Many corporations operate in countries that lack the capabilities to deliver high quality public services. If they are prepared to help governments improve their performance they can create a shared gain as a public sector that performs well delivers benefits both to firms and to society as a whole.  Some corporations, particularly in the oil and gas sector, are taking a long term view and investing in the development of public sector capabilities. This includes the provision of advice to governments on contract law and the regulation of extractive industry operations, advice on strategic planning and public investments, advice on public revenue management, human resource management and knowledge retention and support for procurement.

The large pool of expertise and resources held by multinational corporations combined with the demands faced by many governments in developing countries creates a significant opportunity for a growth in the transfer of knowledge and improvement in key public

sector capabilities. The outcome of these investments is likely to be more durable and have greater positive knockon effects than many other CSR activities. Such investments are not philanthropic or charitable but carry an expected return for the company in terms of an improved operating environment. In principle, this should provide an incentive for companies to make this kind of investment. However, in practice, companies face a number of impediments: shareholder worries about diverted management attention, concerns about corporate reputation and legitimacy and resistance by operational managers. Nevertheless, an increasing number of key business leaders are raising important

questions about such investments. They are concerned about the effects of public sector failures on business activities and how corporations can help to reduce them. However, there is no empirical research that would inform corporate strategy or this type of investment decision.

Approach

OPI is facilitating the development of a practitioner research community (PRC) on corporate investments in public sector performance composed of senior corporate managers and academic researchers. It will work on the basis of meetings, research, services and an international ediscussion forum. It will analyse contemporary issues and build scenarios of possible futures in commodity and energy markets, consider the implications of recent research on the effects of public sector failure on business

activities and assemble case studies of private investment in public sector capabilities. Modest studies will fill knowledge gaps, pilot innovative study designs and develop hypotheses for further study. The forum will benefit business through the generation of systematic analysis and evidence and act a as a platform for strategy development. It will assist researchers by facilitating access to business for case study research.

Status: ready for funding

Related info: private sector contributions to public sector performance meeting series