Objectives of the Group
Many donors aspire to have more equal, longer-term and strategic relationships with business in achieving results for the poor, complementing their traditional focus on bilateral work with governments.
The aim of the Private Sector Engagement Working Group is to enhance the ability of donor agency staff to engage with business in this way – based on appropriate operational systems and programming frameworks as well as appropriate staff roles, skills and organisational culture.
The Working Group, established in 2017, is chaired by Katie Sell Garcia of USAID.
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). The DCED PSE Working Group in its Operational Framework (2019) focuses on two specific PSE strategies:
- Engaging with, primarily large/ international, companies on equal terms to enhance the impact of their core business on the SDGs, e.g. through the joint development and financing of SDG-oriented business models or dialogue platforms on responsible business practices. In contrast, other approaches involving active private sector participation focus more on local business (e.g. MSD) or local business associations and government agencies (e.g. BER), primarily to generate inclusive and sustainable economic opportunities (SDG 8).
- Engaging with the financial sector, to mobilise private finance for development, e.g. through blended finance instruments.
Key achievements of the Group
In addition to the recent products listed below, the Working Group has also organised several webinars and regular peer-learning workshops.
- Promoting Responsible Business Conduct: A scoping paper for donors supporting Private Sector Engagement, DCED, 2022
- Donor Engagement in Innovative Finance: Opportunities and Obstacles, DCED 2019. Provides a comprehensive introduction to, and overview of, the field.
- Private Sector Engagement. Synthesis Note, DCED, 2019
- 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, DCED 2017 – including insights from interviews with donor agencies as well as large international NGOs.
- Engaging the private sector through multi-stakeholder platforms, DCED 2017 – based on extensive interviews with DCED members, other platform participants and platform managers; and
- Overview of donor funds and facilities for partnering with business (DCED, 2017).
Current activities of the Group
Recent and ongoing focus areas of the Group include peer learning and publications around themes of interest to members, in particular:
- how to promote Responsible Business Conduct through PSE, based on the 2022 DCED scoping paper
- how to build staff capacity and incentives for PSE
- how to demonstrate additionality in PSE, with an update of the DCED’s 2014 guidelines on the topic planned in the coming months
- the short and long-term implications of the Covid-19 pandemic for PSE