PPP and LED

Any local development effort involves public and private actors. On the public side, the legislative and several branches of the local or regional executive have to play a role. On the private side, chambers and other business associations have to participate. But there may also be active involvement of companies, most obviously real estate and development firms and utilities, but also other companies, such as large firms involved in supplier development or community development activities.

In many developing countries, it is still common to find not particularly adequate actors on either side. Public agencies are underfinanced, lack highly skilled staff, are excessively bureaucratic, have no idea what a business mindset is like, etc. Private organizations, in particularly chambers and association, are understaffed, not very professional, highly politicized, offer little services to their members, lack a clear mission, etc.

In a setting like this, it is tricky to launch a LED initiative. At the same time, it will often be unlikely that these problems get sorted out for some reason in the medium term. Therefore, stakeholders who want to launch a LED initiative have work with the institutions which are there. Rather than waiting for public sector reform to happen and organizational development in chambers and associations to fall from heaven, a LED initiative creates an opportunity, and possibly a motivation, for these things to occur.

It is, however, crucial to point out that in many places both public sector reform and organizational development are closely linked to the viability of public-private partnership (PPP). LED ought to be based on PPP. But if a setting fits into the description above, it is unlikely that PPP can work out, except in a traditional clientelist way. Organizational evolution within the process of LED can create the preconditions for successful PPP.

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