BERF Zimbabwe – Public Private Dialogue interventions in Sub-Saharan Africa

An Evidence and Learning Note prepared for DFID Zimbabwe provided useful suggestions on Public Private Dialogue systems, approaches and mechanisms that have worked in other contexts, which could be suitable for DFID’s Public Private Dialogue  programmes in Zimbabwe.

BERF’s Evidence and Learning research team reviewed the evidence on Business Environment Reform and investment climate programmes funded by other donors and the benefits to the countries. The research team was asked to provide analysis on:

Economic Impacts

  • Public Private Dialogue  programme performance including economic costs and benefits
  • Impact of Public Private Dialogues on high-level reforms and ‘whole economy’ benefits.

Inclusive Stakeholder Engagement

  • Innovative Public Private Dialogue  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 including the approaches that have been sustained in difficult political economy situations.

Financial Sustainability

  • Innovative, low-cost solutions employed by Business Membership Organisations to build capacity, sustain membership and implement outreach activities to achieve financial sustainability.

The team concluded that Public Private Dialogue  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 Public Private Dialogue  projects in Sub-Saharan Africa, and the reforms have often been less successful than elsewhere.

Evidence of the importance of Public Private Dialogue  for African firms and economies is now emerging, and suggests that two aspects of Public Private Dialogue  are especially important:

  • Good Public Private Dialogue  institutions and laws enhance economic growth, other things being equal; and
  • Membership of a Business Membership Organisation is associated with an increase of a firm’s productivity by 25–35 per cent. 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 Public Private Dialogue  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 International Finance Corporation 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.