When business meets aid: analysing public-private partnerships for international development (Development Policy Centre Discussion Paper 28)

International development agencies are increasingly looking to business as a partner in achieving development outcomes. Engaging business in development has become a central plank of many countries’ aid policies. However, the potential of public-private partnerships for development is still largely unrealised. Business and development agencies would benefit from a better understanding of what forms of practical partnership might be constructed, for what purposes and with what likely impact. We propose a new framework for thinking about practical engagement between business and development agencies. It is based, in the first instance, on a distinction between partnerships that increase the development impact of core business activity, and those that contribute to the private provision of public goods. Within this framework we discuss development agencies’ existing involvement in inclusive business ventures, pro-poor supply chain initiatives for internationally-traded products, public-private partnerships for service delivery, and product development partnerships in health. In each of these four areas we provide short case studies and identify a set of issues for further consideration in future work. We close with some observations on cross-cutting issues, including the slenderness of the evidence base in this field, and the fragmentation of existing initiatives. Our main conclusions are three. First, the next generation of enterprise challenge funds should be designed on the basis of a broad evaluation of their predecessors and explicit consideration of a set of issues that we identify. Second, more effective brokerage arrangements, and some flagships, will be needed in order to expand public-private partnerships for service delivery. Third, a comprehensive review of product development partnerships should be undertaken which, among other things, compares them to market-based alternatives.