Objectives of the group
The PSE Working Group was formally established at the 2017 Annual Meeting in Rome in June. It is chaired by Gunter Schall of ADA, and Lars Stein of SDC. It builds on the work of various DCED meetings and publications in recent years (see below).
The OECD has proposed a very broad definition of PSE as ‘an activity that aims to engage the private sector for development results, and involves the active participation of the private sector’ (OECD, 2016). In practice, however, and as the DCED’s Working Group notes, ‘developing an operational framework … necessarily implies a need to narrow down the most relevant PSE categories … and to draw pragmatic boundaries’ (DCED PSE WG, 2017).
For more information on different PSE strategies and modalities, and how these related to other approaches for working with and through the private sector, you can view the working group’s operational framework here (working document).
A common trend across agencies is that they seek more equal, longer-term and strategic relationships with business in achieving results for the poor, thereby complementing from their traditional focus on bilateral work with governments. The aim of the Private Sector Engagement Working Group is to support donor agencies in the institutional changes needed to engage business this way – including by enhancing risk management, programming and funding frameworks; creating appropriate staff roles and team structures; and promoting the necessary staff skills and cultural changes to facilitate PSE.
A particular near-term interest of the group is to enhance the capacity of agency staff to engage with business – through skills development and operational guidelines. In order to identify common skills needs across agencies, as well as potential next steps that would benefit from a multi-donor approach, the group organised a participatory workshop in June 2018. The outcomes of the workshop are summarised in this report.
This section lists publications by the group as well as previous research on the theme produced by the DCED in line with member interest:
- Minimising the risk of negative market distortions in PSE. A practical framework, DCED, 2018. Reviews how PSE interventions may give rise to three types of negative market distortions and explores four practical solution areas: Designing against and measuring distortions; crowding in other commercial players; involving competition agencies and experts; and publishing information.
- How donors can support strategic private sector engagement. Programming innovations and organizational change – including insights from interviews with donor agencies as well as large international NGOs.
- Engaging the private sector through multi-stakeholder platforms – based on extensive interviews with DCED members, other platform participants and platform managers;
- Results Measurement in Impact Investing. A preliminary review – produced under the umbrella of the Results Measurement Working Group;
- How to create an enabling environment for inclusive business? Experiences and Debates in Private Sector Development – produced under the umbrella of the Business Environment Working Group; and
- Does Business Structure Influence Social Impact? Insights and practical implications for donors – a briefing note jointly developed with Oxfam.
- Many other thematic DCED documents have recently been updated, including an Overview of donor funds and facilities for partnering with business and approaches to screening potential partners. The DCED’s online portal on private sector engagement has been revamped and a new knowledge page has been launched.