An Evidence and Learning Note prepared for DFID Zimbabwe provided useful suggestions on Public Private Dialogue (PPD) systems, approaches and mechanisms that have worked in other contexts, which could be suitable for DFID’s PPD programmes in Zimbabwe.
BERF’s Evidence and Learning research team reviewed the evidence on BER and investment climate programmes funded by other donors and the benefits to the countries. The research team was asked to provide analysis on:
- PPD programme performance including economic costs and benefits
- Impact of PPDs on high-level reforms and ‘whole economy’ benefits.
Inclusive Stakeholder Engagement
- Innovative PPD platforms or solutions to address investment climate constraints and inclusive growth especially for women and poor rural people
- Models of inclusive stakeholder engagement, (for example texts, smartphones), to build the capacity of women and young people and support an improved enabling environment for investment.
- Examples of effective ‘bridge-building’ solutions used by governments and Business Membership Organisations (BMOs) including the approaches that have been sustained in difficult political economy situations.
- Innovative, low-cost solutions employed by BMOs to build capacity, sustain membership and implement outreach activities to achieve financial sustainability.
The team concluded that PPD can be a powerful driver of business environment reform. In many countries, donor-supported interventions have been effective in promoting dialogue, resulting in significant improvements in the investment climate. However, donors have been slow at implementing PPD projects in Sub-Saharan Africa, and the reforms have often been less successful than elsewhere.
Evidence of the importance of PPD for African firms and economies is now emerging, and suggests that two aspects of PPD are especially important:
- Good PPD institutions and laws enhance economic growth, other things being equal; and
- Membership of a BMO is associated with an increase of a firm’s productivity by 25–35 percent. Such firms have reduced corruption, improved public utilities and higher labour productivity. The effect is similar for firms of all sizes, and includes both domestic and foreign firms (although the effect is larger for the latter).
Donor methodologies for PPD interventions can be categorised as a traditional approach or a market systems approach, each founded on differing theories of change. Both types of programme have challenges in common.
- The traditional approach, associated with the IFC and World Bank, emphasises a structured process mediated by a neutral secretariat, facilitated by evidence-based research to focus dialogue and maximise returns.
- The market systems approach developed recently in a DFID-funded programme implemented in Nigeria focuses on the market for business environment reform. The private sector demands reforms from government. The approach emphasises sustainability and catalytic interventions, and has achieved success strengthening local institutions for research and media.