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A new development era? The private sector moves to the centre

The last few years have witnessed the emergence of a loose but potent assemblage of ideas that have all but supplanted the recent “aid effectiveness” agenda. “Development effectiveness”, to use a term that became popular at the 2011 Busan High Level Forum on Aid Effectiveness, recentres economic growth as the principal engine of international development and foregrounds the private sector as the central driver of this growth. The concerns of good governance, social welfare and poverty reduction are not going to disappear, but their place in the sequencing and focus of many development actors and institutions is changing. Intertwined with this process is the rearticulation of foreign aid (official development assistance) as a catalyst for development, and the growing use of “blended” public and private finances to support investment and growth. If this growing trend in international development thinking and practice is to have genuine development outcomes, then (1) private-sector-led policies and programmes must actively engage with win-lose scenarios and not just assume win-win scenarios; and (2) the quality and not just quantity of economic growth must be supported by the articulation of clear and credible principles, institutional structures, and appropriate metrics and incentive mechanisms, and not simply aspirational statements.