Panacea PPP - Public Private Partnerships in German Development Co-operation

10.10.2003: Executive Summary of a WEED working paper

The growing importance that Foreign Direct Investment has assumed for the countries of the South since the eighties simultaneously represented a threat to and an opportunity for de-velopment politics: a threat because given the hundreds of billions of US-Dollars involved, its own role in de-velopment was marginalised and de-legitimised and an opportunity be-cause it hoped that with new forms of co-operation with the private sec-tor, it would be able to achieve its goals of poverty eradication and sus-tainable development more quickly and more cost-effectively. Since then, both at the bilateral and the multilat-eral level of the UN and the World Bank, "Public Private Partnerships” and "Private Sector Participation” have been regarded as a suitable concept for intensive co-operation with private business that ostensibly creates a win-win situation for both sides. It is brought to bear particularly in the area of infrastructure and, to an increasing degree, in public service areas such as health in the hope that by involving private companies, addi-tional finance can be provided for development tasks. In German de-velopment politics, the term "Entwick-lungspartnerschaften (development partnerships)” is used to refer to this type of collaboration in the overall context of Development Co-operation. The PPP concept was introduced in German development politics by the ruling conservative-liberal coalition in the mid-nineties. It followed the ex-ample of neo-liberal policies pursued by multilateral finance and develop-ment organisations such as the World Bank and the IMF, which had increas-ingly been opting for boosting eco-nomic development by opening up markets to investment and trade since the early eighties. The state is to restrict its role to its "core activities” of ensuring framework conditions and taking regulatory measures in the case of "market failure”. Following the change of government in 1998, the red-green alliance of Social Democ-rats and Bündnis 90/The Greens declared "strategic partnerships for sustainable development” a core element of its development policy.

The full working paper (available in German only!) provides a PPP overview and gives a critical assessment of the concept.