The Role of the Private Sector in Development Assistance and Effectiveness

Publication Type: 
Center for Economic Development
Place of Publication: 
Along with governments and intergovernmental agencies, civil society and private business play an important role in international development cooperation. It is a general perception that private sector remains in the periphery of development assistance. To make sure private sector is more actively involved in development policy, it is necessary to formulate guiding principles for cooperation and joint actions between the government and private sector. This means that, firstly, a common approach and joint participation of both government and private companies is to be applied. Under budget restriction conditions, governments develop detailed plans for supporting development that cannot be implemented without private sector involvement. Secondly, private sector participation has to be enhanced by entrusting it with a more central role in donor operations on the basis of clear incentives and reference points. A better mutual complementation and use of private sector potential will provide for increasing the limited governmental resources. Government and private sector involvement in development assistance delivery process is different and hence, collaboration between them leads to a better effect in combating famine and poverty in countries assisted.