Structural Adjustment, Policy Reform and Public Private Partnerships

Contemporary North-South Issues  Overview Of Financial and Budgetary Management Systems in LDCs

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management Until the 1950s  Recurrent budgets  Law and order  Colonial models  Recurrent vs. Development budgets

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management 1950s – 1960s  Growth—domestic development funds with bilateral technical assistance  Relationship between Command economy and the market  Keynesianism and the controversial models Soviet Union, India

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management Mid 1960s – 1970s  Distribution and basic needs  World Bank and poorest of the poor

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management Mid 1970s – 1980 (Planning vs. Budgets)  Planning demanded by technical assistance  Technical assistance both grants and loans (no private loans to Africa)  Project planning "wins" over national planning and budgeting systems

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management 1980s  Structural Adjustment—"non-budgetary" allocations vs. incremental budgeting  Problem of debt  Donor monies drive the system in the degenerated state

Domestic Management Systems and International Influences  Six historical periods of budgetary and fiscal management 1990s  Collapse of the Soviet Union  “Clash of civilizations”

Second World as New Debtors  Chad vs. Russia Transitional States Rise of Asia and blocks Crisis in Asia and the return to debt management

Current State of Financial Management  IMF stabilization and trade liberalization Currency reform, auctions and end of subsidies (urban privileges) Market prices for agriculture Deregulate the economy

Current State of Financial Management  Conditionality—World Bank, UNDP and the "Management" SAPs Opposing views of many UNDP Representatives  Role of the Resident and Country Plans The receivership committee Resident Rep., World Bank Representative and the IMF delegate resident ambassadors Stabilization and Conditionality Requirements  Public Sector Reform

Current State of Financial Management  Reality—the absence of recurrent budgets  Activity (economy) driven by technical assistance projects the only game in town  Bridging and sectoral loans and grants major source of international involvement

Current State of Financial Management  Key Conditionality—Privatization of the economy Divestiture Contracting out Liquidation Sell off public private partnership shares

Current State of Financial Management  Problem—Privatization of the bureaucracy Cutback the civil service  Infamous 19% first cut Individuals work with investments and the service/commercial sector Departments sell their services  Statistics in Zaire/Congo

Current State of Financial Management  Problem—Privatization of the bureaucracy Sub-economic salaries  Offices, houses and telephones—buying soap and selling chickens International conditions for "good" bureaucrats  World Bank in Uganda special salaries for those on contract with the project Goal: Return to the recurrent budgeting process of 1950s

The Debate  The primacy of the Nation-State: How sovereign? Impact of trans-national actors Issue of micro-states Rational Actor model- public or social choice theory  Collective choice is non-rational The role of international regimes  UN, World Bank, IMP, etc. New International Order (NIO)

The Debate  The Importance of the Market The end of the Command Economy? The concepts of market and productivity International systemic hegemony and competition within international markets Complementarity problem and origins of capital Market failure?

The Debate  The World Economic Regime World Market: Only game in Town? Questions of conflict: pluralist vs. hegemonic models in the post-war world Economic change vs. political development  Governance (democracy) a pre-requisite? Impact of world economy on Domestic Economies

Development of Underdevelopment  Changing Terms: Review Non-Western World Developing areas or nations Third World Southern Tier States LDCs UDCs Where are we now?

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

Public Private Partnerships  Origins- a. International Donors- Way of Dealing with Umbrella Grants and implementation of development policies b. Accepting donor money means accepting donor principles

Public Private Partnerships c. Comes out of Structural Adjustment and Policy Reform d. Seen by some as an alternative to Contracting Out- Others as part of it e. Critics see it as detrimental to a market approach to economic change

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.

Public Private Partnerships (PPPs) PPP Supporting Factors in the 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. Contracting Out

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)