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POLICY DIRECTIONS & FRAMEWORKS FOR EVALUATING EFFECTIVENESS - Coggle…
POLICY DIRECTIONS & FRAMEWORKS FOR EVALUATING EFFECTIVENESS
Recent Direction: Increasing Emphasis on the Private Sector
There is a growing call for the private sector to engage in solving some of the world’s biggest problems, specifically including poverty alleviation. Contemporary debate has shifted from 'if' to 'how', the corporate sector can address issues.
UNITED NATIONS INITIATIVES:
1. Business Call to Action:
Launched in 2008
Multilateral alliance between aid donor governments and the UN Development Programme (UNDP)
Calls on companies to commit to improving the lives and livelihoods of the poor in developing countries through their business practice.
Over 190 companies, ranging from multinationals to large social enterprises, in 65 countries, have responded to the BCtA, committing to assist the poor through access to markets, financial services, affordable healthcare, water and sanitation, education and other critical services.
2. Millennium Development Goals:
'Millenniunm Declaration' launched in 2000 by the United Nations General Assembly.
The 8 Millennium Development Goals (MDGs) were created as the as the mechanism to fulfil these aspirations, with goals and targets set for achievement by the end of 2015.
These global goals aimed to halve extreme poverty and make significant progress on global health, education, gender and environmental sustainability.
Implementation of the MDGs primarily focussed on governments and international development agencies. However, MDG 8 in particular called for a Global Partnership for Development, with two of the targets relying on engagement by the private sector. (The focus of MDG8 was on official development assistance (ODA), market access (trade), debt sustainability, access to affordable essential medicines and access to new technologies.)
3. Sustainable Development Goals:
The UN General Assembly adopted the 'Resolution Transforming Our World: The 2030 Agenda for Sustainable Development' in 2015.
It is the UN’s post-2015 development agenda, offering offer an inspiring and inclusive vision of the future: a world free from absolute poverty, hunger, injustice and discrimination, with lower levels of inequality and better health, education, gender equality, clean water, etcetera —and a healthy planet for present and future generations.
It aspires to achieving sustainable economic growth with decent employment for all, while protecting the planet through clean energy, climate action, ocean conservation, combatting deforestation and land degradation, halting loss of biodiversity, sustainable cities, responsible consumption, and so on.
Millennium Development Goals (MDGs):
A range of initiatives began as a result of the MDG's, with the aim of extending this to incorporate the role of business and the private sector more extensively in pursuit of the MDGs.
These initiatives include:
The UNDP’s Istanbul Global Policy Center on Private Sector in Development
The Business Call to Action
The Business for Millennium Development (now Business for Development)
The Shared Value Initiative
It is essential to observe the growing significance attributed to the private sector's involvement in development. The concept of 'corporate approaches,' in a broad sense, has progressively assumed a more central position in development ideology in recent decades.
Sustainable Development Goals (SDGs):
In achieving these goals, significant emphasis is placed on the need for cooperation between governments, the private sector and the non-government/civil society sector.
Throughout the consultation and negotiation process leading to the adoption of the SDGs, the private sector was continually highlighted as a partner with the potential to contribute in multiple ways to development objectives:
stimulating economic growth and job creation
providing investment and finance
leading innovation and entrepreneurialism towards solutions
sharing the resources and knowledge
The 2030 Agenda for Sustainable Development thus calls on deliberate inclusion of the private sector, at every level from sole-trader and microenterprises to multinational corporations.
Many for-profit companies are moving beyond the concept of corporate social responsibility and philanthropy, towards core business models that focus on improving people’s lives while generating profit, in part with an understanding these models are inherently reproducible and potentially transformative of the entire economy.
At the same time, renewed emphasis on creating livelihoods and incomes also requires focus on stimulating microenterprise (self-employed, sole traders or owner-operators) and—where appropriate—microfinance to support this.
And of course, social enterprise models are multiplying, aimed at employing commercial strategies to make a profit largely or entirely directed toward funding activities aimed at improving human and environmental well-being.
Another early response to the SGDs has been the 'Global Partnership for Effective Development Cooperation', bringing together governments, bilateral and multilateral organisations, civil society and the private sector. Development cooperation was previously focussed around the OECD’s Development Assistance Committee. The GPEDC formal partnership with 161 countries and 56 multilateral organisations, with a series of business forums and emphasis on the role of the private sector in development.
AUSTRALIAN AID PRIORITIES:
Increasing engagement with the private sector is now central to Australia’s aid program.
Shortly after the Abbott Coalition government returned to power, in 2013 then Foreign Minister Julie Bishop launched an inquiry into ‘The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific region’. The inquiry received 154 submissions, which the government tool as a sign of strong support from the private sector and aid agencies.
On the back of this, Julie Bishop announced a new aid policy in June 2014 (our current aid policy) called ‘Promoting prosperity, reducing poverty, enhancing stability’.
This is not to say that former governments ignored the private sector in international development assistance, but the Abbott-Turnbull Coalition governments have certainly increased the emphasis.
Aus DFAT Private Sector Development:
There is increasing recognition of the private sector's role in development efforts. The page
There's an emphasis on the importance of engaging businesses and corporations to address development challenges, as they can contribute resources, expertise, and innovative solutions. It also mentions how
Partnerships between governments, non-governmental organizations (NGOs), and the private sector can lead to sustainable and inclusive development outcomes.
The overall aim is to leverage the private sector's capabilities to promote economic growth, create jobs, and improve living conditions in developing countries.
DFAT (2015)
'Strategy for Australia's aid investments in private sector development'
Publication:
The Australian aid program has identified
social protection
as one of its six key priorities to build resilience in partner countries. Social protection encompasses programs that address risk, vulnerability, inequality, and poverty through cash or in-kind transfers to people in need. It serves three core functions: protecting the poor from the worst impacts of poverty, preventing income shocks, and promoting opportunities and livelihoods.
There is substantial evidence supporting the positive impacts of social protection on various aspects, such as food security, health, education, work access, market stimulation, and macroeconomic reforms. Australia's approach involves helping partner governments improve their systems to effectively distribute their own funds rather than directly funding the transfers.
While social protection is important for low-income countries, it is particularly relevant in middle-income countries, where such systems play a significant role in economic development and attract high political interest in their effectiveness. Australia's involvement in social protection has already yielded positive results, earning respect through commitment to south-south learning, adaptability in support, and active participation in global policy discussions.
The investment in social protection aligns with the aid program's focus on economic growth and poverty reduction, pursued through three strategic objectives: expanding social protection coverage in the Indo-Pacific, improving the quality of social protection systems, and enhancing partner governments' ability to make informed choices about social protection options. Australia's engagement in this area will concentrate on refining and developing social protection systems and strengthening partner governments' and stakeholders' knowledge on social protection.
What is Social Protection?
Social protection refers to programs that address risk, vulnerability, inequality and poverty through a system of transfers to people in cash or in kind.
The transfers can be funded by contributions from recipients (social insurance) or by government (social assistance). The Australian Government primarily supports work on social assistance, also known as social safety nets, as the focus of these programs is normally on the poor and vulnerable (as opposed to social insurance which is mainly for the non-poor). The transfers can take a variety of forms such as financial grants, food transfers, cash-for-work, and school-feeding.
Transfer programs generally aim to reach the poor and vulnerable but can be designed in many ways, depending on the objectives. The transfers can be conditional or unconditional. Conditions can include commitments to send children to school, having pre- and post-natal care, or taking part in cash-for-work programs. Conditional programs dominate in Latin America but are becoming more popular in Asia. They are used to promote behavioural change, or for political reasons when only a conditional program is considered acceptable. The transfers can be targeted to the poor or to categories of the population (for example the elderly, families with children, people with disabilities) to ensure that resources reach the intended population.
Social protection contributes to growth and poverty reduction. Social protection goes beyond the provision of basic needs and is a core contributor to economic development by helping to mitigate risk, stimulate the economy, link people to the labour market, strengthen stability and build human capital. It is also a key component of building resilience so people can better withstand and bounce back from shocks.
DFAT (2015)
'Aid Policy Summary'
Publication:
Australia's new development policy, "Australian aid: promoting prosperity, reducing poverty, enhancing stability," and the accompanying performance framework, "Making Performance Count," introduce significant shifts in the country's aid program. The reforms aim to enhance the effectiveness of Australian aid in promoting economic growth, reducing poverty, and safeguarding Australia's interests in the Indo-Pacific region.
The need for change is driven by the evolving global landscape, with many developing countries experiencing rapid growth and aid representing a smaller portion of development finance. In response, Australia's aid must become more innovative and leverage other development drivers, such as private sector investment and domestic finance.
The geographical focus of the aid program will be sharpened, targeting the Indo-Pacific region, particularly South East Asia and the Pacific. The program will concentrate on two main development outcomes: supporting private sector development and strengthening human development, encompassing education, health, and gender equality.
The aid program's delivery will be guided by four tests: pursuing national interests and extending Australia's influence, impacting growth and poverty reduction, reflecting Australia's value-add and leverage, and making performance count. Selectivity will be applied in determining program activities and partners.
To reinforce efforts in reshaping the aid program, the Making Performance Count framework will introduce 10 high-level targets, emphasizing outcomes related to promoting prosperity, engaging the private sector, reducing poverty, empowering women and girls, focusing on the Indo-Pacific region, delivering on commitments, working with effective partners, ensuring value-for-money, increasing consolidation, and combating corruption.
At all levels of the aid program, performance will be rigorously assessed, and funding will be linked to results achieved. Projects showing positive outcomes will be expanded or replicated, while those falling short will be adjusted or canceled. The new performance framework seeks to ensure that Australian aid delivers the most significant development impact and maximizes taxpayer money spent on aid initiatives.
What is the purpose of business in contemporary society?
The purpose of business in contemporary society encompasses two main roles:
It is commonly seen as a means to create wealth and financial prosperity. Although the pursuit of money can be associated with negative traits like greed and self-interest, it is also linked with promoting well-being and welfare, not just for business owners and workers, but potentially for society as a whole.
Businesses play a crucial role in meeting the increasing demands and desires for goods and services in the world. This extends from essential needs like food, energy, and water supply, to critical services like healthcare and life-saving medicines, as well as information, community, and education.
The social investment of businesses varies along a spectrum, ranging from a focus primarily on wealth creation for shareholders and owners to a broader intention of benefiting society at large. The balance between wealth creation and social benefit intentions can vary greatly among businesses and may be subject to ongoing debate and interpretation.
KEY CONCEPTS:
Philanthropy -
private sector (businesses or individuals) giving charitable donations out of their profits - often called philanthrocapitalism in the literature.
Corporate Social Responsibility (CSR) -
fulfilment of the economic, legal, ethical and discretionary expectations that society has of organisations, beyond legal registrations and compliance, and beyond the responsibility to shareholders to make a profit, based out of social values, in fulfilment of the social licence to operate and create wealth.
Inclusive Business -
businesses that benefit low‐income communities, keeping their for‐profit nature but contributing to poverty reduction through the inclusion of low‐income communities in their value chain. This approach is predicated on a belief that expanding markets and maximising profit can be aligned with development outcomes, creating motives for companies to engage and economic opportunities for the poor and disadvantaged.
Shared Value -
businesses that purposefully reorientate to strategies that create both economic and social value, seeking to create value by identifying and addressing social needs that intersect with their business.
Social Enterprise -
organisations that employ commercial strategies to financially sustain activities primarily aimed at social investment to improving human and environmental well-being—these may be for-profit companies with social aims, or non-profit companies, and they may generate the social benefit through the commercial activities, or fund development activities from the majority or entirety of the profits.
'Bottom of the pyramid business' -
a business strategy seeking to generate profit by delivering affordable services and/or products to the poor (those at the ‘bottom of the pyramid’), in a manner that also assists alleviate their poverty.
Microenterprise -
an approach seeking to stimulate small scale business (sole-traders, owner-operators, self-employed, etc), to help alleviate poverty by facilitating entrepreneurship as a form of financial self-help amongst the poor.
Microfinance (or microcredit) / Financial inclusion -
a financial services for micro-entrepreneurs and small businesses otherwise lacking access to banking and related services.
Public-Private Partnership -
a cooperative arrangement between one or more public and private sectors, typically of a long term nature, often between a public authority and a private company and/or civil society agency.
Davies R & Callan M (2014)
‘The Varieties of Engagement’
- Devpolicy’s submission to the parliamentary inquiry into the role of the private sector in development:
The authors' key contention is that the Australian government's aid program should do more to support private sector development in the Indo-Pacific region. They believe that there are significant opportunities for engagement with both the local private sector in developing countries and the international private sector to achieve development outcomes. The authors emphasize the need for clear objectives, dedicated mechanisms, and adequate funding to facilitate practical and selective engagement with the private sector. They advocate for specific programs tailored to the objective, and they encourage the continuation and modification of the enterprise challenge fund to focus on developing inclusive and innovative local enterprises. Additionally, the authors suggest the establishment of a central capacity within DFAT to manage corporate relations and independent inclusive business brokers. Their key contention is that an enhanced focus on private sector engagement can lead to more effective development outcomes in the Indo-Pacific region.
Sunder, P (2015)
'A shared value? The role of the private sector in international development'
, DevPolicy:
The author's key contention is that the Australian private sector lags behind international counterparts in engaging in shared value projects for development. The government's strategy on private sector engagement is seen as a positive step, but the author emphasizes the need for more Australian companies to recognize the benefits of incorporating development considerations into their core business strategies. The author believes that by partnering with experienced NGOs and embedding development objectives in their operations, private sector organizations can achieve profits while contributing to broader prosperity and poverty reduction. Addressing development challenges requires positive action from all sectors, and encouraging private sector engagement can lead to more effective and sustainable development outcomes in the Indo-Pacific region and beyond.