Structural Adjustment and Public Private Partnerships The Impact of International Reforms on Domestic Policies

Overview of the Discussion International: Structural Adjustment in Practice- From Normative to Empirical Challenge Domestic: Public Private Partnerships in Pittsburgh and the World

Limited Government Assumptions and Administrative Reforms The Reagan Revolution and the New Orthodoxy

Reminder: The Source of the Reforms and the Bitterness Reagan and Thatcher Neo-Orthodoxy End of Cold War and Dismantling of the Soviet Union

Leftist Slogan “Maggie Thatcher Milk Snatcher” Thatcher had served as Minister of Education in Tory Government and tried to end school lunches.

U.S. Reforms Attack on Keynesian Economics Rejection of Regulation, Fiscal Policy and Wage and Price Controls U.S. Focus on Monetary Policy Need for Budget Reduction (no deficit), and Balanced Budgets

Monetary Policy Control the Flow of Money into The economy (Interest Rates, Production of Money, and regulation of Reserves for Loans)

International Policy Reform: Review The Current State of Management of Policy Reform and Structural Adjustment a. IMF stabilization and trade liberalization b. Currency reform, auctions- end of subsidies (end urban privileges)

Two Icons of Neo- Orthodoxy IMF Milton Friedman

Policy Reforms c. Market prices for agriculture and industrial goods d. Deregulate the economy e. Most Importantly: Free Trade f. Administrative Reform: Privatization

Internationally: Privatization Redux Key: Conditionality- Privatization of the economy Bridging and sectoral loans and grants (THE CARROT) The major source of international involvement- Conditioned on privatization

Privatization "Privatization fights laziness, privatization fights poverty, privatization fights smuggling, and privatization fights unemployment.“ (Swahili)

Policy Reform-Conditionality Conditionality- World Bank and UNDP and the "Management" Team of Resident Ambassadors SAPs- Focus on Policy and Administrative Reforms in return for loan restructuring and foreign aid

Administrative Reforms Stabilization and Conditionality Requirements Public Sector Reform Targets

World Bank Targets

Administrative Reforms Reform of the bureaucracy a. The problem: Need for skills b. Individual international Consultants and Contractors work with investments and the service/commercial sector

Structural Adjustment Principles and Conditionality

Structural Adjustment Problem of debt: Considered a Third World Problem not a Problem for Developed Countries Jamaica- #1 (Signed in 1977) Impact: Donor monies drive the system in the degenerated state

Structural Adjustment Second World as new debtors- Chad vs. Russia a. Transitional States-Hungary vs. Mongolia b. Rise of Asia and trade blocks c. Crisis in Asia and their return to debt management

SAPs and Russian Oligarchy

Policy Reforms- Issues 1. Controversy: The receivership committee- The UN Resident Rep., theWorld Bank Representative and the IMF delegate plus resident ambassador committee 2. Structural Adjustment State looks like colonial antecedents. 3. Mildly Opposing views of many UNDP Representatives (The role of the Resident and Country Plans)

The Other World View of SAPS

U.S. (Domestic Policy in the 1990s): David Osborne and an alternative to Privatization

Reforms (according to Osborne) 1. Strategic Planning and Management (not incrementalism) 2. Deregulation 3. Performance Management 4. Merit Recruitment 5. Decentralization and Development of Local Government

Administrative Reforms 5. End of Corruption 6. “Reinventing Government”- end to hierarchy and intra-governmental competition 7. Rewards based on Performance 8. Intra-governmental Competition

U.S. Reforms: From Re- inventing Government to Public- Private Partnerships NGOs, Business and a streamlined state

Beyond Privatization Public Private Partnerships

The Rhetoric

Public Private Partnerships: Domestic and International Contexts Defined: Partnerships (formal or informal) between: Non-Governmental Organizations (NGOs), or Non-Profits Community Based Organizations (CBOs), Governments, Donors (International and Private), Private- Business Sector.

Public Private Partnerships: Origins a. Domestic Urban Coalitions- Coming out of Great Society b. International Donors- Way of Dealing with Umbrella Grants and implementation of development policies c. Accepting government or donor money means accepting donor principles

The 1964 Great Society Speech

Public Private Partnerships Public Private Relationships is a concept that grew out of efforts to “downsize” the role of government. They refer to relationships between the public sector, nonprofit and nongovernmental sector, and the private sector. PPPs have also be referred to as: Privatizing Government, Outsourcing, and Devolving Government. The most obvious outcome of PPP movement has the growth in the number of nonprofit/nongovernmental organizations that provide a wide range of public services.

Public Private Partnerships: The Use of Grants The idea is that by drawing upon the non- politicized interests of the nonprofit/ nongovernmental sector and the expertise and acumen of the private sector, public services can be provided more cost- effectively and efficiently and thus create better public value for taxpayers. Thus the desire to create better public value is the primary objective behind the PPP movement. The PPP movement joins together public management, the political neutrality of nonprofit/nongovernmental organizations and the ingenuity of free market forces.

What?

Public Private Partnerships The underlying rationale for Public Private Partnerships is the belief that 1. The nonprofit/nongovernmental sector is closer to the community and has a better sense of the needs of the community and thus can more cost- effectively apply resources and 2) The private sector is more efficient at responding to market forces because of private investment and than large public bureaucracies.

The Model

Public Private Partnerships Building PPPs brings the public, the nonprofit and non-governmental and the private sector together for a common purpose. PPPs involve a set of elements of political good will management:

Public Private Partnerships 1) building a climate of tolerance, active support or ongoing operational assistance for 2) a policy or overall strategy to achieve specific objectives among those outside the scope of those who have direct authority over the domain 3) but whose operational assistance is necessary to achieve the objective. Not Competitive at this stage

Public Private Partnerships 4. Comes out of Domestic Non-Profits and Block Grants 5. Internationally Moving Beyond Structural Adjustment and Policy Reform? f. Seen by some as an alternative to Contracting Out- Others as part of it g. Critics see it as detrimental to a market approach to economic change

Understanding the Public Sector of Allegheny County Allegheny County is made up of 130 townships and boroughs. Each of these has its own public manager and council. The city of Pittsburgh is part of this mix of local government. Operating Budget for the County for 2003 is $654 million. This budget provides for such services as: Children and Youth Services Jail/County Police Port Authority District attorney coroner

Demographics of Allegheny County Total population 1,281,666 84% White 12% African American 1.7% Asian 1% Hispanic 1/10 of 1% Native American 18% 65+ 6% under 5 years old

Public Private Partnerships Characteristics- a. Targeted at the expansion of Social Capital and Synergy in the promotion of Economic and Social Development b. Seeks a holistic or Integrated Approach to Economic and Social Development c. Involves informal processes, cultural sensitivities as well as legal norms and contracting principles.

Human Resources Development Commission, Allegany County Maryland

Public Private Partnerships (PPPs) PPP Supporting Factors in the Domestic and International Context 1. Democratic Governance- private sector and NGOs seen as legitimate actors; transparency, accountability and responsiveness 2. Rational Government- Merit Principles, anti-corruption environment, acceptance of non-state actors as service deliverers. 3. Use of Contracting Out and Controlled Sub-Grants

Public Private Partnerships- Factors Factors that Support PPPs 3. Decentralization- Subsidiarity: Governance devolved to the lowest levels capable of implementation and contracting out 4. Legal Frameworks- Acceptance of Contractual Agreement as the basic organizational relationship

Public Private Partnerships- Factors 5. Institutional Norms, Organizational Capacity and regularized principles of inter- organizational interaction. Requires high levels of capacity building 6. Social and Economic Stability 7. Organizational flexibility across all sectors

Public Private Partnerships- Factors 8. Social and Institutional Pluralism- win-win rather than zero sum game across social, ethnic, religious and racial groups 9. Social Networks exist at Grass roots, and intermediate as well as higher levels of government-See diagram

Reference: Jennifer M. Brinkerhoff, Partnership for International Development: Rhetoric or Results (Boulder, Co.: Lynne Rienner Publishers, 2002)

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