private  sector.  Recognizing  this  shift,  USAID  initiated   the  Global  Development  Alliance  (GDA)  in  2001  to  encourage  PPPs  with  companies,   NGOs,  foundations,  and  others  (Clapp-­‐Wincek,  2004).  Furthermore,  the  GDA  was   initiated  to  link  the  rapidly  expanding  stream  of  private  funding  to  the  US  (ibid).       The  GDA  was  developed  due  to  the  recognition  of  the  importance  of  the  private  sector,   which  in  2000,  accounted  for  more  than  80  percent  of  the  overall  (beyond  Official   Development  Assistance)  financing  from  the  US  to  the  developing  world.  USAID’s  surge   for  global  actors  derived  from  liberalized  trade  policies  and  an  increase  in  information   technology  (Lawson,  2011).       This  alliance  would  broaden  USAID’s  reach  and  create  new  ways  for  USAID  to   implement  foreign  assistance.  The  Secretary  of  State,  Colin  Powell,  stated  that  the  GDA   would  be  “a  new  strategic  orientation  for  USAID”  and  a  new  Business  Model  for  the  21st   century  (USAID,  2013).  Before  the  GDA  USAID  had  a  long  history  of  working  in   partnerships  with  NGOs,  foundations,  and  international  organizations,  but  private  sector   companies  were  previously  under-­‐valued.  In  the  beginning  of  the  PPPs  focus  was  more   on  charity  and  private  philanthropy.  Today  focus  is  more  on  core  business  interests  of   private  firms  and  the  firms’  sustainability  work  (USAID,  2013).  Today,  the  GDA  is  seen  as   creating  more  effective  funding  in  development  cooperation  since  it  “creates  a  bigger   pie”  for  development  assistance  (USAID,  2013:2).  Because  of  budget  constraints  the   112th  Congress  had  means  of  withstanding  the  development  agenda  while  lessening   development  aid  levels  through  PPPs  (Lawson,  2011).       5.1.2  The  History  of  the  B4D-­‐program  from  2000  Until  Today
  • 19.     19   Billing  et  al.  states  that  the  role  of  the  business  sector  in  Swedish  development   collaboration  has  until  recently  been  relatively  minor  (2012:17).  During  2000-­‐2004  the   Sida  support  for  private  sector  development  was  evaluated.  The  findings  of  the   evaluation  were  that  the  support  for  private  sector  development  had  been  significantly   larger  than  officially  recorded.  This  was  mainly  due  to  interventions  made  in  other   sectors  (e.g.  health  or  agriculture)  that  were  not  recognized  as  PPPs.  The  report  also   found  that  a  lot  of  attention  was  given  to  macro-­‐economic  and  governance  aspects  in   Sida’s  work  while  the  main  factor,  the  development  of  a  business  sector,  were  largely   absent.  The  evaluation  confirmed  that  individual  contribution  to  the  private  sector  and   support  to  business  development  was  not  addressed  comprehensibly  by  Sida  (Sida,   2005).         It  was  not  until  the  end  of  2000  that  Sida,  at  the  same  time  as  the  Paris  Declaration  was   established  promoting  more  effective  foreign  aid,  did  start  working  with  the  private   sector  seriously  (Resare,  2011).  In  2004  Sida  adopted  a  new  Private  Sector  Development   Policy  based  on  the  report  called  “Making  markets  work  for  the  poor”.  At  this  stage  Sida   gave  greater  recognition  to  the  importance  of  macro-­‐economic  stability  and  market   effectiveness.  On  the  other  hand,  Sida  policy  has  to  depart  from  the  perspective  of  the   poor.  The  role  of  the  donors  was  not  widely  mentioned.  Support  for  individual  firms   could  be  given  where  clear  positive  externalities  were  possible  (Billing  et  al.  2012).     In  recent  years  the  “Making  markets  work  for  the  poor”  has  been  evaluated  and  refined,   focusing  more  on  private  companies.  In  2012  the  B4D-­‐inititative  was  established  that   could  be  seen  as  a  more  serious  attempt  in  starting  to  work  with  the  private  sector.     5.1.3  Political  Attention  Given  to  the  GDA     To  begin  with,  USAID’s  annual  letter  written  by  President  Obama  and  the  Administrator   of  the  Agency  for  International  Development,  Rajiv  Shah,  in  2013  is  studied.  In  the   annual  letter  the  USAID  PPP-­‐initiative  is  mentioned  ten  times  in  the  document,  which   contains  28  pages.  The  PPP  initiative  is  used  to  show  the  positive  results  that  USAID  has   achieved  through  the  program.  Also,  the  private  sector  is  mentioned  as  an  important   partner  for  USAID  and  as  an  engine  of  growth  and  development.  Furthermore,  it  is
  • 20.     20   stated  that  private  sector  partners  have  been  encouraged  to  put  more  energy  into   designing  more  solutions  to  the  remote  rural  communities  (USAID,  2013a).  Also,  the   Obama  administration  stated  in  the  2010  Quadrennial  Diplomacy  and  Development   Review  that:   …private  sector  partners  can  add  value  to  our  missions  through  their   resources,  their  capacity  to  establish  presence  in  places  we  cannot,  through   the  technologies,  networks,  and  contacts  they  can  tap,  and  through  their   specialized  expertise  or  knowledge  (USAID,  2010:68).     Additionally,  at  the  G8  Summit  in  Maryland  2012  President  Obama  initiated  a  public-­‐ private  partnership  program  called  “New  Alliances  for  Food,  Security  and  Nutrition”   indicating  its  importance  for  the  president.  The  alliance  include  the  G8  nations,  African   partner  countries  and  private  sector  partners,  which  together  aim  to  help  lifting  50   million  people  in  Sub-­‐Saharan  Africa  out  of  poverty  within  the  next  10  years  (Feed  the   Future,  2012).       5.1.4  Political  Attention  Given  to  B4D     Every  year  the  government  releases  its  annual  letter  of  appropriation  to  Sida.  The  letter   is  a  major  guideline  of  how  Sida  should  govern  its  work  the  following  year,  setting  out   the  objectives  Sida  should  achieve.  Also,  the  budget  allocation  is  presented  (UD,  2012).       The  B4D  program  is  mentioned  in  the  first  page  of  the  letter  from  2013.  In  the  first  page   there  is  a  paragraph  about  which  priorities  Sida  should  give  extra  attention  to  during  the   following  year.  There  are  six  specific  projects  that  are  highlighted.  One  of  these  projects   is  the  partnership  with  the  private  sector  through  the  B4D  program  (UD,  2012).  This   proves  that  the  government  clearly  wants  to  invest  more  time  and  money  into  the  B4D   program  during  2013.  Furthermore,  the  importance  of  the  private  sector  is  also   presented  in  the  annual  letter  of  appropriation  from  2012  as  an  important  priority,   although  the  B4D  program  is  not  mentioned.  Also,  when  looking  at  all  the  letters  of   appropriation  after  2007  the  importance  of  the  private  sector  is  only  highlighted  in  the   latest  two  letters  (Sida,  2013).  Thus,  there  seem  to  have  been  a  clear  and  recent  shift   towards  giving  more  political  attention  to  Sida’s  co-­‐operation  with  the  private  sector.
  • 21.     21     Another  important  document,  “Sweden’s  Policy  for  Global  Development”,  also  written  by   the  Swedish  Government,  highlights  the  importance  of  the  private  sector.  For  example  it   states:     In  general,  Swedish  enterprises  have  a  good  reputation  for  social  and   environmental  responsibility.  Sweden  will  help  promote  better  knowledge   of  and  compliance  with  universal  codes  of  conduct  and  other  instruments,   such  as  the  UN  Global  Compact  and  OECD  guidelines  for  multinational   enterprises,  through  regular  dialogue  with  representatives  of  the   governments,  business  sectors  and  civil  societies  of  our  partner  countries   (2007:25).     In  the  policy  guidelines  it  is  clearly  stated  that  Sida  should  use  CSR  as  a  natural  part  of   its  engagement  with  the  private  sector  in  partner  countries.  Also,  the  paragraph  ends   with  stating  that  Sida  will  work  closely  with  Swedish  enterprises  to  increase  bilateral   cooperation  on  social  and  environmental  responsibility  (Swedish  Government,  2007).     Furthermore,  in  the  policy  guidelines  one  main  goal  is  to  increase  the  investment   climate  in  developing  countries  that  benefits  both  local  business  development  and   Swedish  business  interests.  To  reach  this  goal  the  government  intends  to,  for  example:   encourage  CSR  by  promoting  the  principles  embodied  in  the  UN  Global  Compact  and  the   OECD  guidelines  for  multinational  enterprises,  promote  a  closer  partnership  towards   Swedish  corporations  to  make  full  use  of  the  initiative,  experience,  and  expertise,  and   improve  the  conditions  for  the  collaboration  between  Sida  and  the  Swedish  business   sector,  without  however,  forgetting  the  Swedish  principles  of  non-­‐tied  aid  (Swedish   Government,  2007).     5.2  Analysis  of  Context     5.2.1  Governance  Gap
  • 22.     22   The  history  of  the  GDA  and  B4D  from  the  year  of  2000  and  onwards  point  at  important   differences.  As  mentioned,  USAID  initiated  the  GDA,  in  2001,  while  Sida  has  not  been   very  clear  with  regards  to  when  it  started  focusing  on  working  with  the  private  sector.   Wanting  to  set  a  global  standard  USAID  was  amongst  the  first  to  initiate  PPPs  within   development  (Reinicke  and  Witte,  2000).  USAID  clearly  mentions  in  2001  that  the  GDA   will  collaborate  with  companies,  while  Sida  recognize  somewhere  after  2004  that  it   would  be  good  to  work  with  the  private  sector,  but  they  do  not  mention  distinctly  how   to  do  it  until  2012.  Comparing  USAID  to  Sida,  Sida  is  catching  up  through  its  B4D-­‐ program.       To  understand  the  differences  within  the  development  programs  an  analysis  of  why  the   programs  where  initiated  is  needed.  Moving  into  the  theoretical  argument  that  PPPs   occur  to  minimize  governance  gaps  this  could  clearly  be  seen  within  the  GDA.  When  the   GDA  was  initiated  USAID  realized  the  importance  of  the  increasing  power  of  the  private   sector  for  obtaining  development  objectives.  This  indicate  that  USAID  might  have   initiated  the  GDA  because  of  an  operational  governance  gap  where  USAID  found   themselves  lacking  the  information,  knowledge  and  tools  needed  to  respond  to  the   complexity  within  the  liberalizing,  technologizing  and  globalizing  world.  As  mentioned   before,  80  percent  of  the  financing  from  the  US  came  from  corporations  in  the  beginning   of  the  millennia  and  USAID  wanted  to  develop  a  strategy  made  for  the  21st  century  as   stated  by  Colin  Powell.  Clearly,  the  increasing  preference  of  MNCs  made  USAID   emphasize  the  work  with  them.  Therefore,  the  conclusion  is  drawn  that  the  GDA  could   have  been  initiated  because  of  the  gap  in  developing  co-­‐operation  between  USAID’s   ability  to  promote  growth  and  the  ability  of  the  private  sector  to  do  the  same     In  the  case  of  Sida,  it  is  more  difficult  to  find  proof  of  Sida  wanting  to  close  a  governance   gap  regarding  MNCs  since  they  initiated  their  program  later  than  the  US.  It  might  be  that   Sida  wants  to  increase  Swedish  companies’  CSR  work  and  that  Sida  found  a  lack  of   sustainability  efforts  outside  of  Sweden  since  Sida  states  that  they  want  to  spread  the   UN  Global  Compact  guidelines  and  the  OECD  guidelines  for  multinational  enterprises.   Sida  might  see  a  benefit  in  increasing  the  business  climate  towards  more   implementation  of  CSR.
  • 23.     23   Furthermore,  Sida  might  have  wanted  to  align  with  pressure  from  other  development   agencies  and  NGOs.  For  example  Sida  started  working  more  with  PPPs  after  they  had   signed  the  Paris  Declaration.  In  other  words,  this  thesis  point  more  towards  that  Sida   increased  its  work  with  PPPs  due  to  outside  pressure  from  the  international   development  community.  As  stated  by  Resare  Sida  followed  the  international   development  trend  called  the  “Private  Turn  of  Aid”  when  implementing  PPPs  taking   inspiration  from  the  US  and  Great  Britain  (2011).         5.2.2  Overlapping  Preferences     As  mentioned  by  USAID  there  are  positive  preferences  that  increase  when  USAID   partner  with  the  private  sector.  For  example,  development  objectives  could  easier  be   reached  through  increased  resources,  better  risk  sharing  and  increased  funding.  It  is  the   rational  choice  of  the  USAID  to  increase  its  development  objectives.  As  was  proposed  in   the  111th  Congress  USAID  should  focus  on  aid  efficiency  and  effectiveness  (Lawson,   2011).  Because  of  the  budget  constraints  PPPs  reduce  costs  for  USAID  making  decreased   costs  a  preference  for  them.  Also,  as  stated  in  USAID’s  annual  letter  of  2013,  the   partnerships  together  with  the  private  sector  help  USAID  reach  new  places,   technologies,  networks  and  knowledge.  It  is  clear  that  USAID  sees  a  lot  of  different   preferences  coming  with  the  GDA.     One  preference  that  could  be  seen  both  within  the  GDA  and  the  B4D  is  the  preference  of   sustaining  the  development  work  after  the  development  help  has  been  initiated.  In  other   words,  USAID  and  Sida  see  a  better  future  for  their  implementation  strategy  together   with  companies  when  participating  in  PPPs.  Here,  both  USAID  and  Sida  increase  the  self-­‐ sustaining  of  their  programs  by  focusing  on  core  business  interests  and  making   sustainability  profitable.  This  behavior  will  increase  the  likelihood  that  the  initiatives   will  continue  after  the  end  of  government  aid.     Another  preference  brought  up  both  by  the  US  and  Sweden  is  seen  within  the   commercial  dimension,  where  the  countries  want  to  make  new  developing  markets   where  they  are  lacking.  As  stated  by  Reinicke  and  Witte  global  public  policy  networks,   like  PPPs,  can  help  bridge  the  gap  between  demand  and  supply  (2000).  In  this  case  the
  • 24.     24   demand  would  be  the  private  companies  seeking  to  increase  their  global  market.  The   development  agencies  also  want  to  reach  the  poor  in  developing  markets  seeing   potential  in  partnering  with  corporations.     As  mentioned  in  the  context  of  political  attention  given  to  PPPs  in  Sida,  Sida  did  not   mention  private  companies  in  the  Letter  of  Appropriation  until  after  2005.  This   indicates  that  there  were  no  preferences  for  Sida  towards  the  business  sector  until  after   2005.  The  same  pattern  might  be  seen  for  USAID  but  since  the  time  frame  for  this  thesis   only  is  from  2000-­‐2013  other  research  is  needed  finding  out  when  the  overlapping   preferences  started  in  the  case  of  USAID.       5.3  Actors     Looking  at  how  Sida  and  USAID  recognize  the  companies  that  they  are  collaborating   with  in  the  GDA  and  the  B4D-­‐program  could  shed  important  light  on  the  agencies’   differences  within  their  programs.  When  trying  to  analyze  the  theoretical  arguments   taken  from  Schäferhoff  et  al.  actors  can  prevail  interesting  facts.  Due  to  the  importance   of  actors,  the  following  part  will  present  how  the  GDA  and  B4D  relate  to  their  partners.     5.3.1  GDA  Actors     The  GDA  is  designed  to  benefit  from  the  growing  presence  of  multinational  companies  in   developing  countries  through  formal  partnerships  marked  by  shared  objectives,  mutual   contribution  to  resources,  and  risk  sharing  (Lawson,  2011).  According  to  USAID’s  web   page  a  GDAs  must  involve  one  or  more  private  sector  organizations  or  actors.  In  the   GDA,  organizations  and  actors  in  the  private  sector  could  be:  private businesses, financial institutions, entrepreneurs, venture capitalists,  investors,  foundations  and  philanthropists.   Since  2001  USAID  has  worked  with  over  1700  individual  partners  making  it  hard  to  map   every  single  one  of  them,  because  of  the  broad  scope  (USAID,  2013a).     Examples  of  actors  engaged  in  an  ongoing  GDA  project  with  USAID  are  Unilever,  the  Bill   and  Melinda  Gates  Foundation  and  UNICEF.  They  work  together  to  increase  hand
  • 25.     25   washing  with  soap  in  Uganda,  Kenya,  Tanzania,  Senegal  and  Benin.  This  project’s  goal  is   to  eliminate  viruses  and  infection  amongst  the  people  (Sida,  2009).  Other  companies   that  have  been  working  with  USAID  are  Olam  International,  Cisco,  Root  Capital,  MTV-­‐ EXIT,  MIT  and  Laerdal  Medical  (USAID,  2013).     If  a  partnership  is  going  to  be  successful  it  is  important  to  have  a  clear  understanding  of   the  roles  and  responsibilities  of  each  partner.  USAID  has  stated  clearly  in  the  document   “Roles  of  Partners  in  Alliances”  each  partner’s  function  (USAID,  2013d).  The  functions  of   the  USAID  alliance  partners  within  the  GDA  program  is  that  they  should  bring  significant   new  resources,  ideas,  technologies,  and/or  partners  to  development  activities.   Successful  partnerships  should  mobilize  private  sector  contribution,  both  cash  and  in-­‐ kind  resources,  on  at  least  a  one-­‐to-­‐one  basis  (USAID,  2013b).       The  GDA-­‐model  makes  the  USAID  achieve  more  work  than  they  would  have  managed  by   working  alone.  Moreover,  the  companies  seek  other  interests.  For  example,  Unilever   want  to  increase  community  organization  and  new  approaches  to  marketing  by   partnering  with  USAID  (USAID,  2013e).  Incentives  for  all  partners  participating  in  the   GDA  are  that  risks,  responsibilities  and  rewards  are  shared  and  therefore  making  the   partnership  more  profitable.  Other  aspects  in  which  both  partners  prosper  are   increased  impact,  reach,  efficiency,  and  effectiveness  of  the  respective  investments  in   developing  countries.     Furthermore,  the  private  sector  is  able  to  leverage  USAID’s  expertise,  assets  and   working  relationships  in  a  way  that  enlarge  business  success  and  fosters  the  broader   economic  growth  (USAID,  2013c).  In  conclusion,  the  three  main  incentives  companies   have  in  partnering  with  the  USAID  are  to  access  technical  expertise,  strengthen   stakeholder  network,  and  reduce  financial  burdens  (BSR,  2013).     5.3.2  B4D  Actors     The  most  important  actors  within  the  Swedish  PPP  are  the  private  sector  companies  and   Sida,  representing  the  public  sector.  The  actors  gain  a  lot  in  partnering  with  each  other   when  trying  to  reach  the  goal  to  solve  development  problems.  There  are  three  main
  • 26.     26   forms  of  partnerships  identified:  financial  partnerships,  partnerships  based  on   expertise,  and  partnerships  based  on  market.  The  third  most  important  actor  is  the  civil   society  (recipient  countries),  being  the  major  feature  within  the  development  process.   Mainly,  a  tri-­‐sector  partnership  is  allocated,  including  an  alliance  between  an  NGO,  a  for-­‐ profit  company,  and  a  bilateral  donor  (Runde  et  al.  2013).     One  company  that  Sida  has  been  working  with  from  2011-­‐2012  is  Scania.  Together  with   Sida,  Scania  established  a  vocational  training  school  in  Iraq  with  a  focus  on   transportation.  Other  companies  Sida  has  been  working  with  are  Accenture,  Löfbergs   Lila,  Abba  Seafood,  Tetra  Pak,  Indiska  and  KappAhl  (Sida,  2013).     In  May  2013  Sida  held  a  meeting  together  with  20  leading  Swedish  companies  where   partnerships  were  initiated.  Some  of  the  companies  attending  were  H&M,  Ericsson,   Volvo  and  IKEA.  The  companies  made  an  alliance  with  Sida  stating  that  they  together   will  contribute  to  sustainable  development  and  to  diminish  poverty.  According  to  Sida’s   Director  General,  Charlotte  Petri  Gornitzka,  the  companies  should  be  role  models  and   show  other  companies  how  to  reduce  poverty  (Sida,  2013).  To  conclude,  the  meeting   recognized  that  Swedish  companies  are  increasingly  important  when  it  comes  to   sustainable  development,  although,  it  seems  uncertain  how  they  are  suppose  to   participate  and  make  a  change.   By  working  with  the  private  sector  Sida  wants  to  meet  the  great  global  challenges,  such   as  poverty,  environmental  deterioration  and  climate  change.  Also,  Sida  is  keen  to   achieve  the  Millennium  Development  Goals.  Since  Sida  cannot  do  this  by  themselves   they  want  companies  to  fill  the  untapped  potential  in  achieving  the  development  goals.   Through  working  with  the  private  sector  Sida  wants  to  mobilize  resources  and   encourage  companies  to  develop  new  approaches  within  their  core  business  to  improve   the  lives  of  people  living  in  poverty.  The  last  interest  of  Sida  is  to  encourage  businesses   to  create  a  sustainable  and  inclusive  business  venture.     Sida  is  also  making  it  clear  that  the  private  sector  collaboration  is  not  about  promoting   Swedish  business.  Instead  it  is  a  collaboration  to  encourage  development  that  would  not   otherwise  have  taken  place  within  the  private  sector  because  of  the  commercial  risks.
  • 27.     27   The  collaboration  should  always  combat  poverty  (Sida,  2013a).  The  idea  of  the   partnership  is  not  to  foster  business  for  its  own  sake.  For  Sida  there  is  a  strategic   importance  to  reach  intelligent  partnerships,  including  the  business  sector.  The   collaboration  should  be  based  on  frameworks  that  go  hand  in  hand  with  Sida’s   development  goals.  These  goals  are  usually  consistent  with  serious  corporation’s   sustainability  plans  (Sida,  2013b).     The  business  sector  is  important  in  the  partnership  with  Sida  since  it  offers   development  solutions  when  traditional  sources  of  capital  and  energy  for  development   are  shrinking.  Within  the  B4D-­‐program  corporate  partners  provide  funding,  market   access,  access  to  technology,  supply  chain  power  and/or  intangible  benefits.  Sometimes   donor  companies  could  also  offer  a  valuable  brand  and  also  give  marketing   opportunities  (Runde  et  al.  2013).     5.4  Analysis  of  Actors     5.4.1  Governance  Gap     It  is  clear  that  the  GDA-­‐program  has  been  in  force  much  longer  than  the  B4D-­‐program.   Under  the  GDA  USAID  has  worked  with  more  than  1700  individual  partners  while  Sida   has  just  started  working  with  20  companies  last  May  and  it  is  hard  to  find  how  many   partners  that  Sida  has  been  working  with  before  last  May.  Again,  this  proves  that  Sida   recently  has  recognized  the  importance  of  the  private  sector  within  aid  development   while  USAID  recognized  the  companies’  importance  already  in  the  beginning  of  the   millennium.  Again  this  proves  that  USAID  early  on  identified  a  governance  gap  between   its  own  ability  to  promote  development  and  the  ability  of  private  companies  to   contribute  to  fulfillment  of  the  objective,  while  Sida  probably  was  more  forced  by   outside  pressure  to  work  through  PPPs.     5.4.2  Overlapping  Preferences
  • 28.     28   The  agencies  are  almost  the  same  in  one  respect,  their  stated  goal  with  working   alongside  corporations.  Both  state  that  the  goal  is  to  more  effectively  reach  higher   sustainable  development  more  effectively  through  new  resources,  ideas  and   technologies.  These  are  the  clear  preferences  of  both  agencies.  For  example  Sida  use   Scania  to  easier  reach  mechanics  in  Iraq.  This  shows  that  federal  aid  like  USAID  and  Sida   often  have  a  wide  expertise  within  development  work  but  often  lack  specialized   industry  knowledge  the  private  sector  has.     5.4.3  Level  of  Compliance     Differences  exist  in  the  agencies  viewpoint  of  how  the  companies  are  perceived.  For   example,  Sida  makes  it  clear  that  partnerships  with  companies  are  not  used  as   promoting  business  but  to  encourage  development  that  would  not  have  occurred  due  to   the  commercial  risk.  This  indicates  that  Sida  needs  to  put  more  pressure  on  the   companies  they  are  working  with.  Sida  does  not  want  to  be  seen  as  a  platform  where   businesses  can  flourish  and  increase  their  profits  but  a  platform  where  companies  can   help  Sida  to  work  with  poverty  reduction.     At  the  same  time  USAID  stress,  according  to  them,  the  positive  aspects,  like  reducing   operating  costs,  increased  sales  and  increased  brand  awareness,  for  companies  that   want  to  partner  with  USAID  while  Sida  does  not  mention  this.  It  seems  as  if  USAID  sees   company  profits  as  something  positive,  while  Sida  views  profits  as  a  sensitive  matter.   Since  the  GDA  is  seen  as  more  pro  business  than  the  B4D  the  GDA  seems  to  have  a  lower   level  of  recruitment  for  compliance  than  the  B4D.  This  argument  is  strengthened   through  the  statements  from  Sida  saying  that  business  needs  to  be  serious  and  comply   with  Sida’s  development  goals  through  the  company’s  sustainability  plan.       5.5  Governance  Structure     The  following  part  of  the  thesis  takes  a  closer  look  at  how  USAID  and  Sida  manage  their   PPPs.  The  guiding  principles  and  governance  structure  will  mostly  increase  the
  • 29.     29   understanding  of  the  development  agencies’  compliance  level  explaining  how  the  PPPs   are  managed.  Also,  the  argument  of  preferences  overlapping  is  discussed.     5.5.1  Guiding  Principles  of  the  GDA     There  are  seven  key  principles  guiding  the  alliance  between  USAID  and  the  private   sector.  The  principles  are  based  on  the  core  themes  of  trust,  equity,  competencies,   inclusivity,  partnership  alignment,  mutual  benefits,  and  transparency.  The  following   table  contains  the  most  relevant  principles  for  GDA  cooperation.     Principle  dimension   Explanation   Trust   Trust  is  an  essential  foundation  enabling   partners  to  work  together  despite  individual   alliance  organizations'  differing  interest,   motivations,  cultures,  values,  and   infrastructures.  Trust  is  also  fundamental  to   building  a  fruitful  relationship  with   communities  an  alliance  is  trying  to  work  with   or  in.     Equity   Equity  implies  that  each  partner  is  equally   welcome  and  important  to  an  alliance.  Global   Development  Alliances  are  created  on  the   precept  that  each  partner  is  of  equal  value  to   an  alliance.     Partnership  alignment   Each  partner  should  come  together  to  jointly   define  an  alliance's  objectives  according  to   overlapping  interests  and  agendas.     Mutual  benefit   Healthy  alliances  will  work  toward  achieving   specific  benefits  for  each  partner  over  and   above  the  common  benefits  to  all  partners.  If   each  partner  in  an  alliance  is  expected  to
  • 30.     30   contribute  to  the  alliance,  they  should  also  be   entitled  to  benefit  from  it.     (USAID,  2013)     5.5.2  Guiding  Principles  of  the  B4D     For  the  B4D-­‐initiative  there  are  ten  guiding  principles.  The  following  table  introduces   the  principles  studied  in  this  thesis.     Principle  dimension   Explanation   A  social  problem  and  an  area  of   developmental  improvement  as  the  point   of  departure.   Projects  should  be  anchored  in  defined   problems  and  needs  in  partner  countries,  and   not  be  driven  by  company’s  supply  desires.   The  scope  of  such  problem  solving  and   benefits  to  the  partner  countries  should  be  the   key  justification  for  support  by  Sida.     Country  strategy  and  sector  alignment.   The  project  should  be  within  the  parameters   of  the  country’s  existing  national  policies,  e.g.   Poverty  Reduction  Strategies.  Preferably,  the   PPP  should  be  focused  on  the  key  sectors   defined  in  Sida’s  development  assistance  in   line  with  the  Paris  agenda  but  is  not  limited  to   these  sectors.     Rights  based  approach.   The  project  shall  align  with  a  rights-­‐based   approach,  strengthening  key  principles  such   as  participation,  transparency  and   accountability.  Operations  should  support  and   complement  existing  local  democratic  and   institutional  management  systems  rather  than   be  contra  productive  to  these.

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