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
1983-1991- End of Cold War and Dismantling of the
Soviet Union
Leftist Slogan- 1975
“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 intoThe 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 ReduxKey: 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- Issues1. 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 Reforms5. 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 PartnershipsPublic 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 PartnershipsThe 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 Partnerships4. 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 ServicesJail/County PolicePort AuthorityDistrict attorneycoroner
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)
Group Presentations