Now Open for Business: Joint Development Initiatives Between the Private and Public Sectors in Development Cooperation

The importance of the private sector for economic development is undisputable. Private actors - whether we talk about firms or other organizations - are an essential part of the web that forms a wellfunctioning society. However, the role of the private sector in development cooperation is more disputed, from proponents’ claim that supporting the growth and development of (formal) business is at the heart of what aid should do to antagonists’ view that aid could and should be used better than to increase profits for business. The present report is not about private sector development in partner countries per se. It studies the extent to which actors in the business sector can act as partners in development cooperation to help fulfil the objectives of aid. In the report, Sara Johansson de Silva, Ari Kokko, and Hanna Norberg map out the extent of, and analyse the potential development gains from, the formation of partnerships between public and private actors in Swedish development cooperation. Such partnerships, referred to as Joint Development Initiatives (JDI), are expected to realize mutual gains. Potential gains for public actors include an increase in reach and improved efficiency in delivery; additional (private) financial resources and innovative capacity. Potential gains for private sector actors include the emergence of new firms and markets when prohibitive risk levels are lowered through public involvement; market access and higher turnover for existing firms; and more socially responsible business practices, increasing the sustainability of firms.