In A Public/Private Partnership, Who Bears The Burden?

By Joanne Sonenshine, Founder + CEO 

​Today I attended a dynamic discussion on the role of the private sector in catalyzing climate smart agriculture. The panel of speakers included an agricultural inputs company, a global business services company and finally, a representative from a global, publicly-funded sustainability-focused grant-making entity. In the room were representatives from various NGOs, a few government agencies, academia and civil society. The discussion was poignant, relevant and informative. 

I appreciated the urgency articulated by all panelists, realizing that to address our 17 Sustainable Development Goals (SDGs), feed a growing population, and ensure international development doesn’t leave agriculture behind, we must figure out how to combine forces and collaborate for greater efficiencies and effectiveness in agricultural communities (particularly with smallholders). 

I asked a question about infrastructure, and who bears the brunt of the challenges imposed by crumbling roads, disintegrating bridges, limited connectivity and other challenges that smallholders face when trying to sell more of their products into markets, domestic or foreign. An interesting conversation ensued, which I share below generalized and without attribution.

Keep in mind that to make a mark in a developing country, company investments are not without risk, and the returns, both social and financial, do not always compensate for that risk. Partnering with public entities, be they donors or service providers, is a critical and often forgotten element in international development, and one that has evolved as the definition of an economic ‘externality’ shifts. Goods and services once thought of as externalities, where price can’t easily incorporate the true costs and benefit of usability, were often covered by public investment. Think utilities or telecom. Nowadays we may define an externality in relation to climate change, or other factors that cannot easily be valued positively or negatively. As externalities shift, private sector entities are taking on more risk, and relying upon other actors to serve as conduits or to pass-through that risk. The benefits of these partnerships can exceed the cost, and often lead to positive externalities (increased rates of education, better health, more powerful labor force, empowered women and girls, etc.)  Roles between public and private entities in development are not always clear, however.

Generally the messages I heard in today’s conversation were the following:
 

• We need clearer roles between private and public entities. Private sector entities offer goods, but also services like innovation, market development, and training. In many geographies the public sector provided those services in the past. Roles are blurring. Where does the public sector stop and private sector start?
• What is the burden that each partner takes on? How do you quantify it? Do private sector entities always operate with a fee for service model? Do public entities take on that type of work?
• The SDGs force us to blend the roles of the private and public sectors given the focus on private-led development and with SDG17 emphasizing partnerships. How do we maintain clarity around who does what?
• In the poorest countries, donor dollars still matter. Private sector entities will not fill the development gap for a long time. How do public entities keep investments flowing to those most in need, and in a concerted and non-duplicative way?
• Private sector entities want stability where they operate. How risky can they get? Will they ever operate in the most impoverished places on earth? Can we rely on the private sector to solve all our development programs?

The answers to all of these questions are of course context specific. As one panelist said, it’s not about finding A partnership….It’s about finding the RIGHT partnership to advance the needs of communities they serve. That’s exactly what we need. We need the RIGHT partners working on the RIGHT projects together to advance the needs of all constituencies (private, public, civil, community) based on information from the communities themselves.

The conversation today, informative, refreshing and invigorating, is the kind we need to keep us thinking strategically and systematically about solving our world’s most pressing problems. I thank the panelists and hosts for the inspiration.
 

Joanne Sonenshine is Founder + CEO of Connective Impact, an advisory firm working with mission-driven enterprises to address our greatest social and environmental challenges through effective partnership development.