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TRANSCRIPT
PRIVATE ACTORS IN THE AID LANDSCAPE
Mapping an emerging segment of Norwegian engagement in Sub Saharan Africa
www.bi.no/MICRO
AGENDA
• Introduction – Anne Welle-Strand
• Hybrid organizations – Pernille Dehli
• The Business Sector – Erik Kimmestad
• Civil Society Organizations – Erik Kimmestad
• Concluding remarks – Anne Welle- Strand
MOTIVATION
• Five factors: – traditional development aid,
– foreign direct investments and business development,
– remittances,
– financial institutions,
– international regulatory organizations
• How are these five factors contributing to effective aid to developing countries?
FOREIGN DIRECT INVESTMENTS
• The primary engine for development
• ”Doing well” and ”Doing good”?
• Corporate Social Responsibility (CSR):– Common business practice– Organizational construction– The value chain of a firm
Friedman, M. 1970. The Social Responsibility of Business is to Increase its Profits. New York Times, 13.09.1970.Porter, M. E., and Kramer, M.R. 2002. The Competitive Advantage of Corporate Philanthropy. Harvard Business Review 80 (12):56-
69.
Introduction
Hybrid Organizations
Capital flowsMotivational
factorsCooperation
patterns
Business Sector
Capital flowsMotivational
factorsCooperation
patterns
Civil Society Organizations
Capital flowsMotivational
factorsCooperation
patterns
DiscussionConcluding remarks
Private Foundations
Mega foundations
Small private foundations
African Diaspora
NGOs that raise their own funds
Corporate Philanthropy and SR
Corporate foundations
CSR for int'l reputation Global
firms
CSR for license to operate globally and
locally
Hybrid
Investment funds
Initiatives
Triple bottom line business models
New wave corporate foundations
Civil Society Organizations
NGOs that raise their own funds
Semi-government NGOs
Business Sector
Corporate foundations
CSR for int'l reputation Global
firms
Core activities
Hybrid Organizations
Investment funds
Venture philanthropists
Triple-bottom-line business models
Private individuals
Adjusted framework:
World Bank framework:
HYBRID ORGANIZATIONS
An umbrella term for Norwegian organizations that combinesbusiness methods with development objectives
Utilizes the skills and competences of individuals and organizations
As access to capital and competencies are key attributes, partnershipsare needed in order to reach development objectives
HYBRID ORGANIZATIONS:Capital Flows Cooperation Patterns Motivational factors
Varies from large private-public partnerships to small private foundations
Amount spent in Sub Saharan Africa varies
Funds tend to cluster that are recipients of Norwegian Official Development Aid
All want more cooperation
Lack of information is an obstacle –need to establish/join networks
Actors’ perceptions of cooperation with traditional actors vary
Belief in business to have developmental impacts
Aim to get most out of individuals' and organizations' knowledge, experience and skills
THE BUSINESS SECTORAttention is increasingly being given to the role of businesses in developing countries
2009 government White Paper on development policy (nr 10) calls for increasing global capital and value creation in developing countries to fight poverty
FDI to developing countries constitutes almost five times the amount of foreign aid from all OECD countries combined; aid has a lesser role
Capital Flows Cooperation Patterns Motivational factors
Seeks to unite social and capital gains
Corporate philanthropy less relevant forNorwegian companies
Operates generally on a basis of reinvesting revenue with the aim of future gains
Social benefits are generally spin offs from market economics
Partnerships only initiated when operating outside of core area of expertise. Especially in CSR activities
Usually confined to information exchange
CSR understood as value-creation and risk management, not as philanthropy
CSR a tool for obtaining business objectives
Businesses wants to do more, but are kept from doing so due to organizational priorities
Obstacles encountered are often country-specific
THE BUSINESS SECTOR:
CIVIL SOCIETY ORGANIZATIONS:
Claims operational independence is compatible with government dependency for funding
Prospect of government dependency viewed as unproblematic; civil society organizations and the government have coinciding interests
Availability of public funds lessen the need for private funding; unnecessary to cater to private sector demands
Capital Flows Cooperation Patterns Motivational factors
Majority of funds stems from public sources, but increasing importance of funding from private sources.
Private funding is regarded as a mean to increase organizational independence, legitimacy and accountability, as well as raising financial predictability
Experiences regarding knowledge exchange and implementation of projects vary, but are often seen as being problematic.
The actors usually appreciate the value of business operational methods, and realize the potential benefits for their organizations.
Cooperation with private actors is likely to increase
A shared desire to encourage development.
Focus of operations is commonly determined by the organizations’ values, mission or religious belief.
Budgetary restrictions and fear for fragmentation is the main obstacles for doing more
CIVIL SOCIETY ORGANIZATIONS:
NORWEGIAN FDI EXAMPLES
• Pride and Prejudice – Business, Aid and Charity
How is Grameenphone contributing to the overall development of Bangladesh?
Welle-Strand, A. and Molden, L. 2007. Grameenphone and Telenor affecting Bangladeshi Socio-Cultural Development: Pride and Prejudice. Oslo: MICRO, BI Norwegian School of Management, No. 1
Welle-Strand, A. (2008) Pride and Prejudice: Business, Aid and Charity. Telektronikk 2.2008
GRAMEENPHONE STUDY: FINDINGS
• Technology and competence transfers
• Local competence development
• Transfer of sound policies for business and management conduct
• Great level of autonomy
• Social benefits
• Avoiding corruption
• Transparency
THE NEED FOR RESEARCH
Creating Value (s) Norwegian Aquaculture and Hydropower Investments in Chile
•Biased media
•The three winnersThe developing countryThe ”private actors” communityNorway
Welle-Strand,A. Toje, A.(2009) Creating Value(s)? Norwegian Aquaculture and Hydropower Investments in Chile
www.bi.no/MICRO