The Architecture of Private Public Dialogue:
Insights from OECD Countries’ Experiences
Nicolas Pinaud
International Workshop on Public Private Dialogue
February 1 & 2, 2006
Paris
OECD Development Centre
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Successful PPD in OECD countries
 Japan: the MITI and Japanese corporations until the early
90's
 France: the "Trente Glorieuses" (from the 50's to the 70's)
 Scandinavian neo-corporatist & “negotiated economies”
 Mexico: from 1987 onwards (Economic Pacts, COECE,
Economic Deregulation Council)
 Korea: the Park Chong Hee era & the Federation of Korean
Industry (FKI)
☞
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Issues
 What are the institutional prerequisites of a
successful and sustainable PPD?
 Is there a most appropriate institutional
architecture for PPD processes?
 How must PPD arrangements evolve over time to
accommodate changes?
 What lessons from OECD countries' experiences?
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The PPD Interaction:
Components
Institutional
Mechanisms
"Quality" of
PPD Interaction
Nature of PPD
Participants
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The PPD Interaction:
Objectives
Concrete decisions & Policy reforms
Institutional
Mechanisms
Strengthening of business sector
Durable trust between Business
& the State
"Quality" of
PPD Interaction
Nature of PPD
Participants
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The nature of PPD actors
 A developmental State
– Autonomy of the State and political elites / private interests & a
Vision for economic development
 France in the 50's – 60's: the "Keynesian modernizing State“ & “public
focal monopoly” (Meisel, 2004)
 Korea: "long Korean Confucian tradition of meritocratic civil service”
(Fields, 1997)
 Japan/MITI: "without doubt the greatest concentration of brainpower in
Japan" (Johnson, 1982)
And … the World Bank 1993 East Asian Miracles report.
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The nature of PPD actors
 A developmental State
– Autonomy of the State and political elites / private interests & a
Vision for economic development
– Proximity with the private sector: Korea, Japan / India
☞ Embedded Autonomy (Evans, 1995) = Connectedness without
Capture
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The nature of PPD actors
 An organised private sector and “strong” business associations
 Representativeness (voluntary vs. compulsory & State chartered
membership)
 Analytical capabilities & Ability to feed the process of policy-making
 In OECD industrialized countries: private sector think-tanks
 Also Mexico in the early 90’s (e.g. NAFTA negotiations, also the
Business Coordinating Council)
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The nature of PPD actors
 An organised private sector and “strong” business associations
 Representativeness (voluntary vs. compulsory & State chartered
membership)
 Analytical capabilities & Ability to feed the process of policy-making
 Capacity of sectoral private regulation and decision enforcement
 Willingness to engage in PPD (other channels of State – Biz interaction)
 Benefits expected by the BA (welfare maximising vs. rent-seeking)
☞ Complex strand of literature on the political economy of business
associations
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The Nature of PPD actors
Institutional
Mechanisms
Connectedness without Capture
Balance of power
"Quality" of
PPD Interaction
Developmental State
Organized private sector
Welfare-maximizing B.A.
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Nature of PPD
Participants
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PPD: Institutional Mechanisms
 The PPD “device”: Who?
Both a top-down & bottom-up process
 High level meetings
“Policy champions”, continuity in political leadership, political resolve and
commitment at top of State apparatus
 Mexico in the 90’s, Korea in the Park’s era.
 Permanent working groups at the technical level
... feeding into the policy-making process at the higher levels of
government – business interactions
 Japan & MITI; Mexico & the Economic Deregulation Council
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PPD: Institutional Mechanisms
 The PPD “device”: How?
– Consultative / Deliberative councils with functional authority over
certain policy areas
– Measurable objectives & targets, clear deadlines
– Selective benefits and ‘rewards’ (confidential information,
tenders, subsidies & tax allowances, etc.)
– Substantial contribution by each participant
 Mexico in the 90’s: NAFTA, struggle against inflation / Public
tenders, information on government’s policy orientations
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PPD: Institutional Mechanisms
 The PPD “device”: What for?
– Specific, limited, and concrete agenda
 Mexico in the 90’s: Productivity vs. NAFTA & Disinflation
– Timeliness of issues, i.e. associated with contextual
incentives (situation of crisis, economic imbalances,
strategic decisions to be made, etc.)
 e.g. need for reforms: New Zealand Business Round Table in
the 80’s
– Time-bound discussions
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Formal PPD and beyond
 State – Business interactions: a “portfolio”
approach (Schneider, 2005)
Formal PPD
State
Bureaucracy
&
Political
Personal Networks
Business
Lobbying Congress
Sector
Campaigns &Elections
Elites
Corruption
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Formal PPD and beyond
 Fruitful PPD often associated to informal State –
Business interactions.
– Same background (education, kinship bonds, sociological, etc)
– ‘Rub shoulders’ in social networks
– From civil service to corporate boardrooms & vice-versa
 Numerous examples in OECD countries:
 France: “Pantouflage” & “Grandes écoles”
 Japan : “Amakaduri” & “Todai-Yakkai-Zaikai”
 Korea: “Tuk Chae” & “Taegu-nothern Kyonsang” Mafia
 Mexico : « lunch regulation » & governmental participation (Fox
government)
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PPD: the Dynamics
 The very nature of PPD is unstable
Institutional
Mechanisms
"Quality" of
PPD Interaction
Nature of PPD
Participants
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PPD: the Dynamics
Risks
– Capture (Korea in the 90’s)
– Irrelevance
– Sidelining democracy (New
Zealand in the late 80’s and 90’s)
☞ Case for
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– Ad-hoc and time-bound
– Flexible (Mexico in the 90’s)
– Inclusive
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PPD in OECD Countries: Conclusions
Top down & Bottom-up
Measurable objectives
Clear timeline & Incentives
Institutional
Mechanisms
Concrete decisions & Policy reforms
Strengthening of the business sector
Durable trust between Business & the State
Concrete, timely & limited agenda
"Quality" of
PPD Interaction
Developmental State
Nature of PPD
Participants
Connectedness
without Capture
Balance of power
Organized private sector
Welfare-maximizing B.A.
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PPD in OECD Countries: Conclusions
 OECD experiences are no “textbook” patterns of
PPD!
 Imbalance of power: Korea, France
 Japanese bureaucracy: large pockets of inefficiencies
 Mexico: Developmental State ??? Pocket of efficiencies instead…
 Incestuous State – Business relationship: Korea and Japan,
France to a lesser extent
 Still, various combinations of these elements have
turned out to be a recipe for success
☞ Room for experiment, pragmatism and action
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