Foreign Assistance: Public-Private Partnerships (PPPs)

development policy discussions over the last decade. Goal 8 of the United Nations' Millennium Development Goals emphasizes working with the private sector to increase global access to information technology and pharmaceuticals. The "transformational diplomacy" initiative in the George W. Bush Administration included engaging the private sector among its six areas of focus. The Obama Administration's U.S. Global Development Policy aims to leverage the private sector, philanthropic, and non-governmental organizations, and diaspora communities. The U.S. Agency for International Development (USAID) reports participating in 1,065 public-private partnerships (PPPs) with 3,025 different partners, leveraging partner resources valued at nearly $13 billion, between 2001 and November 2010. These partnerships are viewed by some as part of a broad ongoing transformation of how foreign aid is implemented, bringing nontraditional actors and ideas into development practice. Others view PPPs as an experiment that has not proven itself preferable to traditional approaches to development assistance. Public-private partnerships are characterized by joint planning, joint contributions, and shared risk. They are viewed by many development experts as an opportunity to leverage resources, mobilize industry expertise and networks, and bring fresh ideas to development projects. Partnering with the private sector is also widely believed to increase the likelihood that programs will continue after government aid has ended. From the private sector perspective, partnering with a government agency can bring development expertise and resources, access to government officials, credibility, and scale. The evolution of private sector involvement in U.S. foreign assistance programs has been driven by globalization, which has led to a modern approach to development partnerships. The U.S. government has established various development partnerships with private sector entities, including the Global Development Alliance (GDA) at USAID and the Global Partnership Initiative at the State Department. Other bilateral agencies, such as the Millennium Challenge Corporation, have also established partnerships with private sector entities. The potential benefits of public-private partnerships include cost savings, increased efficiency, and access to specialized expertise and resources. However, concerns have been raised about the effectiveness of PPPs, the potential for diversion of resources away from proven development programs, and the risk of outsourcing of U.S. jobs. The use of PPPs by other bilateral donors and multilateral development agencies has also been explored, with some countries, such as the United Kingdom, having established a significant number of PPPs. The Obama Administration's 2010 Quadrennial Diplomacy and Development Review (QDDR) emphasized the importance of leveraging the private sector, philanthropic, and non-governmental organizations, and diaspora communities in development efforts. The QDDR also highlighted the need for improved data and evaluation to assess the effectiveness of PPPs. The report discusses partnership-related issues that may be of interest to Congress as part of the foreign assistance authorization and reform process, including budget and procurement policies, interagency leadership, international commitments, and the role of aid within broader development policy.