Best Practice Report

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Public-private collaboration / Lessons in effective PPC design

5. Lessons in effective PPC design

Achieving green growth will require engagement from all parts of society to build new skills, unlock innovation, achieve more sustainable management of resources, and create new visions and pathways for how economies are developed and communities interact. This chapter has presented examples of how and under what circumstances resources, expertise, and innovative leadership can be mobilized through collaboration.

Whether collaborations are initiated by the government or by the private sector, their successful outcome is the result of careful design of the collaboration arrangements from the onset. Key attributes of successful collaborations are: 

  • Willingness to enter into collaboration. The most fruitful collaborations often emerge when unlikely partners come together to find solutions to the most pressing challenges. However, changing traditional government decision-making and societal structures to embrace and support collaboration can be difficult (Wondolleck and Yaffee, 2000). Entering into collaborations requires trust and willingness to think beyond traditional norms and processes. Facilitating this may require the creation of a process of forum that enables unlikely partners to come together as was the case with the Chiansi irrigation project.
  • Development of a shared vision, supported by clear and well-articulated goals. While the individual benefits that partners derive from the collaboration may differ, partners need to work towards a common vision and outcome for collaborations to succeed. This is highlighted through the Alaskan Halibut Fisheries Management example, whereby safety and profitability was a key driver for private vessel owners, while they shared a common understanding that sustainable fish stock management was the core goal of the program. 
  • Careful evaluation of the costs and benefits of collaboration. In design of PPPs, government agencies should formally assess costs and benefits during negotiations and express these in monetary terms through public value-for-money assessments. In collaborative PPCs, however, clearly determining and accounting for costs and benefits can be more challenging, since many issues and roles are complex and unfamiliar. While not all costs and benefits of PPCs can be expressed in monetary terms, partners should map these issues prior to engaging and deciding whether collaboration is appropriate.
  • Clear definition of roles and responsibilities through transparent governance systems. Studies examined here highlight the importance of transparency, accountability, identification, and avoidance of potential conflicts of interest, addressing information asymmetries, upfront specification of conflict resolution, understanding differences in drivers for businesses versus governments, and anticipating challenges as the collaboration evolves  (OECD, 2010 and UNESCAP, 2011). This will ensure that resources are effectively used, and governance of the collaboration is clear. Good practice for these differs widely depending on the partnership and goals it seeks to advance. In some cases, roles and responsibilities need to be defined in contractual relationships. In the case of the Punjab Grain Silos, contractual agreements clarified the roles and responsibilities of the private and public sector actors to ensure an efficient and effective outcome, while allowing flexibility in the means by which the outcome was achieved. The Business Innovation Facilities case, on the other hand, offers a much more flexible distribution of roles, with simple support for innovation through technical support. 
  • Broad and extensive stakeholder engagement. Consultation, along with the design of open and transparent collaboration processes, helps align the views of a large number of stakeholders such as international organizations, leading businesses, civil society organizations and communities. This was essential to the successful uptake and implementation of the Forest Stewardship Council standard, and the Alaskan Fisheries individual fishing quota management system.

The collaboration attributes listed above can be applied to all forms of collaboration – whether they are government-led, private-led, or collaboratively undertaken. While government-led collaborations will focus more on ensuring that roles and responsibilities are clearly defined through contractual agreements, collaboratively governed initiatives will have to carefully balance all of these attributes to ensure success.

This highlights the most important limitation demonstrated by the analysis of case studies: building capacity and establishing effective governance of the public and private collaboration can be costly in both financial and human capacity terms. Both public and private sector actors can find it hard to commit to collaboration over the long-term. As a result, it may not be a surprise that across all cases reviewed achieving scale with PPC is difficult. For example, the Business Innovation Facilities effectively create capacity in the private sector, but this success required extensive technical support with a high overhead. Similarly monitoring and evaluation systems used in the Alaskan Halibut Fisheries Management case are costly. If such costs are appropriately balanced against the positive outcomes, however, evidence suggests that public private collaboration can indeed be worthwhile.