Impact Assessment

Evaluation of European Community Support to Private Sector Development in Third Countries, 2005

    This report presents the results of the evaluation of the European Community’s support to private sector development (PSD) in third countries over the period 1994-2003. It aims to contribute to improving the coherence of the Commission’s sectoral approach and also at enhancing coherence between PSD support objectives and the Commission’s other policy objectives.

    Methods for info gathering
    The evaluation was carried out in two separate phases. First, the Desk Phase involved an analysis of documents collected in Brussels, interviews with Commission officials and a questionnaire sent to a sample of 25 Delegations. Second, the Field and Synthesis Phase of the evaluation entailed testing the hypotheses proposed during the Desk Phase though five country studies. In addition, during that phase a survey was carried out to explore the views and understanding of Delegations on the PSD Thematic Network as well as to assess their needs in terms of support from HQ. The team integrated these new findings with those from the Desk Phase and analysed this information base to arrive at an overall assessment of EC support for private sector development in third countries.

    Summary of results
    The evaluation covered all aspects of PSD; in the Business Environment, it concluded that many EC business environment programmes have been successful, in large part due to their high relevance. However, while it is a key precondition for successful implementation of macrolevel programmes, strong political involvement of partner governments is not systematically ensured.

    That said, some EC practices have positively influenced government involvement, for example through minimising delays, consulting all relevant stakeholders, entering into joint implementation with other donors and proposing reforms at provincial rather than central level when applicable. Furthermore, support to intermediary organizations has been an effective way of influencing government policies.

    It recommended that interventions aiming to improve the business environment should be encouraged, as long as there is sufficient government commitment. This decision should involve an assessment of the level of government involvement and well as a maximization of involvement through several possible channels of action. Second, encourage support to intermediary organizations as a way of influencing private sector policies, by following a set of best practices.