Two to Tango: Public-Private Collaboration for Productive Development Policies

Abstract

work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/ by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of the IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that the link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. (PdPs) cannot be found in economic textbooks. in conventional theory, either the market provides the best solutions based on its know-how and profit incentive or, when private returns deviate from social returns, the public sector takes note and intervenes with policies that correct the market outcome. If the market works well, the public sector should abstain from interfering; if the market fails, the public sector should act to bring it into line. In no case is there room for collaboration.However, public-private collaboration figures prominently in the actual experience of successful productive development policies, some of it documented in the last chapter of the book. Policymakers need to access the deep knowledge held by private producers in order to learn about market failures and formulate the right policies to address them.Private actors may benefit from coordinating around public initiatives and sharing the broader purview that the public sector brings. Both public and private sectors can win from collaboration in information sharing and coordination, increasingly so as the economy modernizes.On the other hand, public-private interaction may open the door for private capture of public policy and lead to damaging productive development policies. For all the promise of collaborative win-win solutions, private businessmen will always prefer to receive preferential treatment and subsidies over good policies. Good government is required to make the endeavor of public-private collaboration worthwhile. The history of industrial policy in Latin America often dominated by private capture of vi TWO TO TANGO public policy is a reminder that strong institutions of public-private collaboration are needed.This book analyzes 25 examples of public-private collaboration for PDPs in Argentina, Colombia, Costa Rica, Chile, and Uruguay with an eye to understanding the rationale and value of such collaboration as well as the challenges it poses. The cases reviewed clearly show that there is active private sector engagement in a wide variety of mod...

Mesas Ejecutivas in Peru: Lessons for Productive Development Policies

“…In that sense, beyond the ‘information‐sharing’ in a ME there is significant amounts of what Fernandez Arias et al. () call ‘learning‐sharing’.…”

Two to Tango: Public-Private Collaboration for Productive Development Policies

“…Colombia, Costa Rica, Chile, and Uruguay, depart from that view (see Fernández-Arias et al, 2016). Following newer developments in the literature, we assume that under current conditions the public sector cannot hope to have all the required knowledge to assess the needs for intervention and design appropriate policy, for the fundamental reason that some of that information is held by private firms (Rodrik, 2004).…”

“…This section summarizes some of the main observations and lessons about public-private collaboration derived from the cases studied in Fernández-Arias et al (2016). The interested reader is invited to download the book with the country studies of this project.…”

“…Chapter 7 of Fernández-Arias et al (2016) and in Devlin and Moguillansky (2009). This highlevel collaboration may validate criteria used for selecting priority sectors to be promoted and generate consensus around a development strategy.…”

“…Public-private collaboration needs to successfully deal with both concerns, demonstrating that it is an effective tool to discover and implement successful policies. As the country studies in the companion volume (Fernández-Arias et al, 2016) …”