Development Co-operation Report 2016
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branch II. Profiles of development co-operation providers
  branch Engaging the private sector in development co-operation: Learning from peers

Official development assistance is increasingly being delivered with and through the private sector. Valuable lessons are emerging from these experiences. The OECD's Development Assistance Committee (DAC) has recently launched a survey and peer learning exercise with its member countries to tap into these experiences and identify good practice. Many insights are emerging already from the survey and the first three reviews – of Germany, the Netherlands and Sweden. These include the value of private sector partnerships beyond their financial contribution, and the critical importance of investing in in-house capacities and expertise to successfully develop and manage partnerships with the private sector. The final synthesis report will identify best practices and lessons to help all DAC members refine their engagements with the private sector, including appropriate tools and partnerships to leverage private sector resources and enhance development impact; and measuring and evaluating results, impact, additionality and the catalytic effect of private sector engagements.

This section was prepared by Shannon Kindornay, Adjunct Research Professor, Carleton University and Rahul Malhotra, Development Co-operation Directorate, OECD.

There is a long history of private sector engagement in development co-operation. The OECD's Development Assistance Committee (DAC) member countries are increasingly developing partnerships with the private sector to leverage private capital, expertise, innovation and core business to benefit sustainable development. To learn from this experience and how it applies to development co-operation strategies and practices, the DAC has introduced an in-depth, thematic, peer-to-peer learning process on working with and through the private sector to complement the DAC Peer Reviews. 33 The peer learning exercise – which began in April 2015 – aims to identify good practice and lessons in private sector engagement. While a range of policy and academic literature has emerged on the role of the private sector in development co-operation in recent years, 34 the unique advantage of the peer learning exercise is that it is rooted in the current practice of DAC members as they transition towards greater and stronger private sector engagement.

The peer learning exercise was launched with a survey of all 29 DAC members and selected non-members to take stock of, and understand better, current priorities and practices. Twenty-seven responses were received. Following the survey, the OECD organised an inception workshop, convening private sector focal points from member country governments to share lessons and to refine the analytical scope and desired outcomes of the peer learning exercise.

Four DAC members – Germany, the Netherlands, Sweden and the United States – volunteered to be reviewed. The Netherlands and Sweden were reviewed in November 2015, Germany in February 2016 and the United States will follow later in 2016. In addition, two  “spotlight” workshops will be held to explore key areas of interest to DAC members, namely innovative financial and non-financial instruments for private sector engagement, and development and financial additionality. 35

This chapter describes the analytical framework for the peer learning exercise, summarises the main insights from the survey and brings together key lessons emerging from the reviews of Germany, the Netherlands and Sweden.

33.  For more information, see: www.oecd.org/dac/peer-reviews.
34.  Recently, see for example, Chandrasekhar (2015), Vaes and Huyse (2015) and Guarnaschelli et al. (2015).
35.  In the area of private sector engagement, additionality typically refers to the extent to which an outcome is additional to what otherwise would have occurred without public support.
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