Can Public-Private Partnerships Replace Dev't Aid?

♠ Posted by Emmanuel in , at 4/05/2014 06:34:00 PM

There's an interesting, ungated article in Global Policy by Amsterdam's PharmAccess I almost forgot to mention that makes the case for public-partnerships (PPP) replacing aid as the means for promoting development. The precursors of this argument should be familiar to most. One part is the William Easterly argument that despite hundreds of billions of aid to the third world, development outcomes leave much to be desired in many developing countries. Another part is CK Prahalad's argument that there is a "fortune at the bottom of the pyramid" to be made by firms addressing some of today's most pressing development challenges. To nobody's real surprise, PharmAccess incorporates a lot of these ideas in attempting to provide a sustainable, market-driven model for providing necessary medicines in Africa (see clip above).

What this article does though is provide a neat outline of different forms of public-private partnerships that can be entered into to allow markets to address developmental challenges that aid seems to address only partially (if at all):
This bottom-up approach starts with an analysis of the existing institutional framework and incentive structures, what we call the ‘diamond of development’ (see Figure 1 below). Ideally, the state would provide an institutional framework to support exchange, but [...] the state does not function efficiently so donors must determine if and how they can strengthen the other elements of the diamond: the economic behavior of people at the household level on the demand side, investment behavior at the supply side, and the role of social capital and groups in building trust and facilitating exchange.
Interesting stuff. I myself have become somewhat more sanguine on aid effectiveness when used in certain contexts. Over the years, I have become tired of ideological conflicts over whether aid works, fosters dependency on short-term solutions, etc.  and become more solutions-oriented. (If it works, then who am I to doubt?) However, PharmAccess' approach is certainly one to study to see if it can be applied to other parts of the developing world--South Asia, Southeast Asia, etc.