What’s So Different about Partnership for Growth?

“Can you help us PFG this country?” is not yet a common query heard throughout the U.S. government, but CGD had the opportunity to discover why “PFG-ing” a country could be the next phase in the evolution of U.S. development efforts. Last week, CGD hosted a panel on Partnership for Growth (PFG) with USG representatives and ambassadors from the four PFG partner countries – El Salvador, Ghana, the Philippines, and Tanzania.  The discussion sought to answer two central questions: what’s really new here and what’s the big deal?What is PFG?Partnership for Growth is an approach that embodies the principles of the Presidential Policy Directive on Global Development by trying to operationalize a whole-of-government approach. The administration selected four “emerging, emerging markets with skin in the game” as the initial PFG countries. After selection, each partner government and the USG undertook a joint constraints-to-growth analysis and developed joint country action plans to focus on the highest priority barriers to growth.  These plans will be implemented over a five-year period with rigorous monitoring and evaluation throughout PFG implementation.What Makes PFG Different?The Administration is championing the PFG model as a new way forward for USG development activities, but many of the hallmarks of PFG – a singular focus on economic growth, country ownership, rigorous M&E – are already established practice in agencies like the MCC and USAID.   Here’s what makes it (kind of) different:

• Interagency coordination. As Gayle Smith in her keynote noted, “dividing up development with different agencies wasn’t getting the results we wanted” so the PFG model explicitly seeks to draw on the strengths of multiple agencies. The MCC, State, USAID, USTR, Treasury, Commerce, and OPIC (just to name a few) are all at the table.  All of the panelists extolled the novel interagency process and its success thus far. Interagency coordination is no doubt a difficult feat (I recently heard coordination defined as an unnatural act between nonconsenting adults* – seems quite apt here) but stronger interagency coordination is not a compelling reason for a new model and certainly should not be the legacy of PFG.
• Data-driven prioritization. Unlike in some other USG development efforts, the selection of focus areas is driven by data and priorities rather than anecdotal evidence. A rigorous constraints-to-growth analysis, borrowing from work at Harvard by Ricardo Hausmann and Dani Rodrik, determines the one or two sectors that most impede broad-based economic growth. Ambassador Francisco Altschul of El Salvador noted that this process allowed space to make difficult decisions in a more open way and that this transparent, data-driven approach helped to build bridges and bring a normally wary private sector to the table.
• No new money. Discipline supposedly drives the PFG model, not resources, and this may well be the biggest difference of PFG. The lack of an attached check has, panelists claimed, already helped to change the nature of the dialogue on both sides. (But it should be noted that all four countries see increases in the FY2013 budget request.)

Potential Challenges for PFGDiscussion of the challenges currently facing both the partner countries and the USG as they implement this new approach was noticeably absent—perhaps because it is all still new. However, three potential pitfalls did arise during the panel.

• Complex M&E plans.  El Salvador is the furthest along in PFG implementation and as such is the only country to have an M&E plan.  For the two identified constraints to growth – insecurity and low tradeables productivity – there are 14 and 6 attached goals, respectively.  Each of these goals then has a number of indicators behind them (33 in total) and each indicator has an associated strategy. Can’t keep it straight? Me neither.  The M&E plan needs to be simple and clear.  (Though kudos for transparency.)
• More than investment roadshow PR? The PFG claims it will engage the private sector in a new way, but we didn’t really hear anything new. The Ambassadors seemed to just claim that PFG helped them promote the country to potential investors.
• Leadership & sustainability. Who’s in charge? It’s unclear who has final say and who will ultimately be responsible for demonstrating the results of the PFG approach. Without an institutional home, how will PFG last once Gayle Smith has moved on?

The verdict is still out on whether PFG will be the future of U.S. development efforts.  The panel offered areas where PFG has the chance to take risks and offer a new approach to development.  Let’s hope that the USG and four PFG partner countries take advantage of this model and capitalize on the opportunity to do things differently.

*This pithy definition courtesy of Rob Mosbacher at a recent Consensus for Development Reform event.