Sub-principle 5.A

Ensure that a private sector solution is the most appropriate way to reach those furthest behind


Why is it important?


When official development assistance is used to support development co-operation projects, it does so to trigger investments that businesses would not otherwise make, to make them happen more quickly, at a larger scale or to improve development outcomes. In short, public support for the involvement of the private sector in development co-operation projects is only warranted if it yields an added value. In some cases, market-based solutions might not be able to reach the intended beneficiaries such as the poorest and most vulnerable populations in a country. In these cases, there are often other ways to enrol the private sector in a partnership to find a comparative advantage.

Self-reflection questions
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  • What added value can you bring to a partnership over other actors’ development solutions to benefit vulnerable citizens and communities? Can you provide evidence of the financial and non-financial benefits?
  • Have you identified in which sectors, markets and areas of intervention your private sector solution might be best positioned to bring long-term development outcomes for those furthest behind?

Actions to consider
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  • Be honest about whether there is a valid business case, whether subsidies (public resources) are required, why public resources are needed and justified for businesses to invest. 
  • Participate only in those development projects where you can ensure that development outcomes are sustainable and in line with your envisioned business results.

Pitfalls to avoid
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  • Enrol in PSE projects without a clear vision of your company’s added value.


The case studies described in Private Water and the Urban Poor demonstrate that private firms can generate successful models by harnessing the dynamism of both the private sector and low-income urban communities. The two models presented share common elements of innovation: a multi-sector approach to service expansion and provision, including partnerships with local authorities; strong community involvement in option selection, design and operation; appropriate service levels to reduce costs; and flexibility in the type of service provided.

Musika is a platform to support private investment in the agricultural market in Zambia. It focuses on smallholder and emerging farmers using the Making Markets Work for the Poor approach. The platform has agreed boundaries between the private sector and public goods, mapping where there are current opportunities and what may change.

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