Globally, there has been increasingly a move towards decentralization and devolution of responsibilities to local levels of government. At the same time local governments and municipalities experienced a shortage of human and financial resources to fulfill their obligations in basic service delivery, in the context of continually growing demand for services due to population growth, migration and urbanization. In the past the market-based private sector participation ideology has often been a driving force for establishing public-private (community) partnerships (PPPs).

The PPP approach needs, however, to be aligned with the realities of the poor as well as with the existing capacities of the often institutionally weak local governments and municipalities and requires a higher focus on small-scale private sector, which is often a key stakeholder in service delivery to the poor.

Lack of capacity and hastily prepared policy instruments, a lack of previous experience and knowledge, lead to many governments in poor countries approving PPP contracts and regulatory frameworks that are at best “poverty neutral” and at worst simply detrimental to the poor. Correcting and redesigning such contractual omissions leads to governments having to renegotiate contracts with their private counterparts or to retro-fit poverty reduction add-ons and correspondingly alter their regulatory requirements. This becomes a particularly costly exercise for the state; it sets uncertainty and stalls private sector investment in public services delivery, thus generating general public discontent and opposition to any form of private sector involvement in the provision of basic services sector.

To extend services to the poor, it is the governments, in close consultations with all stakeholders and the poor in particular, that need to adopt pro-poor policies and put in place regulatory regimes that effectively and consistently coordinate and oversee the achievement of poverty alleviation targets, whether delivery is undertaken by the public or the private sector. It is the responsibility of governments, again in close consultations with all stakeholders, to define these targets, make necessary regulatory changes, and to build them into contracts with appropriate incentives for private operators and other non-state providers to meet service delivery targets and enforceable penalties for failure of doing so.

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Adequate understanding is needed

Pro-poor service delivery therefore needs to be based on an adequate understanding of how service delivery (improvements) can be designed to benefit the poor and to ensure gender equity and women’s participation. Demand-led or community-driven service delivery, with dialogue and participation, planning, implementation and management of services and infrastructure is advantageous for increasing service sustainability and user benefits. It also promotes transparency and accountability and builds social capital by empowering individuals and groups to participate and to eventually lead their own development.

Pro-poor PPP performance therefore needs to be explicitly built into PPP regulatory frameworks and supporting mechanisms such as technical options, performance standards, service gradation and financial arrangements. If not addressed adequately, PPP targets may not reflect the needs of the poor or even if they do, private sector partners may be unable to meet such poverty reduction targets in PPPs.

To expose institutional and political marginalization and key concerns of the poor, participatory studies of livelihoods may be needed. At the same time existing service delivery systems, formal as well as informal, need to be analyzed to ensure that the new/improved system does not negatively impact those whose livelihoods depend on the existing system. For effective pro-poor service delivery and monitoring of service impact, baselines will be required. Furthermore, to allow services to optimally benefit the poor, service delivery sectors need to be prioritized and be affordable, accessible and gender responsive and the approach in itself needs to maximize labor employment opportunities for the poor.

The noted constraints in existing service delivery systems, has led to a search for more innovative and inclusive approaches for the delivery of sustainable services to the poor. This often created a shift away from direct public sector provision to service delivery models with some form of partnership with non-state actors like e.g. private sector (profit-making), non-governmental organizations, community based organizations, beneficiary communities, faith-based organizations and other formal and informal civil society organizations. These PPPs are seen as a potentially effective and complementary way to mobilize resources and diffuse expertise, technology and innovation.

By using the diversity and complementarity of the public sector and the vast range of non-state actors, governments are potentially better able to understand and address the needs of the poor and a valuable modality to increase and improve basic service delivery, and to achieve sustainable development at the longer term.

The sustainability of services depends to a large extend on the capacities of involved stakeholders and especially communities/citizens, to sustain and deliver services over time. When services are sustained through partnerships capacities are required for e.g. continuous relationship building, dialogue, renegotiation of contracts, adaptation to changing contexts and demands.

Apart from the social and organizational side of sustainability of services, also environmental sustainability needs to be addressed. In many cases services depend on natural resources, which can be depleted if not managed properly or which can be affected through ‘external’ events like e.g. climate change. For example, water sources may be overexploited or may diminish in capacity because of e.g. higher average temperatures, changing precipitation patterns or melting glaciers and if solid waste management systems fail this may result in polluted waterways and water supplies, unsightly, unsafe, unhealthy and unattractive neighbourhoods and residential areas, and dangerous temporary or permanent dumpsites.

On the other hand, when interventions are linked to poverty alleviation and sustainable development in general, as well as in relation to specific Sustainable Development Goals, solid waste initiatives may for example create and facilitate sustainable (economic and health) improvements of lives and livelihoods at many scales through local business opportunities and jobs creation and addresses climate change through the reduction of greenhouse emissions.

Capacities for sustainable service delivery, for sustainable resource use and for adaptation to climate change have therefore been integrated into the capacity assessment manual for (pro-poor) PPPs that Development Connect developed and applied globally.