Columbia International Affairs Online: Working Papers

CIAO DATE: 11/2009

Aid, Paris and the Private Sector: How to Square the Circle

Jørgen Estrup

October 2009

Danish Institute for International Studies

Abstract

Support for private sector development is an important item on the ODA budgets of most donor countries and recently, there has even been an upsurge in the weight given to ‘private sector led growth’. In this working paper, Jørgen Estrup, an independent senior adviser with comprehensive experience in aid programmes supporting the private sector in developing countries, provides an overview of recent trends in donor support to private sector development. The paper goes through the history of and rationale for support to the private sector, and it identifies a number of distinct approaches to the subject. Moreover, the paper discusses these approaches in the context of the Paris Declaration and notes a conspicuous lack of coherence between the approaches to private sector development and the principles of the Declaration.