1. USAID
and
Sida:
How
and
Why
they
Engage
in
PPPs
BACHELOR
THESIS
IN
POLITICAL
SCIENCE
2013-­‐14
SUPERVISOR:
JONATHAN
KUYPER
STINA
AHNLID
WORD
COUNT:
12
346
During
the
last
decade
public-­‐private
partnership
(PPP)
initiatives
have
taken
on
increased
importance
for
development
co-­‐operation
and
development
agencies
in
OECD-­‐
countries.
This
thesis
takes
a
closer
look
at
how
and
why
the
United
States
Agency
for
International
Development
(USAID)
and
the
Swedish
International
Development
Cooperation
Agency
(Sida)
engage
in
PPPs
to
achieve
development
objectives.
The
thesis
is
a
comparative,
cross-­‐national
case
study
using
a
framework
that
analyses
context,
actors,
and
governance
structure
in
the
PPP-­‐programs
of
USAID
and
Sida.
Differences
will
be
analyzed
using
a
theoretical
framework
taken
from
rational
choice
theory
inspired
by
Schäferhoff
et
al.
The
thesis
argues
that
government
agencies
engage
in
PPPs
in
order
to
bridge
existing
governance
gaps
and
that
PPPs
occur
when
the
preferences
of
the
development
agencies
and
private
companies
overlap.
Also,
the
thesis
argues
that
the
compliance
level
within
USAID’s
PPP-­‐initiative
is
less
formal
than
that
of
Sida’s.
KEY
WORDS:
PUBLIC-­‐PRIVATE
PARTNERSHIP,
DEVELOPMENT,
FOREIGN
AID,
SIDA,
USAID

2.
2
Table
of
Content
Table
of
Content
.......................................................................................................................
2
1.
Introduction
...................................................................................................................
3
1.1
Public
Private
Partnerships
.................................................................................................
3
1.2
Research
Question
..............................................................................................................
4
2.
Background
and
Previous
Literature
...............................................................................
6
2.1
USAID
and
the
GDA
.............................................................................................................
6
2.2
Sida
and
the
B4D
.................................................................................................................
6
2.3
PPP
as
a
Mechanism
for
Development
...............................................................................
6
2.4
Previous
Literature
..............................................................................................................
7
3.
Theoretical
Framework
..................................................................................................
9
3.1
Approaches
within
Rational
Choice
Theory
........................................................................
9
4.
Methodology
...............................................................................................................
13
4.1
Comparative
Cross-­‐National
Case
Study
...........................................................................
13
4.2
Case
Selection
...................................................................................................................
14
4.3.
Data
..................................................................................................................................
15
4.4
Operationalization
............................................................................................................
15
5.
Empirical
Analysis
........................................................................................................
17
5.1
Context
..............................................................................................................................
17
5.2
Analysis
of
Context
...........................................................................................................
21
5.3
Actors
................................................................................................................................
24
5.4
Analysis
of
Actors
..............................................................................................................
27
5.5
Governance
Structure
.......................................................................................................
28
5.6
Analysis
of
Governance
Structure
.....................................................................................
34
6.
Conclusion
...................................................................................................................
36
7.
References
...................................................................................................................
38

3.
3
1.
Introduction
During
the
past
decade,
the
development
community
has
increasingly
realized
that
development
aid
will
not
suffice
to
alleviate
poverty
and
reach
the
millennium
objectives.
Since
the
Monterey
Conference
on
Financing
for
Development
in
2002
several
international
development
conferences
have
pointed
at
the
role
of
the
private
sector
for
development.
Most
recently,
the
Busan
Conference
in
2011
and
Ban
Ki
Moon’s
High
Level
Panel
in
2013
clearly
stressed
the
importance
of
partnering
with
corporations
in
order
to
move
towards
sustainable
development.
For
example
in
the
final
document
from
the
OECD
conference
on
aid
effectiveness
in
Busan
leaders
commit
to:
…modernize,
deepen
and
broaden
our
co-­‐operation,
involving
state
and
non-­‐state
actors
that
wish
to
shape
an
agenda
that
has
until
recently
been
dominated
by
a
narrower
group
of
development
actors.
In
Busan,
we
forge
a
new
global
development
partnership
that
embraces
diversity
and
recognizes
the
distinct
roles
that
all
stakeholders
in
co-­‐operation
can
play
to
support
development
(Busan
Conference,
2011:2).
Thus,
development
agencies
have
increasingly
turned
their
interest
towards
the
private
sector
(Lindahl,
2005).
Recently,
many
policy
strategies
and
programs
have
been
crafted
in
a
way
that
encourages
cooperation
between
foreign
aid
actors
and
the
private
sector.
Two
examples
are
United
Nations’
(UN)
“Unleashing
Entrepreneurship
–
Making
Business
Work
for
the
Poor”
(2004)
and
the
World
Bank’s
“A
Better
Investment
Climate
for
Everybody”
(2005).
1.1
Public
Private
Partnerships
This
thesis
will
take
a
closer
look
at
how
and
why
two
specific
development
agencies,
the
United
States
Agency
for
International
Development
(USAID)
and
the
Swedish
International
Development
Cooperation
Agency
(Sida)
engage
in
public-­‐private

4.
4
partnerships
(PPPs).
PPPs
within
foreign
aid
are
seen
as
hybrid
governance
forms
where
the
political
powers
of
non-­‐state
actors
are
extended.
In
PPPs
non-­‐state
actors
are
directly
affecting
political
decisions
like
agenda
setting,
policy
formulation
and
implementation,
and
co-­‐govern
together
with
state
actors.
The
PPPs
can
range
from
loose
forms
of
cooperation
to
legally
binding
contracts
when
implemented
(Schäferhoff
et
al.
2009).
The
goal
is
to
find
how
and
why
the
United
States
(US)
and
Sweden’s
development
agencies
engage
in
PPPs.
Also,
the
thesis
will
discuss
similarities
and
differences
between
USAID
and
Sida’s
PPPs.
Both
agencies
have
recently
initiated
private
sector
development
policies.
Sida
initiated
its
policy
in
2003,
but
did
not
start
to
work
seriously
with
the
program
until
2012
(Sida,
2013),
whereas
USAID
initiated
its
policy
in
2001,
and
has
been
actively
engaged
in
PPPs
ever
since
(Dewar,
2008).
Both
initiatives
challenge
companies
to
develop
products,
services
and
business
models
that
can
contribute
to
poverty
reduction
and
reduce
climate
change
together
with
the
development
agencies.
1.2
Research
Question
The
research
problem
of
the
thesis
emanates
from
the
observation
that
even
though
PPPs
are
increasing
in
popularity,
little
information
exists
on
how
development
agencies
relate
to
the
phenomenon
of
PPPs.
According
to
Schäferhoff
et
al.
international
PPPs
form
a
research
field
that
is
still
in
an
early
stage
(2009:468).
Since
these
initiatives
are
relatively
new
they
have
not
yet
been
examined
in
depth,
which
is
one
reason
for
why
increased
scrutiny
is
warranted.
Also,
there
has
been
a
considerable
increase
in
the
use
of
PPPs
during
the
latest
decade
(Lick
and
Hamlin,
2012)
making
it
a
heated
topic
in
need
of
more
research.
Another
puzzle
examined
in
this
thesis
is
that
even
though
USAID
and
Sida
are
relatively
similar
aid
agencies,
both
being
western
aid
agencies
in
the
top
rank
of
foreign
aid
(Toal,
2013),
they
have
different
approaches
when
it
comes
to
working
with
the
private
sector.
To
guide
this
research
paper
and
to
solve
the
research
problem
the
following
question
is
used:

5.
5
• How
and
why
do
USAID
and
Sida
engage
in
PPPs?
Finding
the
answer
to
this
question
will
also
guide
the
paper
in
when
trying
to
explain
the
differences
between
USAID
and
Sida’s
PPPs.
In
order
to
answer
the
question
“how”
the
thesis
describes
the
overall
framework
and
rules
governing
USAID’s
and
Sida’s
PPPs
within
the
dimensions
of
“context”,
“actors”
and
“governance
structure”.
Also,
the
answers
to
the
question
“how”
and
“why”
PPPs
emerged
will
be
discussed
using
three
different
rational
choice
perspectives
taken
from
Schäferhoff
et
al.’s
article:
“Transnational
Public-­‐Private
Partnerships
in
International
Relations:
Making
Sense
of
Concepts,
Research
Frameworks,
and
Results”
(2009).
The
findings
of
the
thesis
will
be
of
importance
both
to
research
scholars,
professionals
in
the
development
sector
and
personnel
in
the
private
sector.
There
are
three
main
arguments
of
the
thesis.
First,
USAID
started
engaging
in
PPPs
due
to
the
realization
of
the
USAID
of
there
being
a
governance
gap
in
developing
co-­‐
operation
between
its
ability
to
promote
growth
and
the
ability
of
the
private
sector
to
do
the
same.
In
Sida’s
case
PPPs
emerged
because
of
outer
pressure.
Second,
both
USAID
and
Sida’s
PPPs
were
initiated
when
overlapping
preferences
were
at
hand
between
the
development
agencies
and
the
private
sector.
Third,
the
compliance
level
of
the
PPPs
in
USAID
is
lower
than
in
the
PPPs
of
Sida.
This
study
is
both
politically
and
socially
relevant.
It
contributes
to
political
science
by
investigating
how
government
institutions
can
work
together
with
private
companies.
This
study
is
socially
relevant
since
it
tries
to
increase
knowledge
in
how
to
manage
poverty
reduction.
Also,
cooperation
is
the
key
in
international
relations
and
is
important
for
the
reduction
of
poverty.
Furthermore,
this
topic
is
relevant
due
to
the
increasing
global
influence
of
both
small
and
multinational
corporations
in
general
and
due
to
development
agencies
attempt
to
use
these
corporations
to
obtain
development
objectives
more
specifically.
The
thesis
is
structured
as
follows;
next
section
provides
background
and
a
discussion
of
previous
literature
in
order
to
contribute
to
a
better
understanding
of
the
topic,
the
following
section
focuses
on
the
theoretical
approach
applied
in
the
thesis.
Thereafter,
a

6.
6
thorough
explanation
of
the
method
used
is
presented,
followed
by
an
introduction
of
the
data
used.
The
next
section
consists
of
the
analysis
of
the
data,
followed
by
a
discussion
and
conclusion.
The
last
section
includes
a
reference
list.
2.
Background
and
Previous
Literature
2.1
USAID
and
the
GDA
The
USAID’s
model
for
PPPs
is
called
the
Global
Development
Alliances
(GDA).
It
was
established
in
2001
by
former
Secretary
of
State,
Colin
Powell
in
order
to
underpin
a
“fundamental
reorientation”
of
how
the
US’s
development
programmes
were
shaped
and
how
they
related
to
development
partners
(USAID,
2013).
The
GDA
is
supposed
to
help
improve
the
social
and
economic
state
of
affairs
in
poor
countries
as
well
as
to
expand
USAID’s
development
impact.
Until
today
the
program
has
formed
over
1700
alliances
together
with
the
private
sector
(USAID,
2013).
2.2
Sida
and
the
B4D
In
the
case
of
Sweden,
the
government
recently
realized
that
the
private
sector
had
to
be
better
included
in
the
development
agenda.
In
2012
Sida
adopted
a
Business
For
Development
(B4D)
program
encouraging
further
partnership
with
the
private
sector.
Before
the
B4D-­‐program
little
work
was
done
by
Sida
to
include
the
private
sector
in
its
work
although
the
agency
had
some
collaborations
together
with
private
parties.
Today
this
has
changed
and
business
is
one
major
actor
within
innovation,
investments
and
growth
according
to
Sida.
Using
these
drivers,
Sida
now
wants
to
reduce
poverty
through
developing
the
collaboration
with
Swedish
companies
(Sida,
2013).
2.3
PPP
as
a
Mechanism
for
Development

7.
7
Researchers,
governments,
businesses,
and
the
press
have
often
emphasized
PPPs
as
a
measure,
which
holds
the
potential
of
increasing
sustainable
development
(Flinders,
2005;
Hertzberg
and
Wright,
2005;
Mullin,
2002).
The
following
section
thus
considers
PPPs
from
a
foreign
aid
and
theoretical
perspective.
The
definition
of
a
PPP
used
in
this
thesis
is
taken
from
the
OECD,
according
to
which
a
PPP
is:
An
agreement
between
the
government
and
one
or
more
private
partners
to
which
the
private
partners
deliver
the
service
in
such
a
manner
that
the
service
delivery
objectives
of
the
government
are
aligned
with
the
profit
objectives
of
the
private
partners
and
where
the
effectiveness
of
the
alignment
depends
on
a
sufficient
transfer
of
risk
to
the
private
partners
(2008:17).
PPPs
develop
through
the
recognition
that
many
ongoing
problems
cannot
be
solved
using
the
old
mechanisms
of
government.
According
to
the
OECD,
it
is
likely
that
the
use
of
PPPs
will
keep
on
growing
(2013).
PPPs
can
include
either
legally
formalized
forms
or
less
formalized
forms
of
cooperation
between
public
and
private
partners.
PPPs
might
appear
when
partners
identify
that
they
will
increase
net
benefits
and
decrease
governance
costs
when
reaching
a
partnership
(Sagalyn,
2007;
Mullin,
2002;
Newman
and
Verpraet,
1999).
Furthermore,
PPPs
are
considered
an
adequate
instrument
when
confronting
public
development
problems
where
unilateral
approaches
have
failed
or
provide
unsatisfactory
results
(Stadtler,
2012).
In
order
to
render
the
collaboration
successful,
partners
have
to
decide
on
shared
goals,
rules,
standard
operating
procedures,
and
the
division
of
tasks,
risks,
and
responsibilities
(Bryson
et
al.
2006).
2.4
Previous
Literature
A
range
of
previous
literature
has
dealt
with
the
phenomenon
of
PPPs.
This
section
focus
on
what
has
been
written
on
PPPs
within
the
field
of
foreign
aid.
One
assessment
study
discusses
the
conditions
under
which
partnerships
within
development
activities
work
or
do
not
work
(Houghton,
2010).
Other
economic
articles
discuss
the
importance
of

8.
8
PPPs
in
boosting
economic
development
(Conrad,
2012)
or
how
partnerships
between
the
private
and
the
public
sector
should
be
managed
(Stadtler,
2012).
These
articles
show
that
little
research
has
been
done
about
why
PPPs
emerge
in
development
work.
This
thesis
seeks
to
diminish
this
research
gap
trying
to
gain
a
deeper
understanding
of
PPPs
within
foreign
aid.
Even
though
not
much
research
has
been
conducted
on
PPPs
within
foreign
aid
more
research
has
been
done
on
PPPs
within
other
fields.
For
example,
Andonova
studied
PPPs
within
the
environmental
field.
Similar
to
this
thesis,
Andonova
seeks
the
answer
to
why
international
organization
partner
with
non-­‐state
actors.
Andonova’s
findings
show
that
international
organizations
engage
in
PPPs
because
of
external
pressure
and
agency
autonomy
(Andonova,
2010).
Including
the
research
done
by
Andonova,
Schäferhoff
et
al.
have
summarized
different
studies
done
on
transnational
PPPs
exploring
why
PPPs
emerge,
under
what
conditions
they
are
effective,
and
under
what
conditions
they
are
legitimate
(2009).
It
is
in
Schäferhoff
et
al.’s
article
the
foundation
for
this
thesis’s
theoretical
perspective
is
found.
Throughout
this
thesis
some
weaknesses
of
current
research
mentioned
in
Schäferhoff
et
al.
will
be
addressed.
As
stated
by
Schäferhoff
et
al.
“more
empirical
research
is
necessary
to
further
specify
the
conditions
under
which
PPPs
emerge”
(2009:469).
Also,
Whelan
states
”future
research
needs
to
acknowledge
that
states
continue
to
be
actors
of
considerable
importance
with
regard
to
the
creation
and
maintenance
of
Political
Corporate
Social
Responsibility
(CSR)
activities
and
initiatives
at
the
national
and
global
levels”
(2012:728).
Lastly,
Witte
and
Deng
stress
the
importance
of
giving
attention
to
the
questions
of
why
partnerships
emerge
(2005).
Since
the
previous
literature
is
limited
this
thesis
will
fill
a
research
gap
by
contributing
to
the
literature,
within
the
field
of
development,
on
the
use
of
PPPs
in
development
work.
This
study
will
also
contribute
to
knowledge
of
how
USAID
and
Sida
differ
in
their
use
of
PPPs.
The
research
aims
at
contributing
to
the
field
of
political
science,
development
studies
and
rational
choice
theory.

9.
9
3.
Theoretical
Framework
3.1
Approaches
within
Rational
Choice
Theory
As
indicated
by
Schäferhoff
et
al.
international
relations
theories
can
be
successfully
applied
to
PPPs
when
conducting
a
theory-­‐based
comparative
research
(2009:452).
Taken
from
Schäferhoff
et
al.
this
thesis
uses
three
already
established
approaches
within
rational
choice
institutionalism
theory
that
seek
to
explain
why
PPPs
emerge
in
an
international
context.
These
three
approaches
are
useful
when
exploring
why
PPPs
have
emerged
in
USAID
and
Sida.
Previously
neo-­‐Gramscian
and
constructivist
theories
have
been
used
to
account
for
the
emergence
of
PPPs
(Schäferhoff
et
al.
2009)
however;
empirical
research
supporting
their
arguments
is
presently
limited
making
it
difficult
to
apply
them
to
this
thesis.
On
the
contrary
the
majority
of
work
refers
to
rational
approaches,
which
claims
to
“provide
a
grand
theoretical
framework
for
designing
human
institutions”
(Schofield,
1996:189).
Rational
choice
institutionalism
theory
is
also
applied
in
this
thesis.
Rational
choice
institutionalism
is
a
strand
deriving
from
new
institutionalism
(Peters,
2005).
According
to
Peters,
an
institution
is
a
structural
feature
of
the
society
and/or
polity.
There
are
both
informal
structures,
like
interacting
organizations
or
shared
norms,
and
formal
structures,
like
legislature
or
a
legal
framework
(ibid).
According
to
Peters:
An
institution
transcends
individuals
to
involve
groups
of
individuals
in
some
sort
of
patterned
interactions
that
are
predictable,
based
upon
specific
relationships
among
actors
(2005:18).
Furthermore,
to
be
an
institution
the
patterned
actions
also
needs
to
have
some
stability
over
time,
constrain
the
behavior
of
its
members
and
include
some
shared
values
and
meaning
among
the
members
of
the
institution
(Peters,
2005).
The
rational
choice
approach
in
new
institutionalism
applies
both
to
individual
behavior
and
collective
decision-­‐making.
The
rational
choice
approach
assumes
that
institutions

10.
10
are
means
to
aggregate
the
preferences
of
the
persons
who
embrace
them.
The
behavior
of
the
people
inside
the
institutions
is
directed
by
rules
and
incentives
instead
of
norms
and
values
(Peters,
2005).
Furthermore,
rational
choice
institutionalism
assumes
that
actors
are
egoistic
wanting
to
pursue
their
own
interests
(Abott,
2008).
Within
the
institutions
a
rational
action
involves
utility
maximization
meaning
that
actors
choose
the
option
that
best
serve
their
objectives
(Green
and
Shapiro,
1994).
Also,
actors
maximize
the
expected
value
of
their
own
payoff
(ibid).
This
could
be
seen
as
contradictory
to
why
actors
engage
in
foreign
aid
but
this
is
not
the
case.
The
phenomena
could
be
explained
from
a
rational
choice
institutional
perspective
as
including
a
degree
of
altruism
in
the
actor’s
preference
function
or
by
seeing
the
actor
wanting
to
elevate
a
normative
goal
(ibid).
In
this
thesis
the
PPPs
within
the
development
agencies
will
be
seen
as
institutions
and
used
as
the
focus
of
the
analysis.
Deriving
from
rational
choice
institutionalism
theory
this
thesis
focus
on
the
most
important
arguments
mentioned
in
Schäferhoff
et
al.
The
arguments
will
guide
this
thesis
in
answering
why
PPPs
emerge.
Following
a
presentation
of
the
arguments
and
their
theoretical
background
is
given.
3.1.1
Solving
Governance
Gaps
The
first
argument
within
rational
choice
institutionalism
theory
in
Schäferhoff
et
al.’s
article
is:
“PPPs
are
purposefully
created
by
rational
actors
who
are
interested
in
solving
complex
trans
boundary
problems”
(Schäferhoff
et
al.
2009:456).
This
is
a
functionalist
explanation
that
considers
governments
and
multinational
corporations
that
previously
have
been
incapable
of
addressing
global
challenges
developing
from
globalization
in
its
most
efficient
way.
In
trying
to
battle
these
challenges
they
initiate
PPPs
that
successfully
fill
governance
gaps
through
effective
governance
solutions
(Reinicke
and
Deng,
2000;
Reinicke
and
Witte,
2000;
Nelson,
2002).
Governance
gaps
could
be
solved
through
the
use
of
PPPs
since
they
can
reduce
transaction
costs,
help
pooling
resources,
and
help
mediate
disputes
(Abott,
2008).
In
this
argument
the
governance
gaps
could
be
seen
as
market
failures
where
transactions
are
expensive
to
carry
out.
Examples
of
problems
causing
market
failure

11.
11
could
for
example
be
risks
in
democratic
institutions,
political
liberalization
and
technological
change
(Reinicke
and
Deng,
2000).
In
trying
to
solve
these
governance
gaps
it
is
the
rational
choice
of
the
development
agencies
to
try
to
reduce
the
failure
within
the
market;
hence,
starting
to
work
with
private
companies
trying
to
solve
current
market
problems.
Moreover,
PPPs
could
act
as
bridges
between
producers
and
markets
making
markets
where
they
are
deficient
and
extending
markets
where
they
are
not
living
up
to
expectations
(Reinicke
and
Deng,
2000).
When
solving
the
governance
gap
the
reward
is
a
healthy
society
where
social,
political
and
economical
factors
are
improved,
hence
the
rational
choice
for
USAID
and
Sida
would
be
to
enhance
the
work
in
solving
governance
gaps.
Although
this
is
an
argument
appropriate
for
this
thesis
it
should
be
used
with
caution
since
other
authors
have
contested
it.
For
example
some
studies
have
found
that
PPPs
were
not
formed
to
help
close
governance
gaps
but
to
increase
the
interests
of
actors
(Andonova
and
Levy,
2003;
Hoering,
2003).
Other
criticism
towards
this
argument
could
for
example
be
that
some
development
agencies
might
benefit
from
an
inefficient
status
quo,
in
which
the
agency
only
search
for
profit
maximization.
This
is
not
the
case
of
USAID
and
Sida
since
they
are
democratic
western
aid
agencies
stating
that
their
objective
is
to
help
reduce
poverty.
Since
diminishing
poverty
is
the
agencies’
ultimate
goal
neither
of
the
agencies
would
benefit
from
an
inefficient
status
quo,
in
which
no
help
would
be
given.
3.1.2
Overlapping
Preferences
The
second
important
argument
is
“PPPs
will
be
formed
when
the
interests
of
actors
overlap,
and
each
of
them
can
expect
benefits”
(Schäferhoff
et
al.
2009:456).
This
approach
predicts
that
rational
actors
will
form
partnerships
to
promote
their
interests
when
their
preferences
coincide.
According
to
this
approach
PPPs
are
not
necessarily
established
to
diminish
governance
gaps,
but
that
PPPs
are
institutions
where
rational
actors
try
to
gain
unobtainable
resources
they
would
not
otherwise
have
(Tesner,
2002).
Furthermore,
development
agencies
cooperate
with
the
private
sector
in
the
delivery
of
services,
which
encompass
the
public
interests.
Private
interests
could
be
based
in
economic
or
political
opportunism.
According
to
rational
choice
institutionalism
USAID

12.
12
and
Sida
could
be
seen
as
self-­‐interested
maximizers
who
uses
strategic
calculus
and
institutions
as
the
outcome
of
rational
thinking
(Peters,
2005).
It
would
be
the
rational
choice
for
USAID
and
Sida
to
engage
in
cooperation
with
the
private
sector
since
the
gains
and
preferences
are
enhanced.
For
example,
USAID
and
Sida
might
be
increasingly
confronted
with
difficulties
related
to
highly
technical
issues
in
which
they
lack
knowledge,
while
business
could
help
USAID
and
Sida
develop
these
skills.
One
criticism
towards
the
second
argument
could
be
that
even
though
the
public
and
private
sector
might
have
overlapping
preferences
there
is
a
chance
of
that
the
prisoner’s
dilemma
would
occur,
in
which
one
of
the
partners
might
not
benefit
from
a
collaboration.
Even
though
there
is
a
small
chance
that
the
prisoner’s
dilemma
would
occur
USAID
and
Sida
have
made
the
rational
action
in
establishing
guiding
rules
and
principles
in
how
a
partnership
should
be
managed.
Because
of
the
established
guidelines
the
prisoner’s
dilemma
is
avoided
and
both
partners
preferences
will
be
enhanced.
The
connection
to
the
prisoner’s
dilemma
and
compliance
level
is
further
developed
in
the
following
argument.
3.1.3
Compliance
Level
The
last
argument
states
“PPPs
are
based
on
diverse
institutional
designs,
ranging
from
loose
cooperation
to
highly
formalized
initiatives
that
rely
on
precise
rules,
strong
obligations,
and
compliance
mechanisms
to
further
the
goal
attained
to
partnerships”
(Schäferhoff
et
al.
2009:457).
This
argument
is
brought
up
by
Schäferhoff
et
al.
to
explain
why
diverging
institutional
forms
of
PPPs
develop,
which
cannot
be
explained
by
the
previous
arguments
(Reinicke
and
Witte,
2000).
This
argument
implies
that
there
are
different
levels
for
collaboration.
Some
form
a
more
severe
form
of
shared
action
problems,
since
actors
have
incentives
for
desertion.
Furthermore,
agencies
that
deal
with
problems
deriving
from
collaboration
are
predicted
to
be
relatively
formalized
(Hasenclever
et
al.
1997).
This
argument
is
connected
to
rational
choice
institutionalism
since
the
more
problems
that
might
occur
within
collaboration
the
more
rules
need
to
be
established
to
avoid
these
problems.
Here,
the
problem
of
prisoner’s
dilemma
is
diminished.
The
more
formalized
institutions
the
easier
it
will
be
to
avoid
the
prisoner’s
dilemma
in
partner
collaborations.
These
arguments
are
situation-­‐structural
in
nature,

13.
13
which
stress
that
different
institutional
solutions
occur
depending
on
what
problems
the
cooperation
will
face
(ibid).
The
rational
choice
institutionalism
theory
is
used
for
this
thesis
since
it
helps
provide
interesting
insights
into
how
institutions
and
the
behavior
of
individuals
within
those
structures
behave.
To
understand
why
the
institutions
of
PPPs
have
emerged
in
USAID
and
Sida
the
three
rational
choice
approaches
will
help
understand
the
phenomena.
Following,
the
methodology
section
is
presented
explaining
how
the
answer
to
the
research
question
is
established.
4.
Methodology
4.1
Comparative
Cross-­‐National
Case
Study
This
thesis
is
a
comparative,
cross-­‐national
case
study.
The
data
will
be
studied
in
a
qualitative
manner
since
it
focuses
on
the
broader
context
(Bryman,
2008).
The
comparative
design
was
used
since
it
“implies
that
we
can
understand
social
phenomena
better
when
they
are
compared
in
relation
to
two
or
more
meaningfully
contrasting
cases”
(Bryman,
2008:58).
The
cases
are
USAID
and
Sida’s
initiatives
in
partnering
with
the
private
sector
called
the
GDA
and
B4D,
which
are
the
units
of
analysis.
Moreover,
the
case
study
approach
was
used
since
it
is
a
good
starting
point,
identifying
important
features
of
possible
relationships.
It
also
provides
an
opportunity
to
conduct
an
intensive
examination
of
the
case
(Bryman,
2008).
The
thesis
concentrates
on
the
overall
framework
of
rules
and
regulations
that
USAID
and
Sida
apply
to
their
respective
PPPs.
Only
the
management
of
partnerships
with
private
companies
will
be
examined.
The
GDA
and
B4D
initiatives
will
be
compared
with
regard
to
three
key
dimensions
that
are
relevant
to
the
analysis
of
development
cooperation;
“context”,
“actors”
and
“governance
structure”
The
dimensions
are
used
by
the
European
Commission
when
assessing
sectorial
development
programs
and
constitute
the
most
recent
and
up
to
date
tool
available
(EC,
2008).
This
framework
has

14.
14
previously
been
used
to
evaluate
work
of
the
EU’s
development
agency,
EuropeAid.
It
has
neither
been
used
on
USAID
nor
Sida
making
it
unbiased
towards
these
agencies.
This
type
of
analysis
is
useful
in
trying
to
explain
why
reforms,
such
as
the
PPP
initiatives,
have
been
implemented,
which
also
makes
it
connected
to
the
theoretical
arguments
previously
presented
(DFID,
2009).
First,
the
“context”
framework
will
mainly
help
to
explain
if
the
agencies
have
been
trying
to
solve
any
type
of
governance
gap.
Second,
the
“actors”
framework
is
useful
when
trying
to
elaborate
if
there
are
any
overlapping
preferences.
Third,
the
“governance
structure”
framework
will
mainly
help
to
indicate
the
compliance
level
within
the
PPPs.
The
relevance
of
the
framework
is
not
limited
to
EU
development
cooperation.
There
is
nothing
in
this
framework
that
is
clearly
linked
to
EU
treaties,
institutions
or
policies.
On
the
contrary
the
dimensions
can
be
generalized
and
shed
light
on
development
cooperation
outside
the
EU
as
well.
No
other
framework
that
is
better
suited
to
the
purpose
of
this
essay
has
been
found.
By
comparing
how
Sida
and
USAID
conduct
PPPs
along
the
three
dimensions,
important
insights
with
regard
to
private
sector
engagement
in
development
cooperation
could
be
gained.
The
framework
suits
the
purpose
of
this
thesis,
with
some
adjustments,
since
it
points
at
concrete
aspects
that
have
to
be
studied.
Thereby
it
facilitates
the
comparisons
by
making
the
analysis
more
concrete,
manageable
and
understandable.
The
following
section
contains
a
brief
introduction
to
the
case
selection
and
data
used.
Last,
the
operationalization
is
presented
to
facilitate
the
understanding
of
the
method
used.
4.2
Case
Selection
The
cases
studied
in
this
thesis,
the
GDA
and
the
B4D-­‐program,
were
chosen
with
the
purposive
sample
method
since
the
method
entails
an
attempt
to
gain
a
good
correspondence
between
the
research
question
and
sampling
(Bryman,
2008).
The
goal
of
the
thesis
is
to
find
the
difference
in
USAID
and
Sida’s
PPP
programs,
the
GDA
and
the
B4D,
and
therefore
the
purposive
sample
method
was
used.
The
purposive
sample
method
was
used
due
to
the
study’s
aim
of
finding
the
similarities
and
differences
in

15.
15
how
and
why
USAID
and
Sida
work
with
PPPs
(Bryman,
2008).
USAID
and
Sida
were
chosen
because,
both
USAID
and
Sida
are
western
aid
agencies
in
the
top
rank.
Also,
both
agencies
had
recently
initiated
PPP-­‐programs.
4.3.
Data
The
data
consists
of
the
overall
framework
rules
and
principles
for
the
PPP
programs
from
USAID
and
Sida.
The
primary
sources
used
are
official
documents
published
on
USAID
and
Sida’s
respective
webpages,
both
in
terms
of
official
documents
describing
the
programmes
and
reports
produced
by
hired
consultants.
The
documents
relates
to
the
basic
rules
and
regulations
for
the
PPP
program
of
the
respective
agency.
The
time
frame
looked
at
is
from
2000-­‐2013.
First
of
all,
the
thesis
analyzes
the
management
within
the
GDA
and
B4D.
When
specific
PPPs
are
used
they
include
private
companies
and
not,
for
example,
non-­‐governmental
organizations.
Therefore,
data
was
taken
from
the
section
were
USAID
and
Sida
described
their
collaboration
with
the
private
sector,
mainly
the
web
pages
for
the
GDA-­‐initiative
and
the
B4D-­‐initiative.
These
governmental
agencies’
web
pages
are
all
seen
as
reliable
sources.
When
sufficient
information
were
not
found
on
the
agencies’
official
web
pages
the
OECD
DAC
Peer
Reviews
of
USAID
and
Sida
were
used
as
a
complementary
source.
Since
a
majority
of
the
data
is
taken
from
governmental
sources
the
possibility
of
bias
in
the
documents
exists.
Therefore,
credibility
of
the
sources
is
to
some
extent
questioned.
On
the
other
hand,
biases
could
enhance
the
findings
of
this
study
shedding
more
light
on
the
agencies’
differences.
Therefore,
bias
is
not
seen
as
a
major
problem
within
the
thesis.
One
factor
that
is
seen
as
a
problem
is
the
issue
of
representation.
Only
a
limited
sample
of
official
documents
have
been
studied
in
this
thesis
making
it
difficult
to
determine
whether
the
result
would
have
been
different
if
time
would
have
permitted
an
examination
of
all
official
USAID
and
Sida
documents.
Due
to
this
restriction,
further
research
is
needed
on
examining
how
the
agencies
are
conducting
their
PPP-­‐programs.
4.4
Operationalization

16.
16
The
framework
focuses
on
the
three
specific
dimensions:
“context”,
“actors”,
and
“governance
structure”.
The
dimensions
are
studied
within
a
specific
sector.
In
this
thesis
the
sector
is
defined
as
the
PPP-­‐initiatives
the
GDA,
and
the
B4D.
Each
dimension
brings
up
a
set
of
questions,
which
will
be
answered
later
in
the
thesis.
Also,
each
dimensions
help
explain
why
USAID
and
Sida
became
engaged
in
PPPs.
In
the
following
diagram
the
link
between
dimensions,
theoretical
arguments
and
questions
asked
are
shown.
Dimension
Theoretical
argument
Questions
asked
Context
Solving
governance
gap
Overlapping
preferences
What
is
the
history
of
the
sector?
What
political
attention
does
the
sector
get?
Actors
Overlapping
preferences
Solving
governance
gap
Compliance
level
Who
are
the
stakeholders
in
the
sector?
What
are
their
respective
roles
and
responsibilities,
their
interests
and
incentives
for
maintaining
the
status
quo,
or
for
change?
Governance
structure
Compliance
level
Solving
governance
gaps
What
are
the
sector’s
core
principles?
How
does
the
governance
structure
look
within
the
sector?
Finding
the
answers
to
these
questions
will
give
a
holistic
view
of
how
the
GDA
and
the
B4D-­‐program
work.
Also,
three
steps
are
used
when
trying
to
find
the
answers
to
the
previous
questions.
The
first
step
analyzes
the
context.
The
second
step
maps
the
actors.

17.
17
The
third
step
assesses
the
governance
structure.
After
assessing
these
three
steps
a
combination
of
the
relationships
between
them
will
help
to
move
beyond
the
static
picture
and
the
answers
will
make
it
possible
to
assess
why
USAID
and
Sida
started
working
with
PPPs.
The
framework
helps
showing
clearer
results
on
how
the
two
PPP-­‐
initiatives
studied
differentiates
at
different
levels.
The
reliability
of
this
method
is
relatively
high.
The
results
of
the
study
will
be
consistent
if
the
same
cases
are
used
at
the
moment.
On
the
other
hand,
the
results
could
be
different
if
the
study
would
be
conducted
some
years
after
this
study
since
USAID
and
Sida’s
working
methods
usually
changes
over
time.
Also,
the
time
frame
only
encompasses
the
years
of
2000-­‐2013.
If
data
before
2000
would
have
been
collected
the
findings
might
have
been
different.
Another
problem
with
the
method
could
be
the
inappropriateness
of
the
results
to
be
generalized
to
other
development
agencies.
That
findings
cannot
be
generalized
affects
external
validity
(Bryman,
2008),
however,
this
study
does
not
aim
to
provide
generable
answers,
it
aims
at
finding
important
features
that
later
can
be
additionally
researched
with
the
aim
of
finding
generable
answerers.
5.
Empirical
Analysis
This
thesis
proceeds
as
follows.
First
the
GDA
and
the
B4D-­‐program
will
be
studied
through
the
dimension
of
“context”.
Within
the
dimension
of
“context”
there
are
two
sub-­‐aspects;
the
history
of
the
PPP-­‐programs
and
how
much
political
attention
the
PPP-­‐
programs
get.
Second,
the
PPP-­‐programs
will
be
studied
through
the
dimension
of
“actors”
mapping
their
roles
and
responsibilities.
Last
the
dimension
of
“governance
structure”
within
the
PPP-­‐programs
is
studied.
After
each
dimension
an
analysis
is
presented
mapping
the
differences
between
the
USAID
and
Sida’s
PPP-­‐programs
as
well
as
addressing
the
three
theoretical
arguments
taken
from
Schäferhoff
et
al.
5.1
Context

18.
18
5.1.1
The
History
of
the
GDA
from
2000
Until
Today
In
the
1970s
70
percent
of
the
foreign
aid
from
the
US
to
the
developing
world
derived
from
USAID
and
30
percent
were
from
the
private
sector.
In
the
beginning
of
year
2000
there
had
been
a
significant
shift
making
the
majority
of
resources
from
the
US
to
the
developing
world
coming
from
the
private
sector.
Recognizing
this
shift,
USAID
initiated
the
Global
Development
Alliance
(GDA)
in
2001
to
encourage
PPPs
with
companies,
NGOs,
foundations,
and
others
(Clapp-­‐Wincek,
2004).
Furthermore,
the
GDA
was
initiated
to
link
the
rapidly
expanding
stream
of
private
funding
to
the
US
(ibid).
The
GDA
was
developed
due
to
the
recognition
of
the
importance
of
the
private
sector,
which
in
2000,
accounted
for
more
than
80
percent
of
the
overall
(beyond
Official
Development
Assistance)
financing
from
the
US
to
the
developing
world.
USAID’s
surge
for
global
actors
derived
from
liberalized
trade
policies
and
an
increase
in
information
technology
(Lawson,
2011).
This
alliance
would
broaden
USAID’s
reach
and
create
new
ways
for
USAID
to
implement
foreign
assistance.
The
Secretary
of
State,
Colin
Powell,
stated
that
the
GDA
would
be
“a
new
strategic
orientation
for
USAID”
and
a
new
Business
Model
for
the
21st
century
(USAID,
2013).
Before
the
GDA
USAID
had
a
long
history
of
working
in
partnerships
with
NGOs,
foundations,
and
international
organizations,
but
private
sector
companies
were
previously
under-­‐valued.
In
the
beginning
of
the
PPPs
focus
was
more
on
charity
and
private
philanthropy.
Today
focus
is
more
on
core
business
interests
of
private
firms
and
the
firms’
sustainability
work
(USAID,
2013).
Today,
the
GDA
is
seen
as
creating
more
effective
funding
in
development
cooperation
since
it
“creates
a
bigger
pie”
for
development
assistance
(USAID,
2013:2).
Because
of
budget
constraints
the
112th
Congress
had
means
of
withstanding
the
development
agenda
while
lessening
development
aid
levels
through
PPPs
(Lawson,
2011).
5.1.2
The
History
of
the
B4D-­‐program
from
2000
Until
Today

19.
19
Billing
et
al.
states
that
the
role
of
the
business
sector
in
Swedish
development
collaboration
has
until
recently
been
relatively
minor
(2012:17).
During
2000-­‐2004
the
Sida
support
for
private
sector
development
was
evaluated.
The
findings
of
the
evaluation
were
that
the
support
for
private
sector
development
had
been
significantly
larger
than
officially
recorded.
This
was
mainly
due
to
interventions
made
in
other
sectors
(e.g.
health
or
agriculture)
that
were
not
recognized
as
PPPs.
The
report
also
found
that
a
lot
of
attention
was
given
to
macro-­‐economic
and
governance
aspects
in
Sida’s
work
while
the
main
factor,
the
development
of
a
business
sector,
were
largely
absent.
The
evaluation
confirmed
that
individual
contribution
to
the
private
sector
and
support
to
business
development
was
not
addressed
comprehensibly
by
Sida
(Sida,
2005).
It
was
not
until
the
end
of
2000
that
Sida,
at
the
same
time
as
the
Paris
Declaration
was
established
promoting
more
effective
foreign
aid,
did
start
working
with
the
private
sector
seriously
(Resare,
2011).
In
2004
Sida
adopted
a
new
Private
Sector
Development
Policy
based
on
the
report
called
“Making
markets
work
for
the
poor”.
At
this
stage
Sida
gave
greater
recognition
to
the
importance
of
macro-­‐economic
stability
and
market
effectiveness.
On
the
other
hand,
Sida
policy
has
to
depart
from
the
perspective
of
the
poor.
The
role
of
the
donors
was
not
widely
mentioned.
Support
for
individual
firms
could
be
given
where
clear
positive
externalities
were
possible
(Billing
et
al.
2012).
In
recent
years
the
“Making
markets
work
for
the
poor”
has
been
evaluated
and
refined,
focusing
more
on
private
companies.
In
2012
the
B4D-­‐inititative
was
established
that
could
be
seen
as
a
more
serious
attempt
in
starting
to
work
with
the
private
sector.
5.1.3
Political
Attention
Given
to
the
GDA
To
begin
with,
USAID’s
annual
letter
written
by
President
Obama
and
the
Administrator
of
the
Agency
for
International
Development,
Rajiv
Shah,
in
2013
is
studied.
In
the
annual
letter
the
USAID
PPP-­‐initiative
is
mentioned
ten
times
in
the
document,
which
contains
28
pages.
The
PPP
initiative
is
used
to
show
the
positive
results
that
USAID
has
achieved
through
the
program.
Also,
the
private
sector
is
mentioned
as
an
important
partner
for
USAID
and
as
an
engine
of
growth
and
development.
Furthermore,
it
is

20.
20
stated
that
private
sector
partners
have
been
encouraged
to
put
more
energy
into
designing
more
solutions
to
the
remote
rural
communities
(USAID,
2013a).
Also,
the
Obama
administration
stated
in
the
2010
Quadrennial
Diplomacy
and
Development
Review
that:
…private
sector
partners
can
add
value
to
our
missions
through
their
resources,
their
capacity
to
establish
presence
in
places
we
cannot,
through
the
technologies,
networks,
and
contacts
they
can
tap,
and
through
their
specialized
expertise
or
knowledge
(USAID,
2010:68).
Additionally,
at
the
G8
Summit
in
Maryland
2012
President
Obama
initiated
a
public-­‐
private
partnership
program
called
“New
Alliances
for
Food,
Security
and
Nutrition”
indicating
its
importance
for
the
president.
The
alliance
include
the
G8
nations,
African
partner
countries
and
private
sector
partners,
which
together
aim
to
help
lifting
50
million
people
in
Sub-­‐Saharan
Africa
out
of
poverty
within
the
next
10
years
(Feed
the
Future,
2012).
5.1.4
Political
Attention
Given
to
B4D
Every
year
the
government
releases
its
annual
letter
of
appropriation
to
Sida.
The
letter
is
a
major
guideline
of
how
Sida
should
govern
its
work
the
following
year,
setting
out
the
objectives
Sida
should
achieve.
Also,
the
budget
allocation
is
presented
(UD,
2012).
The
B4D
program
is
mentioned
in
the
first
page
of
the
letter
from
2013.
In
the
first
page
there
is
a
paragraph
about
which
priorities
Sida
should
give
extra
attention
to
during
the
following
year.
There
are
six
specific
projects
that
are
highlighted.
One
of
these
projects
is
the
partnership
with
the
private
sector
through
the
B4D
program
(UD,
2012).
This
proves
that
the
government
clearly
wants
to
invest
more
time
and
money
into
the
B4D
program
during
2013.
Furthermore,
the
importance
of
the
private
sector
is
also
presented
in
the
annual
letter
of
appropriation
from
2012
as
an
important
priority,
although
the
B4D
program
is
not
mentioned.
Also,
when
looking
at
all
the
letters
of
appropriation
after
2007
the
importance
of
the
private
sector
is
only
highlighted
in
the
latest
two
letters
(Sida,
2013).
Thus,
there
seem
to
have
been
a
clear
and
recent
shift
towards
giving
more
political
attention
to
Sida’s
co-­‐operation
with
the
private
sector.

21.
21
Another
important
document,
“Sweden’s
Policy
for
Global
Development”,
also
written
by
the
Swedish
Government,
highlights
the
importance
of
the
private
sector.
For
example
it
states:
In
general,
Swedish
enterprises
have
a
good
reputation
for
social
and
environmental
responsibility.
Sweden
will
help
promote
better
knowledge
of
and
compliance
with
universal
codes
of
conduct
and
other
instruments,
such
as
the
UN
Global
Compact
and
OECD
guidelines
for
multinational
enterprises,
through
regular
dialogue
with
representatives
of
the
governments,
business
sectors
and
civil
societies
of
our
partner
countries
(2007:25).
In
the
policy
guidelines
it
is
clearly
stated
that
Sida
should
use
CSR
as
a
natural
part
of
its
engagement
with
the
private
sector
in
partner
countries.
Also,
the
paragraph
ends
with
stating
that
Sida
will
work
closely
with
Swedish
enterprises
to
increase
bilateral
cooperation
on
social
and
environmental
responsibility
(Swedish
Government,
2007).
Furthermore,
in
the
policy
guidelines
one
main
goal
is
to
increase
the
investment
climate
in
developing
countries
that
benefits
both
local
business
development
and
Swedish
business
interests.
To
reach
this
goal
the
government
intends
to,
for
example:
encourage
CSR
by
promoting
the
principles
embodied
in
the
UN
Global
Compact
and
the
OECD
guidelines
for
multinational
enterprises,
promote
a
closer
partnership
towards
Swedish
corporations
to
make
full
use
of
the
initiative,
experience,
and
expertise,
and
improve
the
conditions
for
the
collaboration
between
Sida
and
the
Swedish
business
sector,
without
however,
forgetting
the
Swedish
principles
of
non-­‐tied
aid
(Swedish
Government,
2007).
5.2
Analysis
of
Context
5.2.1
Governance
Gap

22.
22
The
history
of
the
GDA
and
B4D
from
the
year
of
2000
and
onwards
point
at
important
differences.
As
mentioned,
USAID
initiated
the
GDA,
in
2001,
while
Sida
has
not
been
very
clear
with
regards
to
when
it
started
focusing
on
working
with
the
private
sector.
Wanting
to
set
a
global
standard
USAID
was
amongst
the
first
to
initiate
PPPs
within
development
(Reinicke
and
Witte,
2000).
USAID
clearly
mentions
in
2001
that
the
GDA
will
collaborate
with
companies,
while
Sida
recognize
somewhere
after
2004
that
it
would
be
good
to
work
with
the
private
sector,
but
they
do
not
mention
distinctly
how
to
do
it
until
2012.
Comparing
USAID
to
Sida,
Sida
is
catching
up
through
its
B4D-­‐
program.
To
understand
the
differences
within
the
development
programs
an
analysis
of
why
the
programs
where
initiated
is
needed.
Moving
into
the
theoretical
argument
that
PPPs
occur
to
minimize
governance
gaps
this
could
clearly
be
seen
within
the
GDA.
When
the
GDA
was
initiated
USAID
realized
the
importance
of
the
increasing
power
of
the
private
sector
for
obtaining
development
objectives.
This
indicate
that
USAID
might
have
initiated
the
GDA
because
of
an
operational
governance
gap
where
USAID
found
themselves
lacking
the
information,
knowledge
and
tools
needed
to
respond
to
the
complexity
within
the
liberalizing,
technologizing
and
globalizing
world.
As
mentioned
before,
80
percent
of
the
financing
from
the
US
came
from
corporations
in
the
beginning
of
the
millennia
and
USAID
wanted
to
develop
a
strategy
made
for
the
21st
century
as
stated
by
Colin
Powell.
Clearly,
the
increasing
preference
of
MNCs
made
USAID
emphasize
the
work
with
them.
Therefore,
the
conclusion
is
drawn
that
the
GDA
could
have
been
initiated
because
of
the
gap
in
developing
co-­‐operation
between
USAID’s
ability
to
promote
growth
and
the
ability
of
the
private
sector
to
do
the
same
In
the
case
of
Sida,
it
is
more
difficult
to
find
proof
of
Sida
wanting
to
close
a
governance
gap
regarding
MNCs
since
they
initiated
their
program
later
than
the
US.
It
might
be
that
Sida
wants
to
increase
Swedish
companies’
CSR
work
and
that
Sida
found
a
lack
of
sustainability
efforts
outside
of
Sweden
since
Sida
states
that
they
want
to
spread
the
UN
Global
Compact
guidelines
and
the
OECD
guidelines
for
multinational
enterprises.
Sida
might
see
a
benefit
in
increasing
the
business
climate
towards
more
implementation
of
CSR.

23.
23
Furthermore,
Sida
might
have
wanted
to
align
with
pressure
from
other
development
agencies
and
NGOs.
For
example
Sida
started
working
more
with
PPPs
after
they
had
signed
the
Paris
Declaration.
In
other
words,
this
thesis
point
more
towards
that
Sida
increased
its
work
with
PPPs
due
to
outside
pressure
from
the
international
development
community.
As
stated
by
Resare
Sida
followed
the
international
development
trend
called
the
“Private
Turn
of
Aid”
when
implementing
PPPs
taking
inspiration
from
the
US
and
Great
Britain
(2011).
5.2.2
Overlapping
Preferences
As
mentioned
by
USAID
there
are
positive
preferences
that
increase
when
USAID
partner
with
the
private
sector.
For
example,
development
objectives
could
easier
be
reached
through
increased
resources,
better
risk
sharing
and
increased
funding.
It
is
the
rational
choice
of
the
USAID
to
increase
its
development
objectives.
As
was
proposed
in
the
111th
Congress
USAID
should
focus
on
aid
efficiency
and
effectiveness
(Lawson,
2011).
Because
of
the
budget
constraints
PPPs
reduce
costs
for
USAID
making
decreased
costs
a
preference
for
them.
Also,
as
stated
in
USAID’s
annual
letter
of
2013,
the
partnerships
together
with
the
private
sector
help
USAID
reach
new
places,
technologies,
networks
and
knowledge.
It
is
clear
that
USAID
sees
a
lot
of
different
preferences
coming
with
the
GDA.
One
preference
that
could
be
seen
both
within
the
GDA
and
the
B4D
is
the
preference
of
sustaining
the
development
work
after
the
development
help
has
been
initiated.
In
other
words,
USAID
and
Sida
see
a
better
future
for
their
implementation
strategy
together
with
companies
when
participating
in
PPPs.
Here,
both
USAID
and
Sida
increase
the
self-­‐
sustaining
of
their
programs
by
focusing
on
core
business
interests
and
making
sustainability
profitable.
This
behavior
will
increase
the
likelihood
that
the
initiatives
will
continue
after
the
end
of
government
aid.
Another
preference
brought
up
both
by
the
US
and
Sweden
is
seen
within
the
commercial
dimension,
where
the
countries
want
to
make
new
developing
markets
where
they
are
lacking.
As
stated
by
Reinicke
and
Witte
global
public
policy
networks,
like
PPPs,
can
help
bridge
the
gap
between
demand
and
supply
(2000).
In
this
case
the

24.
24
demand
would
be
the
private
companies
seeking
to
increase
their
global
market.
The
development
agencies
also
want
to
reach
the
poor
in
developing
markets
seeing
potential
in
partnering
with
corporations.
As
mentioned
in
the
context
of
political
attention
given
to
PPPs
in
Sida,
Sida
did
not
mention
private
companies
in
the
Letter
of
Appropriation
until
after
2005.
This
indicates
that
there
were
no
preferences
for
Sida
towards
the
business
sector
until
after
2005.
The
same
pattern
might
be
seen
for
USAID
but
since
the
time
frame
for
this
thesis
only
is
from
2000-­‐2013
other
research
is
needed
finding
out
when
the
overlapping
preferences
started
in
the
case
of
USAID.
5.3
Actors
Looking
at
how
Sida
and
USAID
recognize
the
companies
that
they
are
collaborating
with
in
the
GDA
and
the
B4D-­‐program
could
shed
important
light
on
the
agencies’
differences
within
their
programs.
When
trying
to
analyze
the
theoretical
arguments
taken
from
Schäferhoff
et
al.
actors
can
prevail
interesting
facts.
Due
to
the
importance
of
actors,
the
following
part
will
present
how
the
GDA
and
B4D
relate
to
their
partners.
5.3.1
GDA
Actors
The
GDA
is
designed
to
benefit
from
the
growing
presence
of
multinational
companies
in
developing
countries
through
formal
partnerships
marked
by
shared
objectives,
mutual
contribution
to
resources,
and
risk
sharing
(Lawson,
2011).
According
to
USAID’s
web
page
a
GDAs
must
involve
one
or
more
private
sector
organizations
or
actors.
In
the
GDA,
organizations
and
actors
in
the
private
sector
could
be:
private businesses, financial
institutions, entrepreneurs, venture capitalists,
investors,
foundations
and
philanthropists.
Since
2001
USAID
has
worked
with
over
1700
individual
partners
making
it
hard
to
map
every
single
one
of
them,
because
of
the
broad
scope
(USAID,
2013a).
Examples
of
actors
engaged
in
an
ongoing
GDA
project
with
USAID
are
Unilever,
the
Bill
and
Melinda
Gates
Foundation
and
UNICEF.
They
work
together
to
increase
hand

25.
25
washing
with
soap
in
Uganda,
Kenya,
Tanzania,
Senegal
and
Benin.
This
project’s
goal
is
to
eliminate
viruses
and
infection
amongst
the
people
(Sida,
2009).
Other
companies
that
have
been
working
with
USAID
are
Olam
International,
Cisco,
Root
Capital,
MTV-­‐
EXIT,
MIT
and
Laerdal
Medical
(USAID,
2013).
If
a
partnership
is
going
to
be
successful
it
is
important
to
have
a
clear
understanding
of
the
roles
and
responsibilities
of
each
partner.
USAID
has
stated
clearly
in
the
document
“Roles
of
Partners
in
Alliances”
each
partner’s
function
(USAID,
2013d).
The
functions
of
the
USAID
alliance
partners
within
the
GDA
program
is
that
they
should
bring
significant
new
resources,
ideas,
technologies,
and/or
partners
to
development
activities.
Successful
partnerships
should
mobilize
private
sector
contribution,
both
cash
and
in-­‐
kind
resources,
on
at
least
a
one-­‐to-­‐one
basis
(USAID,
2013b).
The
GDA-­‐model
makes
the
USAID
achieve
more
work
than
they
would
have
managed
by
working
alone.
Moreover,
the
companies
seek
other
interests.
For
example,
Unilever
want
to
increase
community
organization
and
new
approaches
to
marketing
by
partnering
with
USAID
(USAID,
2013e).
Incentives
for
all
partners
participating
in
the
GDA
are
that
risks,
responsibilities
and
rewards
are
shared
and
therefore
making
the
partnership
more
profitable.
Other
aspects
in
which
both
partners
prosper
are
increased
impact,
reach,
efficiency,
and
effectiveness
of
the
respective
investments
in
developing
countries.
Furthermore,
the
private
sector
is
able
to
leverage
USAID’s
expertise,
assets
and
working
relationships
in
a
way
that
enlarge
business
success
and
fosters
the
broader
economic
growth
(USAID,
2013c).
In
conclusion,
the
three
main
incentives
companies
have
in
partnering
with
the
USAID
are
to
access
technical
expertise,
strengthen
stakeholder
network,
and
reduce
financial
burdens
(BSR,
2013).
5.3.2
B4D
Actors
The
most
important
actors
within
the
Swedish
PPP
are
the
private
sector
companies
and
Sida,
representing
the
public
sector.
The
actors
gain
a
lot
in
partnering
with
each
other
when
trying
to
reach
the
goal
to
solve
development
problems.
There
are
three
main

26.
26
forms
of
partnerships
identified:
financial
partnerships,
partnerships
based
on
expertise,
and
partnerships
based
on
market.
The
third
most
important
actor
is
the
civil
society
(recipient
countries),
being
the
major
feature
within
the
development
process.
Mainly,
a
tri-­‐sector
partnership
is
allocated,
including
an
alliance
between
an
NGO,
a
for-­‐
profit
company,
and
a
bilateral
donor
(Runde
et
al.
2013).
One
company
that
Sida
has
been
working
with
from
2011-­‐2012
is
Scania.
Together
with
Sida,
Scania
established
a
vocational
training
school
in
Iraq
with
a
focus
on
transportation.
Other
companies
Sida
has
been
working
with
are
Accenture,
Löfbergs
Lila,
Abba
Seafood,
Tetra
Pak,
Indiska
and
KappAhl
(Sida,
2013).
In
May
2013
Sida
held
a
meeting
together
with
20
leading
Swedish
companies
where
partnerships
were
initiated.
Some
of
the
companies
attending
were
H&M,
Ericsson,
Volvo
and
IKEA.
The
companies
made
an
alliance
with
Sida
stating
that
they
together
will
contribute
to
sustainable
development
and
to
diminish
poverty.
According
to
Sida’s
Director
General,
Charlotte
Petri
Gornitzka,
the
companies
should
be
role
models
and
show
other
companies
how
to
reduce
poverty
(Sida,
2013).
To
conclude,
the
meeting
recognized
that
Swedish
companies
are
increasingly
important
when
it
comes
to
sustainable
development,
although,
it
seems
uncertain
how
they
are
suppose
to
participate
and
make
a
change.
By
working
with
the
private
sector
Sida
wants
to
meet
the
great
global
challenges,
such
as
poverty,
environmental
deterioration
and
climate
change.
Also,
Sida
is
keen
to
achieve
the
Millennium
Development
Goals.
Since
Sida
cannot
do
this
by
themselves
they
want
companies
to
fill
the
untapped
potential
in
achieving
the
development
goals.
Through
working
with
the
private
sector
Sida
wants
to
mobilize
resources
and
encourage
companies
to
develop
new
approaches
within
their
core
business
to
improve
the
lives
of
people
living
in
poverty.
The
last
interest
of
Sida
is
to
encourage
businesses
to
create
a
sustainable
and
inclusive
business
venture.
Sida
is
also
making
it
clear
that
the
private
sector
collaboration
is
not
about
promoting
Swedish
business.
Instead
it
is
a
collaboration
to
encourage
development
that
would
not
otherwise
have
taken
place
within
the
private
sector
because
of
the
commercial
risks.

27.
27
The
collaboration
should
always
combat
poverty
(Sida,
2013a).
The
idea
of
the
partnership
is
not
to
foster
business
for
its
own
sake.
For
Sida
there
is
a
strategic
importance
to
reach
intelligent
partnerships,
including
the
business
sector.
The
collaboration
should
be
based
on
frameworks
that
go
hand
in
hand
with
Sida’s
development
goals.
These
goals
are
usually
consistent
with
serious
corporation’s
sustainability
plans
(Sida,
2013b).
The
business
sector
is
important
in
the
partnership
with
Sida
since
it
offers
development
solutions
when
traditional
sources
of
capital
and
energy
for
development
are
shrinking.
Within
the
B4D-­‐program
corporate
partners
provide
funding,
market
access,
access
to
technology,
supply
chain
power
and/or
intangible
benefits.
Sometimes
donor
companies
could
also
offer
a
valuable
brand
and
also
give
marketing
opportunities
(Runde
et
al.
2013).
5.4
Analysis
of
Actors
5.4.1
Governance
Gap
It
is
clear
that
the
GDA-­‐program
has
been
in
force
much
longer
than
the
B4D-­‐program.
Under
the
GDA
USAID
has
worked
with
more
than
1700
individual
partners
while
Sida
has
just
started
working
with
20
companies
last
May
and
it
is
hard
to
find
how
many
partners
that
Sida
has
been
working
with
before
last
May.
Again,
this
proves
that
Sida
recently
has
recognized
the
importance
of
the
private
sector
within
aid
development
while
USAID
recognized
the
companies’
importance
already
in
the
beginning
of
the
millennium.
Again
this
proves
that
USAID
early
on
identified
a
governance
gap
between
its
own
ability
to
promote
development
and
the
ability
of
private
companies
to
contribute
to
fulfillment
of
the
objective,
while
Sida
probably
was
more
forced
by
outside
pressure
to
work
through
PPPs.
5.4.2
Overlapping
Preferences

28.
28
The
agencies
are
almost
the
same
in
one
respect,
their
stated
goal
with
working
alongside
corporations.
Both
state
that
the
goal
is
to
more
effectively
reach
higher
sustainable
development
more
effectively
through
new
resources,
ideas
and
technologies.
These
are
the
clear
preferences
of
both
agencies.
For
example
Sida
use
Scania
to
easier
reach
mechanics
in
Iraq.
This
shows
that
federal
aid
like
USAID
and
Sida
often
have
a
wide
expertise
within
development
work
but
often
lack
specialized
industry
knowledge
the
private
sector
has.
5.4.3
Level
of
Compliance
Differences
exist
in
the
agencies
viewpoint
of
how
the
companies
are
perceived.
For
example,
Sida
makes
it
clear
that
partnerships
with
companies
are
not
used
as
promoting
business
but
to
encourage
development
that
would
not
have
occurred
due
to
the
commercial
risk.
This
indicates
that
Sida
needs
to
put
more
pressure
on
the
companies
they
are
working
with.
Sida
does
not
want
to
be
seen
as
a
platform
where
businesses
can
flourish
and
increase
their
profits
but
a
platform
where
companies
can
help
Sida
to
work
with
poverty
reduction.
At
the
same
time
USAID
stress,
according
to
them,
the
positive
aspects,
like
reducing
operating
costs,
increased
sales
and
increased
brand
awareness,
for
companies
that
want
to
partner
with
USAID
while
Sida
does
not
mention
this.
It
seems
as
if
USAID
sees
company
profits
as
something
positive,
while
Sida
views
profits
as
a
sensitive
matter.
Since
the
GDA
is
seen
as
more
pro
business
than
the
B4D
the
GDA
seems
to
have
a
lower
level
of
recruitment
for
compliance
than
the
B4D.
This
argument
is
strengthened
through
the
statements
from
Sida
saying
that
business
needs
to
be
serious
and
comply
with
Sida’s
development
goals
through
the
company’s
sustainability
plan.
5.5
Governance
Structure
The
following
part
of
the
thesis
takes
a
closer
look
at
how
USAID
and
Sida
manage
their
PPPs.
The
guiding
principles
and
governance
structure
will
mostly
increase
the

29.
29
understanding
of
the
development
agencies’
compliance
level
explaining
how
the
PPPs
are
managed.
Also,
the
argument
of
preferences
overlapping
is
discussed.
5.5.1
Guiding
Principles
of
the
GDA
There
are
seven
key
principles
guiding
the
alliance
between
USAID
and
the
private
sector.
The
principles
are
based
on
the
core
themes
of
trust,
equity,
competencies,
inclusivity,
partnership
alignment,
mutual
benefits,
and
transparency.
The
following
table
contains
the
most
relevant
principles
for
GDA
cooperation.
Principle
dimension
Explanation
Trust
Trust
is
an
essential
foundation
enabling
partners
to
work
together
despite
individual
alliance
organizations'
differing
interest,
motivations,
cultures,
values,
and
infrastructures.
Trust
is
also
fundamental
to
building
a
fruitful
relationship
with
communities
an
alliance
is
trying
to
work
with
or
in.
Equity
Equity
implies
that
each
partner
is
equally
welcome
and
important
to
an
alliance.
Global
Development
Alliances
are
created
on
the
precept
that
each
partner
is
of
equal
value
to
an
alliance.
Partnership
alignment
Each
partner
should
come
together
to
jointly
define
an
alliance's
objectives
according
to
overlapping
interests
and
agendas.
Mutual
benefit
Healthy
alliances
will
work
toward
achieving
specific
benefits
for
each
partner
over
and
above
the
common
benefits
to
all
partners.
If
each
partner
in
an
alliance
is
expected
to

30.
30
contribute
to
the
alliance,
they
should
also
be
entitled
to
benefit
from
it.
(USAID,
2013)
5.5.2
Guiding
Principles
of
the
B4D
For
the
B4D-­‐initiative
there
are
ten
guiding
principles.
The
following
table
introduces
the
principles
studied
in
this
thesis.
Principle
dimension
Explanation
A
social
problem
and
an
area
of
developmental
improvement
as
the
point
of
departure.
Projects
should
be
anchored
in
defined
problems
and
needs
in
partner
countries,
and
not
be
driven
by
company’s
supply
desires.
The
scope
of
such
problem
solving
and
benefits
to
the
partner
countries
should
be
the
key
justification
for
support
by
Sida.
Country
strategy
and
sector
alignment.
The
project
should
be
within
the
parameters
of
the
country’s
existing
national
policies,
e.g.
Poverty
Reduction
Strategies.
Preferably,
the
PPP
should
be
focused
on
the
key
sectors
defined
in
Sida’s
development
assistance
in
line
with
the
Paris
agenda
but
is
not
limited
to
these
sectors.
Rights
based
approach.
The
project
shall
align
with
a
rights-­‐based
approach,
strengthening
key
principles
such
as
participation,
transparency
and
accountability.
Operations
should
support
and
complement
existing
local
democratic
and
institutional
management
systems
rather
than
be
contra
productive
to
these.