Private-Public Partnerships

A condition for successful development in the context of a free market economy

In a free market and trade economy, governments alone cannot ensure development and economic growth, neither can the private sector do so on its own. While everyone benefits from competitive markets, no one in particular makes huge profits from keeping the system competitive and the playing field level. Even tough entrepreneurs get their best chances from grasping opportunities that arise freely in an open business environment, nobody has a strong vested interest in promoting or defending free markets. Free markets are a public good, and as such, they have no natural constituency. For free markets to emerge and function, countries need neither too little nor too much government. Governments have to balance their policy and regulatory involvement, so both social development and business competition can happen. On its side, the private sector can develop business ideas and take risks only if there is a certain level of security thanks to transparent and enforced Government regulations. Governments and private sector have a common interest in fostering a constructive dialogue on policy options, all the more so that there are general, but no country-specific, guidelines as to what constitutes good economic governance.

There are also situations where governments need inputs from their business sectors, for example when it comes to preparing for bilateral, regional or multilateral trade negotiations. Governments need to hear from their businesspeople where there face real limitations or constraints for business development. Obviously, governments have to keep their sight on their nation’s overall development and therefore need to make choices: not all desires expressed by business circles can or even deserve to be integrated into government policies or positions. Even if it is politically difficult, it is important for governments to engage into a public dialogue, with the private sector at large - i.e. business communities, but also other stakeholders from society - on strategic national choices that impact on a nations’ development philosophy and potential.

IDEAS Centre actively supports private-public sector dialogue and cooperation. In doing so, our broad goal is to help low-income countries participate in and benefit from free trade and free markets. Our support can take on different forms, such as raising the awareness of businesspeople about their role and possible actions when it comes to influencing Government policies and/or positions for trade negotiations. Or our assistance can be more technical, such as helping a country to define and establish a sound public procurement system. Public-private partnerships are the only way to make progress where neither governments nor businesspeople alone can overcome development hurdles. And we feel happy to work together with both parties, so as to foster the best possible results in terms of sustainable development.

Documentation

Presentation made at the Swiss Investment Forum, Zurich, June 13,
2006, organized by www.sofi.ch