The Role of the U.S. Government in Promoting Private Sector Development Solutions

Editor’s Note: This brief is part of the 2013 Brookings Blum Roundtable Policy Briefs, which details the role of the private sector in the post-2015 development agenda. Read the full policy brief here.


A series of seismic changes are fundamentally altering
how we can best think about the relationship between
public and private flows of funds targeted at
promoting development. This shift is reflected in the
policies of the Obama administration, yet U.S. assistance
programs have not sufficiently evolved to take
advantage of the new development landscape. Most
members of the development community, including
those in the private sector, still tend to behave as if
those firms and nonprofit organizations that are responsible
for the 87 percent of private flows to development
need to figure out how to work with the
13 percent of U.S. government flows, rather than the
other way around. A new mindset should focus on
where U.S. official development assistance uniquely
adds value. This is likely to be where official U.S. assistance
can complement other, larger private flows. U.S.
assistance will need to both effectively partner with
the private sector on joint development initiatives in
agreed-upon areas and also serve as a constructive
force in shaping a more enabling policy environment
that ultimately draws in more private capital. The
former may include sharing development know-how
and good practice with private sector partners. The
latter may include investing in infrastructure, market
making and strengthening institutions.