Structural Adjustment, Policy Reform and Public Private Partnerships

1
Structural Adjustment, Policy Reform andPublic
Private Partnerships

• 1979-2001

2
Contemporary North-South Issues

• Overview Of Financial and Budgetary Management
  Systems in LDCs

3
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

4
Domestic Management Systems and International
Influences

• Six historical periods of budgetary and fiscal
  management
• 1950s 1960s
• Growthdomestic development funds with bilateral
  technical assistance
• Relationship between Command economy and the
  market
• Keynesianism and the controversial models Soviet
  Union, India

5
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

6
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

7
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

8
Domestic Management Systems and International
Influences

• Six historical periods of budgetary and fiscal
  management
• 1990s
• Collapse of the Soviet Union
• Clash of civilizations

9
Second World as New Debtors

• Chad vs. Russia
• Transitional States
• Rise of Asia and blocks
• Crisis in Asia and the return to debt management

10
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

11
Current State of Financial Management

• ConditionalityWorld 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

12
Current State of Financial Management

• Realitythe 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

13
Current State of Financial Management

• Key ConditionalityPrivatization of the economy
• Divestiture
• Contracting out
• Liquidation
• Sell off public private partnership shares

14
Current State of Financial Management

• ProblemPrivatization 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

15
Current State of Financial Management

• ProblemPrivatization of the bureaucracy
• Sub-economic salaries
• Offices, houses and telephonesbuying 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

16
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)

17
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?

18
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

19
Development of Underdevelopment

• Changing Terms Review
• Non-Western World
• Developing areas or nations
• Third World
• Southern Tier States
• LDCs
• UDCs
• Where are we now?

20
Public Private PartnershipsThe International
Context

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

21
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

22
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

23
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.

24
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

25
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

26
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

27
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

28

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