Introduction
Why
should Private Sector Development (PSD) be a core element of
development strategies? Ultimately, the purpose of development aid is
the ‘graduation’ from foreign assistance altogether. This is only
possible where poor people earn a better living within their own
economy, without the risk of depending on outsiders for continuous
assistance.
By providing the poor with the capacity to find jobs and
improve their incomes, PSD lays the foundation for
their exit from charity. In addition, a growing private sector will ultimately enable governments in developing countries to generate the tax revenues needed to emulate government provision in more wealthy countries - of health care, education etc.
This page offers an overview of key information, data and arguments that underpin this rationale. Each section is linked to more detailed pages on the DCED website. They include success stories of how PSD has helped to reduce poverty at scale, and a results chain showing how different PSD interventions are expected to lead to pro-poor impacts – as a means to organise and reference the available evidence.
Success Stories
Are you looking for specific examples of the development impact of PSD? We have dedicated a
webpage to a collection of PSD programmes which report success
at scale in improving the living conditions of the poor through the creation of jobs and economic opportunities. Classified by different areas of intervention, they not only provide lessons on what kind of interventions seem to have
worked well, but also underscore the the value and benefits of PSD for wider development goals.
How PSD leads to Poverty Reduction - A Results Chain for the Evidence
The main goal of most private sector development interventions is to provide jobs and increase incomes for the poor in developing countries. The underlying logic of how PSD practitioners expect to achieve these pro-poor impacts is the subject of our ‘
Framework for Evidence’. This framework is designed as a results chain which organises the available evidence on results in PSD; this evidence can be viewed by clicking on the hyperlinked arrows in the chain.
The framework also links to sub-pages explaining the general rationale for different types of PSD interventions as well as the anticipated sequence of steps between these interventions and poverty reduction. You can also go directly to these pages, by clicking on the links below:
Updates on Research and Evidence on PSD
The DCED's publication "
Latest Research and Evidence on PSD" highlights
some
of the most interesting recent PSD-related research, evidence and
trends. It draws on books, academic journals and studies from various
sources and is sent out regularly via the DCED's mailing list.
Beyond the Evidence: Getting the Message Out
Communicating the Values behind PSD - A Briefing Note
Although PSD offers one of the most important routes out of poverty, some key supporters of development aid seem uncomfortable with it. Might this be because we have not articulated with sufficient clarity the values behind our work on PSD? Have we focused too much on the 'what we do' and not enough on the 'why'? The DCED commissioned Chris Rose to consider this question, and his findings are presented in a 3-page
Briefing Note.
Quotes from International Thought Leaders and Practitioners in Economic Development
Our
'Quotes on PSD' page compiles 'quotable quotes' on Private
Sector Development (PSD) - comments and extracts of speeches by
prominent individuals, academics and development practitioners, as well
as quotes from publications, that illustrate the crucial role of PSD for
development and poverty reduction.
How Businesses brings Dignity to the Poor - A Video of the Acumen Fund
Entrepreneurs from across the developing world talk about how their work brings dignity to the lives of the poor.
PSD Strategies of Member Agencies
The specific rationales for private sector development presented by different DCED member agencies, as well as their focal areas in developing the private sector, can be found in their PSD strategies. Links to the PSD strategies and short summaries can be found here.
Photographs courtesy of Charles Bodwell, Rajat Kumar Das, Sudipto Das