How to win the argument on the private sector; seeing like a liberal, and a lifecycle approach to supporting aid agencies

Had a great day at Oxfam Australia last week, immersed in a series of conversations that were dotted with ‘synaptic moments’, when different bits of thinking come lightbulbtogether in your head and a lightbulb goes on. Three examples:

Whose private sector is it anyway? The drumbeat of private sector rhetoric is deafening in Australia’s aid sector. This seems to worry NGOs, who somehow feel marginalized by the new language. That’s bonkers – about half our long term development programming is directly engaging with the private sector; the trouble is we’ve given it a naff NGO name instead – livelihoods.

When it comes to the key driver of poverty reduction – jobs – the kinds of private sector we work with – small farmers, informal economy, SMEs, are far more important than multinationals, which only generate about 3% of world jobs. So how about renaming our livelihoods work as ‘private sector engagement’? Given how much we spend on livelihoods private sector, I think there’s a fair chance that we can show that we give greater priority to the private sector than the donors who are berating us about it – wouldn’t that be sweet?

Obviously, the big companies that are usually equated with the term ‘private sector’ matter too – but there it’s more about obeying the law, paying taxes, whether they are promoting social cohesion or division; instability or stability etc. For those that are based in the North, there’s an important ‘do no harm’ principle for our foreign investors. And our work on extractives, food companies etc reflects that too.

Do they know they’re the private sector?
Do they know they’re the private sector?

I think we could also use private sector language much more to explain how change happens, and in some cases it actually sheds extra light. People largely get what Venture Capitalists do, so if we describe a ‘small bets’ approach of trying lots of different approaches and sifting out what works, then calling it a VC model, as we did in Tanzania, can help explain it as well as prise extra dosh from donors who are also looking to hang some more private sector language on their work.

Thinking about markets can also be really helpful to the way we talk about aid programmes. Markets are designed to produce variation and failure, as well as success. That’s what Joseph Schumpeter captured in his great phrase ‘creative destruction’. To allow that creative destruction to take place unhindered, capitalism has generated all mechanisms such as bankruptcy and insurance.

In contrast, parts of the aid industry appear to seek a zero failure rate – that’s a model much closer to Josef Stalin than Milton Friedman. So when someone bangs on about the need to ‘be more private sector’, one response could be ‘absolutely – that’s why we need to get rid of linear plans, and think about experimentation, failing faster, and getting better at spotting and backing success, even when it’s accidental.’

I’d be interested in you reactions to this rant – it’s a highly symbolic debate that is not going to go away.

Seeing like a liberal: NGOs working in countries with conservative or right-wing liberal governments often fail to ask themselves which parts of their ‘repertoire’ are Hague and Joliecompatible with those kinds of values. So we’re surprised (or sceptical) when right wing governments champion women’s rights, or David Cameron criticises Tony Abbott for not being a true conservative on climate change (i.e. wanting to conserve the planet). To this I would add support for defending ‘civil society space’ when, as in many countries, it is being closed down by government.

Grey Panthers meet Windows of Opportunity: Imagine my joy when two hobbyhorses met and made passionate love together. Grey Panthers is the idea that the best campaigners may well be retired captains of industry; ‘old men in a hurry’ keen to do something good. So why do we persist in equating campaigns with students and youth? But it gets more interesting when you stand back and consider life paths – it turns out that people that there are some common ‘critical junctures’, when people make big decisions in their lives – typically going to university, having your first child and retiring.

From an NGO point of view, you should try and adapt your asks to those life cycles – when people are time rich, ask them to campaign, when they are time poor, ask for their money. We do that at the first critical point – all those stalls at freshers’ fairs trying to sign up student activists. But do we do anything at the other two? I fear we just see retirees as sources of donations and legacies, rather than people with time and networks to spare.

A more subtle, holistic version would acknowledge that people’s lives follow different courses, and give them options to choose the balance of cash v activism that fits their particular trajectory. Anyone got a decent timeline or graphic on these ideas?

By the time you read this, I’ll be on the plane back from Australia and PNG – great two weeks, and a huge thanks to all at DFAT, Latrobe and Oxfam who set it up. More Aussie reflections next week.

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8 Responses to “How to win the argument on the private sector; seeing like a liberal, and a lifecycle approach to supporting aid agencies”
  1. Tony Burdon

    Nice one on the private sector Duncan. And of course the purpose of this effort is to reduce poverty – creating more (formal and informal) jobs and raising incomes. I hope soon you’ll be talking about NGO efforts to create jobs, and the actions needed to create a flourishing and dynamic private sector that will enable this to happen. regards, Tony

  2. Jim Tanburn

    To be more private sector is “to get rid of linear plans, and think about experimentation, failing faster, and getting better at spotting and backing success, even when it’s accidental.” This is all good, Duncan, especially on risk; let me add a few more: being more private sector means giving up the habit of taking the high moral ground. It means focusing on a narrower (and more achievable) set of priorities. It means focusing on opportunities more than on problems; focusing on pragmatic solutions more than on methodologies and concepts. And acknowledging the importance of individuals in driving change. Although this is all means rather than end, of course (as you suggest).

  3. Rob Grant

    I agree that this would be a welcome shift in the language of development NGOs. “Livelihoods” was very helpful in directing attention to the multiplicity of ways that people in poor societies obtain and ensure an income, dispelling the notion that a typical rural Tanzanian for example is just “a farmer”.
    However, as the post suggests, it has become less helpful if used as a way to avoid talking about markets and economics. Similarly, if livelihoods has pointed out the importance of social relationships for poor people earning a living it would be ironic were this to distract us from sociological and political analysis. Let us take livelihoods as a cue to properly examine how economic activity is related to social and political institutions in developed and developing countries.
    Livelihoods should not become a cuddly alternative to talking about the private sector, or to thinking and working politically, among those who are concerned about how these interrelationships may be important for the poor. Such nose-holding about economics and politics will only leave the policy field open to those with fewer such concerns.

  4. Andrea Iff

    Is it really the aim now that aid and development are becoming more private sector? First reaction: how stupid is that? Justification: I and my colleagues are working on private sector and peacebuilding since several years and support big and small companies in the field. When I was in the Congo Basin for such a consultancy, a good colleague confronted me with a relevant question: why do you want to change your language when talking to these businesses? We are specialists in what we do, they are specialists in what they do, we should just work together and not adapt ourselves to them. Second reaction: We are already doing a lot of things re private sector (M4P, private sector development, micro credits, etc. etc. etc.) and these guys are doing a great job. Let them be and let livelihood be livelihood. Justification: To start and label things differently for our parliamentarians is the wrong way to go. Rather, we should try to deconstruct our own understanding of state and market, as this is what often hinders us to see the private sector as a partner in development. As I had to realize myself, this will be easier for all people in the South than for us in the North. We have clear dichotomies of state and market engrained in our heads. In a course that I thought, participants from fragile environments were puzzled about my dichotomies of public and private and non-profit and profit, as their everyday experience is much different.

  5. William Hayes

    Wonderful (for an outsider — T C Mits) to read what you’ve packed into this post:
    — Whose private sector is it? (ours!)
    — do no harm
    — small bets & lots of approaches
    — zero-failure (vs. incremental improv)
    Thank you.

  6. Kate

    In response to the Grey Panthers Duncan, I have worked in a few industries that are male dominated and while I agree that there is a point where these “captains of industry” decide they need to save the world (because they no longer need to profit from it?) I am more inclined to correlate it with their first grandchild than retirement, although sometimes these come together. My experiences with these (mostly) men has been that when the epiphany happens they wander around talking about it like no-one else ever thought about before them blatantly ignoring the fact that dismissed the rest of us for years previousl. I say tread carefully in getting “grey panthers” as activists – getting them to think differently (eg not about making a profit) while they are trying to take over your organisationis pretty fraught.

    • Duncan Green

      Wise words Kate, an awful lot of advocacy at some point involves expressing delight and amazement at their insight, when a target repeats back to you what you’ve saying for years!Interesting point on the grandchildren – would love to see a life cycle analysis of a cohort of activists to get some sense of where the tipping points typically occur. And yes, one of the reasons why the Grey Panthers idea has not caught on, I think, is that ex captains of industry are not going to take orders (or even advice) from young campaigners, however much they know!

  7. Marc DuBois

    Everything you write here makes sense. And has made sense for a while now. So what is the reason people working in NGOs don’t do what makes sense? There must be a few good answers. Mine would be that it is deeply important for people working in NGOs to distinguish themselves, their work, their calling, and their choices from those in the private sector (from their own friends, family and neighbors?). This is about identity, not what makes sense. So it will change with time rather than through revelation.

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