Public-Private Partnerships in International Development

A recent report by the Center for Strategic and International Studies (CSIS) Project on U.S. Leadership in Development finds that, despite many global successes, U.S. development agencies under-utilize public-private partnerships and should “move from a system that reflects the biggest ‘wallet’ and biggest ‘rule book’ to a system that emphasizes the catalytic role of official development assistance.”

In their October 2011 paper, “Seizing the Opportunity in Public-Private Partnerships: Strengthening Capacity at the State Department, USAID, and MCC,” Daniel Runde and his coauthors examine the opportunities and challenges associated with employing public-private partnerships to achieve global development outcomes. They argue that the ability of U.S. development agencies—specifically the State Department, the U.S. Agency for International Development, and the Millennium Challenge Corporation—to partner successfully with other entities continues to lag even though public-private partnerships have become a mainstream component of development policy.

The authors explain the potential benefits of U.S. government partnerships with private foundations, organizations, and companies. For example, privately funded development projects typically involve lower transaction costs than government-regulated aid programs. In addition, private actors can foster and strengthen community ties—especially through collaborations with local nongovernmental organizations—that can improve the sustainability and scalability of projects that aim to achieve a variety of development goals.

Runde and his coauthors also describe and suggest solutions to numerous obstacles that prevent U.S. government agencies from effectively forming and maintaining partnerships. For example, the authors assert that strong leadership at U.S. agencies can encourage strategic engagement with private actors during the project planning process. They suggest that development agencies should implement institutional incentive structures to encourage staff members to leverage the private sector when attempting to address a development problem.

The authors recognize that institutional programming and budgetary constraints complicate the U.S. government’s resource allocation process and inhibit partnership development. Despite these challenges, Runde and his coauthors maintain that U.S. government agencies can and should institutionalize public-private partnerships as critical vehicles for global development.