15, October, 2014

Alliances Towards a Common Goal: The Role of Public-Private Partnerships in Rural Development In Latin America

In Latin America, public-private partnerships have proven to be a successful tool for promoting rural development. Adequate coordination and involvement of stakeholders at the local level has been fundamental in achieving positive results.

Over the last two decades, there has been growing interest in Latin America for using public-private partnerships (PPPs) to catalyse rural development. This has come about largely in response to the failure of state and market-led models to reduce poverty amongst the region’s smallholders who today number around 14 million and account for the largest sector of poor people on the continent.   Public-private partnerships represent a ‘third-way’, one which seeks to capitalise on the expertise and investment capacity of the private sector, while at the same time driving forwards pro-poor development goals. Governments across the region have implemented two kinds of partnerships to build bridges between companies and farmers: PPPs for agribusiness development; and PPPs for improving services for rural smallholders. These arrangements have produced interesting results, both in terms of improving market conditions and boosting the livelihoods of the rural poor. This Brief begins by explaining the emergence of PPPs in Latin America, before exploring specific experiences to draw out common success factors and key lessons for policy makers and practitioners working in other regions of the world. 

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Key Lessons:

  • Public-private partnerships are an important tool for rural development because they combine the expertise and leverage of the private sector with public sector incentives to promote sustainable rural development and reduce poverty.
  • Four key elements to the success of PPPs are: i) the existence of a common interest between partners; ii) transparency and accountability in resource allocation; iii) a clear operational structure that facilitates information flows and decision making; and iv) independent monitoring and evaluation.
  • In order to achieve long-term sustainability of PPPs, the selection of a private partner should take into account its commitment to building capacities among smallholders and improving rural incomes.

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