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 PSE, it should do so to trigger investments that businesses would not otherwise make, to make them happen more quickly, at a wider scale and with better development outcomes. It should also ensure the climate agenda is upheld and intentionality when it comes to leaving no one behind. In short, public support should be additional to what would have happened anyway. In some cases, market-based solutions might not be able to reach the intended beneficiaries. Trade unions have a role in monitoring and campaigning so that the project does no harm, the intended beneficiaries are reached, the climate agenda is upheld and official development assistance is used effectively by all donors.

Self-reflection questions
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  • What advantages and risks, especially to beneficiaries and workers, does a private sector solution carry in a given project? Has the project description answered this question?
  • Does the project include a theory of change that explicitly states the development challenge trying to be addressed and how the involvement of the private sector will benefit those furthest behind?
  • Does the project examine alternative solutions to the development challenge from actors other than the private sector? 
  • Does the project include an ex ante additionality assessment that specifically highlights how the project will meet the needs of those furthest behind? Are there mechanisms in place to ensure course correction?

Actions to consider
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  • If you are involved in project implementation, ensure that the project can demonstrate the economic, social and environmental impact and contribution to economic growth and wealth creation for those segments of society that are most affected by poverty.
  • Ensure public and private accountability vis-à-vis the expected development results of projects involving the private sector, based on agreed rationale at the policy and project level.
  • Demand explicit proof of additionality of projects and include a “public sector comparator” (whereby the cost and benefit of alternative public solutions, including traditional public procurement, would be assessed).
  • Participate in additionality assessments to identify the added value of private sector modalities and solutions. 
  • Ensure business models are inclusive and sustainable and uphold labour rights. 
  • Ensure that formalising the informal economy is a key part of any project focusing on those furthest behind.

Pitfalls to avoid
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  • Limit your engagement on monitoring the quantity and quality of official development assistance provided to private sector instruments and limit the analysis to if and how they could potentially reach those left behind.
  • Reduce the pressure of campaigning for ensuring rights and the rule of law are respected and social dialogue is upheld. 


In Argentina, formalisation of the informal economy and social, economic and political inclusion of all has been promoted through collective bargaining. A review of the collective bargaining negotiations held between 2011 and 2017 revealed that 33 agreements had included some reference to the informal economy, and more specifically to undeclared work. Examples of the types of clauses included in these agreements were general provisions on promoting the regularisation of employment relationships, discouraging evasive practices and underlining the need to join forces to eradicate informal employment. Such clauses were negotiated in sectors such as agriculture, manufacturing and business services.

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