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«No. 86 – January 2016 How to assess CSO-business partnerships for development Bruce Byiers, Francesca Guadagno1, Karim Karaki2 Key messages The ...»

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...but strategic partnerships potentially bring more member benefits Besides engendering stronger knowledge and spillovers effects, on paper the potential to align and achieve social and commercial objectives appears higher through strategic partnerships. These are considered more likely to be financially sustainable and more stable than philanthropic partnerships (Luzzi, 2012) that rely on continuous willing funders.

Yet, empirical evidence proving that strategic partnerships developmental impacts are higher than philanthropic partnerships is lacking, in part due to the focus of case studies on one or the other type of partnership. An analysis of ten CSO-business partnerships in India, Brazil, and South Africa, concludes that strategic partnerships “were no more productive than resource-based partnerships and sometimes were less so. The development impacts are not insignificant, but neither are they highly impressive in comparison to other kinds of collaborative strategies or the aspirations of many development CSOs for ending poverty and social injustice” (Ashman, 2001, p. 1110). Much depends on the ability to measure impact, a common problem for public or partnership development projects alike, and the ability to find a counterfactual - the ‘compared to what’ issue.

Although it seems reasonable to assume that strategic partnerships benefit more for partners and engender more developmental impacts than philanthropic partnerships, further empirical research is needed to confirm this hypothesis.

In CSO-business partnerships, the private sector tends to dominate...

Designing governance structures to govern the distribution of decision-making power is “a hugely important challenge in partnering” (Tennyson et al., 2008, p. 18) and can impact on the effectiveness of CSObusiness partnerships. By governance structures, we mean the legal structures and rules set out regarding the way the partnerships is organised and run, and how decisions are made.

A ‘balanced’ governance structure would help ensure, for example, that consumer’s rights are guarded in the case of marketing-related partnerships, or the fair and appropriate inclusion of smallholder producers from developing countries in production-oriented partnerships. In both cases, governance structures can help maximise the developmental impact of the partnerships.

However, as evidenced by the interviews of firms and government representatives conducted by Kolk et al.

(2008), “the government should accept that corporate interests will always be leading in a [CSO-business] partnership” (ibid., p. 268). Private sector partners tend to dominate partnerships (Ashman, 2001) for two main reasons: on the one hand businesses are often those bringing financial resources into the partnerships; and on the other hand their bargaining power is generally greater - large MNCs are able to exert pressure on smaller partners in developing countries.

In contrast, governance structures may engender power imbalances in favour of a particular partner who can dominate decision-making processes. Although in the short-term such government structures might benefit to the private sector, they may also undermine the overall sustainability of the project causing a lose-lose situation (Ashman, 2001).

So more research is needed to uncover the dynamics and impacts of governance structures on CSObusiness partnerships. Besides, unbalanced governance structures are a potential area where international donors could intervene and help partners to re-balance the governance structure of CSO-business partnerships.

...however, partnerships with shared control yield greater developmental benefits.

As evoked above, governance structures and particularly shared control of the partnership can greatly contribute to partnership’s effectiveness, both in terms of sustainability and developmental impacts.

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The literature identifies the following elements that contribute to more balanced governance structures

within partnership:

Shared control is more likely to happen in partnerships based on a high degree of • institutionalisation/formalisation. Formal agreements including the role and responsibilities of partnerships’ members provide greater transparency, and limit the extent to which actors can leverage their resources to increase influence over the partnership (Ashman, 2001; Beisheim and Liese 2011). By ensuring that communications, decision making processes, and evaluations are open and transparent, weaker members are able to participate according to what has been agreed.

A critical factor associated with (un)balanced governance structures is the perception of • partnership’s actors on resources - where financial resources are considered the most valuable.

Awareness about the non-financial contribution of civil society partners, the existence of complementarities and synergies, and the opportunities for joint learning may equally need explicitly acknowledged and promoted. This would in turn increase the chances of balancing the partnerships’ governance structures, and achieving the objectives of the partnership (Ashman, 2001).

Governance structures, which (i) define how the partnerships is set and managed (e.g. partners' motivations; how roles and responsibilities are divided); and (ii) reflect the way capacity and influence are distributed within the partnership, are to date a "terra incognita".

More research is therefore needed, and better links between governance and partnerships’ effectiveness and developmental impacts should be established. Uncovering governance mechanisms will therefore be key to highlight effectiveness factors/criteria of partnerships.

2.3. The importance of the context Beyond the four partnership dimensions described above, the way a partnership functions and its impact will fundamentally depend on the underlying context into which a partnership attempts to grow. This underlines the importance of taking account of the structural and institutional context in which CSObusiness partnership takes place, with different interests and incentives around the project having a potentially strong influence on project success. From a CSO-business partnership perspective, learning and building on “local institutional and governance structures” (Pattberg and Widerberg, 2014) therefore seems to be crucial when delivering common goods.

Further, the relations between the institutional context and the CSO-business partnership functions in a two-ways direction. If the institutional context affects the partnership and its outcomes, the CSO-business partnership can also influence institutions, the most obvious example being when partnerships set up new industrial standards.

Yet this relationship is clearly missing from the current literature, where limited research has taken into account the institutional and political context in their analysis. In order to link practice to policy, and to provide sets of concrete recommendations to build effective CSO-business partnership, including the institutional context should be seen as prerequisite.

3. Analysing CSO-business partnerships

3.1. Analytical framework As previously mentioned, this paper aims to summarise the key aspects regarding effective CSO-business

partnership processes in order to address the following gaps found in the literature:

1. Partnership formation, initiation and management processes have not been sufficiently addressed in the literature,

2. Governance structures including partnership power balance has largely been overlooked in the context of CSO-business partnerships; and

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3. The reciprocal influence between the broader institutional context and the partnerships has rarely been taken into account in CSO-business partnership’s analysis.

A comprehensive analysis, linking these different aspects will help uncovering some of the mechanisms affecting the effectiveness of CSO-business partnerships.

Building on the above discussion, we propose the following analytical framework to study partnership characteristics relating to the four dimensions of core business, degree of engagement, nature of activities, and governance that emerge as important are in the process of establishing and maintaining effective partnership; and how the origins and external context impact CSO-business partnerships and ultimately their effectiveness.

Figure 1 - An analytical framework for CSO-business partnerships Source: Authors’ own compilation This analytical framework is based on the following reasoning: CSO-business partnerships are formed, initiated and managed based on the interests and objectives of the individual partners around an identified need. These in turn define the relation of the partnership with the partner’s' core business activities and the subsequent interaction between partners: the more their interest and objectives are integrated within the partnership, and the more strategic the partnership becomes. The three other dimensions characterising partnerships, i.e. the degree of engagement, the type of activities involved within the partnership, and the governance structure adapt accordingly, affecting the effectiveness of the partnership.

CSO-business partnerships are embedded in an external context, which offers a set of opportunities and constraints. Taking these into account allows for a better understanding of (i) their impact on partnership’s origins or raison d’être; and (ii) how partnerships are then able to then adjust to the changing context and exploit opportunities and mitigate challenges. Their capacity to adapt also contributes to the overall effectiveness of the partnership.

The assumption underlying the analytical framework presented in Figure 1 is that by studying the partnership development process, and linking it with the evolving dimensions of CSO-business partnerships, we will be able to reveal some of the key aspects that contribute to its effectiveness.

Particular attention will be paid to governance structures and aspects such as decision-making process, and partnership structure.

www.ecdpm.org/bn86 How to assess CSO-business partnerships for development Qualitative approach In order to tackle the complexities inherent in the above discussion, analysis necessarily becomes more qualitative in nature. When addressing CSO-business partnerships processes, there is an increasing demand for qualitative approaches that facilitate the research process of exploring and discovering new aspects of the field (Gartner & Birley, 2002).

A second argument for adopting a qualitative research method is the desire to explain the reality of CSObusiness partnerships and analyse them as being part of, rather than isolated from, their environment (Lowder, 2009). To do so requires a deep understanding and analysis of their experiences, which can be obtained by a qualitative research method, allowing gathering rich and in- depth data, and capturing meanings and codes that would not appear by using quantitative researches.

A case study approach allows an exploratory investigation, providing opportunities to separate a complex set of factors and relationships, though in one or a very limited number of occasions (Easton, 2010).

3.2. A political economy approach to partnerships The analysis of case-studies can be structured around a combination of five political economy lenses, as described by Byiers, Vanheukelom and Kingombe (2015), and the four dimensions discussed above. This leads us to propose six areas for analysis, linking underlying issues of structural factors, institutional incentives and actors interests with the partnership dimensions discussed above. Underlying each is a discussion of partner and other actor interests and incentives, such as beneficiaries and competing firms or organisations.

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Type of Whether a philanthropic or Balance of development/commercial goals, alignment with core partnerships strategic partnership business, CSR etc.

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While these different areas are not mutually exclusive, semi-structured interviews along these lines are intended to provide both a useful structure for discussion and analysis, but also for systematising information relating to the partnerships under analysis in order to draw lessons for policy-makers.

Clearly such an approach can be applied to a range of different types of partnerships across sectors. This includes economic sectors, but also social or other sectors where CSO-business partnerships can play a role. This approach allows comparisons of strategic CSO-business partnerships within and between sectors, and can help uncover further insights about (i) how partnership characteristics affect the establishment and management of effective CSO-business partnerships in different sectors, and (ii) the role of donors in fostering and facilitating effective CSO-business partnerships.

www.ecdpm.org/bn86 How to assess CSO-business partnerships for development Studying different sectors allows exploration of whether CSO-business partnerships can equally well exist in different sectors. This can also help understanding the interrelated macro/meso drivers and challenges explaining why CSO-business partnerships do (not) engage with different sectors.

Finally, selecting partnerships that combine a range of stages of development would seem advisable in order to gather insightful information. Members with experience have generally accumulated more knowledge, capabilities and lessons learnt than their novice counterparts, while partnerships in progress can also reveal important insights. Furthermore strategic CSO-business partnerships are long-term based, and demands time to get started and work.

4. Conclusions Strategic partnerships are increasingly attracting attention as they bring innovative and sometimes impactful solutions to economic social or political issues. This will increasingly be so, with the adoption of the recent Sustainable Development Goals, to be met by 2030.

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