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Structural Adjustment and Public Private Partnerships The Impact of International Reforms on Domestic Policies Overview of the Discussion International: Structural Adjustment in Practice- From Normative to Empirical Challenge Domestic: Public Private Partnerships in Pittsburgh and the World Limited Government Assumptions and Administrative Reforms The Reagan Revolution and the New Orthodoxy Reminder: The Source of the Reforms and the Bitterness Reagan and Thatcher Neo-Orthodoxy 1983-1991- End of Cold War and Dismantling of the Soviet Union Leftist Slogan- 1975 “Maggie Thatcher Milk Snatcher” Thatcher had served as Minister of Education in Tory Government and tried to end school lunches. U.S. Reforms Attack on Keynesian Economics Rejection of Regulation, Fiscal Policy and Wage and Price Controls U.S. Focus on Monetary Policy Need for Budget Reduction (no deficit), and Balanced Budgets Monetary Policy Control the Flow of Money into The economy (Interest Rates, Production of Money, and regulation of Reserves for Loans) International Policy Reform: Review The Current State of Management of Policy Reform and Structural Adjustment a. IMF stabilization and trade liberalization b. Currency reform, auctions- end of subsidies (end urban privileges) Two Icons of NeoOrthodoxy IMF Milton Friedman Policy Reforms c. Market prices for agriculture and industrial goods d. Deregulate the economy e. Most Importantly: Free Trade f. Administrative Reform: Privatization Internationally: Privatization Redux Key: ConditionalityPrivatization of the economy Bridging and sectoral loans and grants (THE CARROT) The major source of international involvementConditioned on privatization Privatization "Privatization fights laziness, privatization fights poverty, privatization fights smuggling, and privatization fights unemployment.“ (Swahili) Policy Reform-Conditionality Conditionality- World Bank and UNDP and the "Management" Team of Resident Ambassadors SAPs- Focus on Policy and Administrative Reforms in return for loan restructuring and foreign aid Administrative Reforms Stabilization and Conditionality Requirements Public Sector Reform Targets World Bank Targets Administrative Reforms Reform of the bureaucracy a. The problem: Need for skills b. Individual international Consultants and Contractors work with investments and the service/commercial sector Structural Adjustment Principles and Conditionality Structural Adjustment Problem of debt: Considered a Third World Problem not a Problem for Developed Countries Jamaica- #1 (Signed in 1977) Impact: Donor monies drive the system in the degenerated state Structural Adjustment Second World as new debtors- Chad vs. Russia a. Transitional States-Hungary vs. Mongolia b. Rise of Asia and trade blocks c. Crisis in Asia and their return to debt management SAPs and Russian Oligarchy Policy Reforms- Issues 1. Controversy: The receivership committee- The UN Resident Rep., theWorld Bank Representative and the IMF delegate plus resident ambassador committee 2. Structural Adjustment State looks like colonial antecedents. 3. Mildly Opposing views of many UNDP Representatives (The role of the Resident and Country Plans) The Other World View of SAPS U.S. (Domestic Policy in the 1990s): David Osborne and an alternative to Privatization Reforms (according to Osborne) 1. Strategic Planning and Management (not incrementalism) 2. Deregulation 3. Performance Management 4. Merit Recruitment 5. Decentralization and Development of Local Government Administrative Reforms 5. End of Corruption 6. “Reinventing Government”- end to hierarchy and intra-governmental competition 7. Rewards based on Performance 8. Intra-governmental Competition U.S. Reforms: From Reinventing Government to PublicPrivate Partnerships NGOs, Business and a streamlined state Beyond Privatization Public Private Partnerships The Rhetoric Public Private Partnerships: Domestic and International Contexts Defined: Partnerships (formal or informal) between: Non-Governmental Organizations (NGOs), or Non-Profits Community Based Organizations (CBOs), Governments, Donors (International and Private), Private- Business Sector. Public Private Partnerships: Origins a. Domestic Urban Coalitions- Coming out of Great Society b. International Donors- Way of Dealing with Umbrella Grants and implementation of development policies c. Accepting government or donor money means accepting donor principles The 1964 Great Society Speech Public Private Partnerships Public Private Relationships is a concept that grew out of efforts to “downsize” the role of government. They refer to relationships between the public sector, nonprofit and nongovernmental sector, and the private sector. PPPs have also be referred to as: Privatizing Government, Outsourcing, and Devolving Government. The most obvious outcome of PPP movement has the growth in the number of nonprofit/nongovernmental organizations that provide a wide range of public services. Public Private Partnerships: The Use of Grants The idea is that by drawing upon the nonpoliticized interests of the nonprofit/ nongovernmental sector and the expertise and acumen of the private sector, public services can be provided more costeffectively and efficiently and thus create better public value for taxpayers. Thus the desire to create better public value is the primary objective behind the PPP movement. The PPP movement joins together public management, the political neutrality of nonprofit/nongovernmental organizations and the ingenuity of free market forces. What? Public Private Partnerships The underlying rationale for Public Private Partnerships is the belief that 1. The nonprofit/nongovernmental sector is closer to the community and has a better sense of the needs of the community and thus can more costeffectively apply resources and 2) The private sector is more efficient at responding to market forces because of private investment and than large public bureaucracies. The Model Public Private Partnerships Building PPPs brings the public, the nonprofit and non-governmental and the private sector together for a common purpose. PPPs involve a set of elements of political good will management: Public Private Partnerships 1) building a climate of tolerance, active support or ongoing operational assistance for 2) a policy or overall strategy to achieve specific objectives among those outside the scope of those who have direct authority over the domain 3) but whose operational assistance is necessary to achieve the objective. Not Competitive at this stage Public Private Partnerships 4. Comes out of Domestic Non-Profits and Block Grants 5. Internationally Moving Beyond Structural Adjustment and Policy Reform? f. Seen by some as an alternative to Contracting Out- Others as part of it g. Critics see it as detrimental to a market approach to economic change Understanding the Public Sector of Allegheny County Allegheny County is made up of 130 townships and boroughs. Each of these has its own public manager and council. The city of Pittsburgh is part of this mix of local government. Operating Budget for the County for 2003 is $654 million. This budget provides for such services as: Children and Youth Services Jail/County Police Port Authority District attorney coroner Demographics of Allegheny County Total population 1,281,666 84% White 12% African American 1.7% Asian 1% Hispanic 1/10 of 1% Native American 18% 65+ 6% under 5 years old Public Private Partnerships Characteristicsa. Targeted at the expansion of Social Capital and Synergy in the promotion of Economic and Social Development b. Seeks a holistic or Integrated Approach to Economic and Social Development c. Involves informal processes, cultural sensitivities as well as legal norms and contracting principles. Human Resources Development Commission, Allegany County Maryland Public Private Partnerships (PPPs) PPP Supporting Factors in the Domestic and International Context 1. Democratic Governance- private sector and NGOs seen as legitimate actors; transparency, accountability and responsiveness 2. Rational Government- Merit Principles, anti-corruption environment, acceptance of non-state actors as service deliverers. 3. Use of Contracting Out and Controlled Sub-Grants Public Private PartnershipsFactors Factors that Support PPPs 3. Decentralization- Subsidiarity: Governance devolved to the lowest levels capable of implementation and contracting out 4. Legal Frameworks- Acceptance of Contractual Agreement as the basic organizational relationship Public Private PartnershipsFactors 5. Institutional Norms, Organizational Capacity and regularized principles of interorganizational interaction. Requires high levels of capacity building 6. Social and Economic Stability 7. Organizational flexibility across all sectors Public Private Partnerships- Factors 8. Social and Institutional Pluralism- win-win rather than zero sum game across social, ethnic, religious and racial groups 9. Social Networks exist at Grass roots, and intermediate as well as higher levels of government-See diagram Reference: Jennifer M. Brinkerhoff, Partnership for International Development: Rhetoric or Results (Boulder, Co.: Lynne Rienner Publishers, 2002) Group Presentations