Public/Private Alliances Transform Aid

By Natsios, Andrew S. | Stanford Social Innovation Review, Fall 2009 | Go to article overview

Public/Private Alliances Transform Aid


Natsios, Andrew S., Stanford Social Innovation Review


The dual goals of scalability and sustainability have eluded many development projects. In recent years, however, the United States Agency for International Development (USAID) has reached out to corporations, nonprofits, and even private citizens to build alliances that are making large-scale, long-term change. In this article, the former head of USAID describes the public-private partnership model that his agency forged, the successes that the model has won, and the struggles that it continues to face.

In 1994, 800,000 Rwandans were murdered in the last genocide of the 20th century. When Paul Kagame became president of Rwanda, the nation's economy was still in shambles, with few resources other than its people and its coffee crop. But Rwanda's coffee beans were of such poor quality and unappealing taste that they were sold at the lowest possible prices. Traders made most of the modest profits, leaving growers impoverished.

To make Rwanda's coffee crop more profitable, the United States Agency for International Development (USAID) and the Rwandan government organized an unusual alliance between coffee farmers and several international coffee companies, including Starbucks Corp. and Green Mountain Coffee Roasters Inc. The alliance trained the farmers to process specialty coffee beans that would fetch premium prices. USAID played a central role in linking the coffee farmers to U.S. coffee retailers, as well as in training farmers in how to grow and process the coffee to meet high specialty coffee standards. USAID also helped coffee farmers secure bank loans to buy or upgrade equipment.

By 2006, exports of Rwandan specialty coffee had grown to $8 million, and coffee farmers' per capita income had more than quadrupled, from $75 per year in 2001 to $400 per year in 2006. Starbucks and Green Mountain Coffee ranked Rwandan specialty coffee as the best of the best.

Like USAID in Rwanda, other donor government aid agencies are increasingly working with corporations and nongovernmental organizations (NGOs) to encourage economic development in poor countries. At least 10 bilateral aid agencies (that is, government agencies in a single country - such as USAID and the Department for International Development, the British government's aid agency that give aid to other countries) and multilateral aid agencies (that is, aid agencies - such as the World Bank and the United Nations Development Programme - that directfunds from several different governments and organizations to different countries) have established institutions to make diese cross-sector links.

USAID embarked on its own large-scale experiment in publicprivate partnerships with corporations, foundations, NGOs, churches, universities, and ethnic diasporas in May 2001. These private entities contribute their own financial resources, expertise, logistical capacity, and technologies. They are not USAID contractors. Instead, they are partners in a new form of alliance that may help solve two classic problems of foreign aid: How do we design development projects that thrive even after government funding ends? Andhow can we expand small yet successful projects to scale so that they can help millions of people?

Eight years later, with 680 alliances valued at $9 billion in combined resources, USAID has learned many valuable lessons about how government aid agencies can get the most out of their alliances with private sector partners. We found that we must not only remove barriers to cross-sector cooperation - including low risk tolerance, excessive bureaucracy, and narrow notions of possible partners but we must also create the right incentives for building alliances. As other government aid agencies increasingly rely on nontraditional partners to stimulate economies, alleviate poverty, preserve the environment, and protect human rights, they may learn much from USAlD's experiences.

GOVERNMENTS ENGAGE NEW ACTORS

Over the past 25 years, diree seismic shifts have encouraged government aid agencies to join forces with corporations and NGOs. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Public/Private Alliances Transform Aid
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.