In the past decade, a remarkable shift has occurred in the development landscape. Specifically, acknowledgment of the central role of the private sector in contributing to, even driving, economic growth and global development has grown rapidly. The data on financial flows are dramatic, indicating reversal of the relative roles of official development assistance and private financial flows. This shift is also reflected in the way development is framed and discussed, never more starkly than in the Addis Abba Action Agenda and the new set of Sustainable Development Goals (SDGs). The Millennium Development Goals (MDGs), which the SDGs follow, focused on official development assistance. In contrast, while the new set of global goals does not ignore the role of official development assistance, they reorient attention to the role of the business sector (and mobilizing host country resources).

The U.S. Agency for International Development (USAID) has been in the vanguard of donors in recognizing the important role of the private sector to development, most notably via the agency’s launch in 2001 of a program targeted on public-private partnerships (PPPs) and the estimated 1,600 USAID PPPs initiated since then. This paper provides a quantitative and qualitative presentation of USAID’s public-private partnerships and business sector participation in those PPPs. The analysis offered here is based on USAID’s PPP data set covering 2001-2014 and interviews with executives of 17 U.S. corporations that have engaged in PPPs with USAID.

The genesis of this paper is the considerable discussion by USAID and the international development community about USAID’s PPPs, but the dearth of information on what these partnerships entail. USAID’s 2014 release (updated in 2015) of a data set describing nearly 1,500 USAID PPPs since 2001 offers an opportunity to analyze the nature of those PPPs.

On a conceptual level, public-private partnerships are a win-win, even a win-win-win, as they often involve three types of organizations: a public agency, a for-profit business, and a nonprofit entity. PPPs use public resources to leverage private resources and expertise to advance a public purpose. In turn, non-public sectors—both businesses and nongovernmental organizations (NGOs)—use their funds and expertise to leverage government resources, clout, and experience to advance their own objectives, consistent with a PPP’s overall public purpose. The data from the USAID data set confirm this conceptual mutual reinforcement of public and private goals.

The goal is to utilize USAID’s recently released data set to draw conclusions on the nature of PPPs, the level of business sector engagement, and, utilizing interviews, to describe corporate perspectives on partnership with USAID.

The arguments regarding “why” PPPs are an important instrument of development are well established. This paper presents data on the “what”: what kinds of PPPs have been implemented and in what countries, sectors, and income contexts. There are other research and publications on the “how” of partnership construction and implementation. What remains missing are hard data and analysis, beyond the anecdotal, as to whether PPPs make a difference—in short, is the trouble of forming these sometimes complex alliances worth the impact that results from them?

The goal of this paper is not to provide commentary on impact since those data are not currently available on a broad scale. Similarly, this paper does not recommend replicable models or case studies (which can be found elsewhere), though these are important and can help new entrants to join and grow the field. Rather, the goal is to utilize USAID’s recently released data set to draw conclusions on the nature of PPPs, the level of business sector engagement, and, utilizing interviews, to describe corporate perspectives on partnership with USAID.

The decision to target this research on business sector partners’ engagement in PPPs—rather than on the civil society, foundation, or public partners—is based on several factors. First, USAID’s references to its PPPs tend to focus on the business sector partners, sometimes to the exclusion of other types of partners; we want to understand the role of the partners that USAID identifies as so important to PPP composition. Second, in recent years much has been written and discussed about corporate shared value, and we want to assess the extent to which shared value plays a role in USAID’s PPPs in practice.

The paper is divided into five sections. Section I is a consolidation of the principal data and findings of the research. Section II provides an in-depth “data picture” of USAID PPPs drawn from quantitative analysis of the USAID PPP data set and is primarily descriptive of PPPs to date. Section III moves beyond description and provides analysis of PPPs and business sector alignment. It contains the results of coding certain relevant fields in the data set to mine for information on the presence of business partners, commercial interests (i.e., shared value), and business sector partner expertise in PPPs. Section IV summarizes findings from a series of interviews of corporate executives on partnering with USAID. Section V presents recommendations for USAID’s partnership-making.

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Brookings today releases a report USAID’s Public-Private Partnerships: A Data Picture and Review of Business Engagement, which will be the subject of a public discussion on March 8 featuring a panel of Jane Nelson (Harvard University), Ann Mei Chang (U.S. Agency for International Development (USAID)), Johanna Nesseth Tuttle (Chevron Corp.), and Sarah Thorn (Wal-Mart Stores Inc.).

The report is based on USAID’s database of 1,481 public-private partnerships (PPPs) from 2001 to 2014 and a series of corporate interviews.

The value of those partnerships totals $16.5 billion, two-thirds from non-U.S. government sources – private companies, nongovernmental organizations (NGOs), foundations, and non-U.S. public institutions. Over 4000 organizations have served as resource partners in these PPPs.  Fifty-three percent are business entities, 32 percent are from the non-profit world, and 25 percent are public institutions. Eighty-five organizations have participated in five or more PPPs, led by Microsoft (62), Coca Cola (36), and Chevron (33).

The partnerships are relatively evenly distributed among three major regions—Africa, Latin American/Caribbean, and Asia—but 36 percent of the value of all PPPs is from partnerships that are global in reach.

In analyzing the data, the researchers found that 77 percent of PPPs included one or more business partner, and that 83 percent of these partnerships are connected to a business partner’s commercial interest (either shared value or more indirect strategic interest). In almost 80 percent of those PPPs, the business partner contributes some form of corporate expertise to the partnership.

The purpose of the March 8 panel discussion is to examine the report but also to go beyond by addressing outstanding questions like: how should the impact of public-private partnerships be identified, measured, and evaluated? Is shared value the Holy Grail linking corporate interest to public goods and achieving sustainable results? Where do public-private partnerships fit in USAID’s strategy for engaging the private sector in development, particularly in light of the emphasis on the role of business in advancing the new set of Sustainable Development Goals?

We hope you can join us for what should prove to be an engaging discussion.

I write this as I learn of the beating death of an Azerbaijani journalist Rasim Aliyev. His “crime” was to post a Facebook item about football. What follows seems insignificant compared to his murder.

Two articles have appeared in prominent Western outlets in the past month addressing developments in the South Caucasus and the need for adjustments in U.S. (and Western) policy toward the region. The first was an excellent, in-depth Brookings report titled "Retracing the Caucasian Circle—Considerations and Constraints for U.S., EU, and Turkish Engagement in the South Caucasus"; the second was a shorter essay that Bill Courtney, Denis Corboy, and I penned for Newsweek on the need to reboot policy toward Armenia, Azerbaijan, and Georgia. Both reflected the difficulty of writing about the “South Caucasus” as if the three countries had common interests and objectives. Increasingly these interests and objectives are diverging, except for a growing unhappiness with the United States and the West for not paying attention to—or doing enough to support—the region. In the case of Azerbaijan, the frustration stems from U.S. leaders paying too much attention to the appalling human rights situation in the country.

What’s making the Azerbaijanis so upset with the West?

The authors of the Brookings report point to elite cynicism over Western disinterest and policy failures in the region as sources of Azerbaijani leaders’ unhappiness. This, in their view, is causing Armenia, Georgia, and Azerbaijan—for different reasons and in different ways—to tack toward Russia.

We have a different take in our Newsweek piece. We argue that the unhappiness results from governing elites recognizing that U.S. and Western policy regarding human rights, democracy building, corruption, and conflict resolution (especially the Nagorno-Karabakh conflict) threaten regime stability. Therefore, the tacking toward Russia is a conscious choice to avoid pressure and the transparency that closer association with the United States and Europe would involve.

The new orientation of these countries requires serious adjustment in Western policies. There are four new drivers prompting change (beyond the role of Russia): the regional consequences of the Iran nuclear agreement; the growing economic crisis, which is affecting the South Caucasian states in different ways; the threat of renewed military conflict between Armenia and Azerbaijan; and the internal security implications of suppression of human rights. While each country responds to these drivers in different ways, they are the source of a new dynamic in the South Caucasus that requires a fresh Western policy approach.

Three wild cards will shape these drivers and the Western approach to them: First, how hard will Russian President Vladimir Putin push his objective of rolling back the degree of Western influence achieved since the fall of the Soviet Union? Second, how well will Iran play the nuclear agreement card, especially regarding its reentry into global energy markets? Third, how distracting will Turkey’s military response to the Islamic State and the Kurdistan Workers’ Party (PKK) be for Turkey’s interests in the South Caucasus and its objective of becoming a regional energy hub?

The shortcomings of soft regionalism

What is to be done? Faced with such a challenging situation, the default policy response is to provide more assistance (economic and military), dispatch senior officials from Western capitals to visit the region, and indulge (rather than criticize) democracy and human rights abuses, all in the name of developing a strategic partnership. In other words: Show more love.

That business-as-usual approach is inappropriate for these challenging times. In the case of Azerbaijan, it is an inappropriate response to the continued violations by the Baku regime of basic human rights and freedom of expression.

The Brookings paper suggests a multilateral approach (involving the United States, EU, and Turkey) based on soft regionalism. I do not believe that soft regionalism will work. The best we can hope for is parallel bilateral engagement on the basis of common interests (e.g. conflict prevention) and shared values (e.g. democratic evolution, observance of human rights). We need to treat the energy issue in the region as a commercial rather than geopolitical one. Changes in the global energy market have undermined the geopolitical significance of Caspian energy resources compared to two decades ago. With low energy prices likely the norm for the near future, energy no longer plays a strategic role for the region. Among other weaknesses, the soft regionalism prescription implies coordinated interests with Turkey—this will be difficult absent an opening in Turkish-Armenian relations.

Who needs who more?

The burden of choice in this relationship with the West must shift from the outside parties to the South Caucasian states themselves. The outsiders should stop talking about “strategic” partnerships, trans-Caspian pipelines and Silk Roads because this perpetuates a “you-need-us-more-than-we-need-you” starting point. Rather, the time has come for Armenia, Azerbaijan, and Georgia to decide on their own where their interests coincide with those of the West. That’s where we and they can begin to develop meaningful relationships, rather than trying to invent a veneer to cover differences—as in the case of Azerbaijan’s record on human rights.

Another recent article in Newsweek, by Theodore Gerber and Jane Zavisca, raised questions about promoting democracy and human rights where populations and elites are skeptical of U.S. motivations in promoting these issues. Fairly, the article questions the effectiveness of the traditional instruments of promoting opposition political parties and local NGOs as a way of winning “hearts and minds” in the former Soviet Union. Unfortunately, these traditional instruments tend to emphasize the attractiveness of the “American way of life” through student and scientific exchanges. This offers a variant on the soft regionalism theme advanced in the Brookings paper. Both require a receptivity to change that both elites and populations increasingly find threatening. Developing a values-based relationship is difficult when values diverge.

To the extent our interests do not coincide, then the Western policy focus must be transactional and rest exclusively on conflict prevention and/or amelioration. It also should not shy away from pressing all three South Caucasian states on their obligations to observe international standards regarding human rights, democracy, and freedom of expression.

An academic-industrial partnership published last January in the prestigious journal Nature the results of the development of antibiotic teixobactin. The reported work is still at an early preclinical stage but it is nevertheless good news. Over the last decades the introduction of new antibiotics has slowed down nearly to a halt and over the same period we have seen a dangerous increase in antibiotic resistant bacteria.

Such is the magnitude of the problem that it has attracted the attention of the U.S. government. Accepting several recommendations presented by the President’s Council of Advisors on Science and Technology (PCAST) in their comprehensive report, the Obama Administration issued last September an Executive Order establishing an interagency Task Force for combating antibiotic resistant bacteria and directing the Secretary of Human and Health Services (HHS) to establish an Advisory Council on this matter. More recently the White House issued a strategic plan to tackle this problem.

Etiology of antibiotic resistance

Infectious diseases have been a major cause of morbidity and mortality from time immemorial. The early discovery of sulfa drugs in the 1930s and then antibiotics in the 1940s significantly aided the fight against these scourges. Following World War II society experienced extraordinary gains in life expectancy and overall quality of life. During that period, marked by optimism, many people presumed victory over infectious diseases. However, overuse of antibiotics and a slowdown of innovation, allowed bacteria to develop resistance at such a pace that some experts now speak of a post-antibiotic era.

The problem is manifold: overuse of antibiotics, slow innovation, and bacterial evolution.

The overuse of antibiotics in both humans and livestock also facilitated the emergence of antibiotic resistant bacteria. Responsibility falls to health care providers who prescribed antibiotics liberally and patients who did not complete their prescribed dosages. Acknowledging this problem, the medical community has been training physicians to avoid pressures to prescribe antibiotics for children (and their parents) with infections that are likely to be viral in origin. Educational efforts are also underway to encourage patients to complete their full course of every prescribed antibiotic and not to halt treatment when symptoms ease. The excessive use of antibiotics in food-producing animals is perhaps less manageable because it affects the bottom line of farm operations. For instance, the FDA reported that even though famers were aware of the risks, antibiotics use in feedstock increased by 16 percent from 2009 to 2012.

The development of antibiotics—perhaps a more adequate term would be anti-bacterial agents—indirectly contributed to the problem by being incremental and by nearly stalling two decades ago. Many revolutionary innovations in antibiotics were introduced in a first period of development that started in the 1940s and lasted about two decades. Building upon scaffolds and mechanisms discovered theretofore, a second period of incremental development followed over three decades, through to 1990s, with roughly three new antibiotics introduced every year. High competition and little differentiations rendered antibiotics less and less profitable and over a third period covering the last 20 years pharmaceutical companies have cut development of new antibiotics down to a trickle.

The misguided overuse and misuse of antibiotics together with the economics of antibiotic innovation compounded the problem taking place in nature: bacteria evolves and adapts rapidly.

Current policy initiatives

The PCAST report recommended federal leadership and investment to combat antibiotic-resistant bacteria in three areas: improving surveillance, increasing the longevity of current antibiotics through moderated usage, and picking up the pace of development of new antibiotics and other effective interventions.

To implement this strategy PCAST suggested an oversight structure that includes a Director for National Antibiotic Resistance Policy, an interagency Task Force for Combating Antibiotic Resistance Bacteria, and an Advisory Council to be established by the HHS Secretary. PCAST also recommended increasing federal support from $450 million to $900 million for core activities such as surveillance infrastructure and development of transformative diagnostics and treatments. In addition, it proposed $800 million in funding for the Biomedical Advanced Research and Development Authority to support public-private partnerships for antibiotics development.

The Obama administration took up many of these recommendations and directed their implementation with the aforementioned Executive Order. More recently, it announced a National Strategy for Combating Antibiotic Resistant Bacteria to implement the recommendations of the PCAST report. The national strategy has five pillars: First, slow the emergence and spread of resistant bacteria by decreasing the abusive usage of antibiotics in health care as well as in farm animals; second, establish national surveillance efforts that build surveillance capability across human and animal environments; third, advance development and usage of rapid and innovative diagnostics to provide more accurate care delivery and data collection; forth, seek to accelerate the invention process for new antibiotics, other therapeutics and vaccines across all stages, including basic and applied research and development; finally, emphasize the importance of international collaboration and endorse the World Health Organization Action Plan to address antimicrobial resistance.

University-Industry partnerships

Therefore, an important cause of our antibiotic woes seems to be driven by economic logic. On one hand, pharmaceutical companies have by and large abandoned investment in antibiotic development; competition and high substitutability have led to low prices and in their financial calculation, pharmaceutical companies cannot justify new developmental efforts. On the other hand, farmers have found the use of antibiotics highly profitable and thus have no financial incentives to halt their use.

There is nevertheless a mirror explanation of a political character.

The federal government allocates about $30 billion for research in medicine and health through the National Institutes of Health. The government does not seek to crowd out private research investment; rather, the goal is to fund research the private sector would not conduct because the financial return of that research is too uncertain. Economic theory prescribes government intervention to address this kind of market failure. However, it is also government policy to privatize patents to discoveries made with public monies in order to facilitate their transfer from public to private organizations. An unanticipated risk of this policy is the rebalancing of the public research portfolio to accommodate the growing demand for the kind of research that feeds into attractive market niches. The risk is that the more aligned public research and private demand become, the less research attention will be directed to medical needs without great market prospects. The development of new antibiotics seems to be just that kind of neglected medical public need. If antibiotics are unattractive to pharmaceutical companies, antibiotic development should be a research priority for the NIH. We know that it is unlikely that Congress will increase public spending for antibiotic R&D in the proportion suggested by PCAST, but the NIH could step in and rebalance its own portfolio to increase antibiotic research. Either increasing NIH funding for antibiotics or NIH rebalancing its own portfolio, are political decisions that are sure to meet organized resistance even stronger than antibiotic resistance.

The second mirror explanation is that farmers have a well-organized lobby. It is no surprise that the Executive Order gingerly walks over recommendations for the farming sector and avoid any hint at an outright ban of antibiotics use, lest the administration is perceived as heavy-handed. Considering the huge magnitude of the problem, a political solution is warranted. Farmers’ cooperation in addressing this national problem will have to be traded for subsidies and other extra-market incentives that compensate for loss revenues or higher costs. The administration will do well to work out the politics with farmer associations first before they organize in strong opposition to any measure to curb antibiotic use in feedstock.

Addressing this challenge adequately will thus require working out solutions to the economic and political dimensions of this problem. Public-private partnerships, including university-industry collaboration, could prove to be a useful mechanism to balance the two dimensions of the equation. The development of teixobactin mentioned above is a good example of this prescription as it resulted from collaboration between the university of Bonn Germany, Northeastern University, and Novobiotic Pharmaceutical, a start-up in Cambridge Mass.

If the NIH cannot secure an increase in research funding for antibiotics development and cannot rebalance substantially its portfolio, it can at least encourage Cooperative Research and Development Agreements as well as university start-ups devoted to develop new antibiotics. In order to promote public-private and university-industry partnerships, policy coordination is advised. The nascent enterprises will be assisted greatly if the government can help them raise capital connecting them to venture funding networks or implementing a loan guarantees programs specific to antibiotics.  It can also allow for an expedited FDA approval which would lessen the regulatory burden. Likewise, farmers may be convinced to discontinue the risky practice if innovation in animal husbandry can effectively replace antibiotic use. Public-private partnerships, particularly through university extension programs, could provide an adequate framework to test alternative methods, scale them up, and subsidize the transition to new sustainable practices that are not financially painful to farmers.

Yikun Chi contributed to this post

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