A key disruption currently occurring in social contracts in countries around the world is the political and social roles being played by multinationals, private companies, philanthropic institutions, technological companies and start-ups in developing and providing public goods and services — traditionally the ambit of governments. Instances of private intervention are increasing, with participation evident in traditional areas of state monopolies, in both acceptable fields such as health and education, and controversial ones such as law and order, use of force, and identification systems. The debate on the extent of private participation covers not only public goods within a country but also global goods that transcend boundaries: clean environment, knowledge, peace and security, and health, among others.

Relying on the private sector to produce and manage goods and services in the larger public interest is inevitable. Indeed, the total value of public-private partnership projects in low and middle-income countries more than doubled between 2005 and 2010 alone. This fragmentation is necessary because of the need to bridge capacity (“last mile” connectivity in India, for instance) and efficiency gaps of existing state mechanisms, and to engage in spaces where government institutions are insufficient. As Sanjeev Bhikchandani said during his intervention on the Indian experience with privatisation in the space of public goods, “The reality is that in a country of 1.2 or 1.3 billion people, public goods are often very scarce if they are being run by the government.” Additionally, globalisation has allowed greater reach to multinationals and private institutions as they seek materials and markets, as well as power and authority within a system to influence outcomes favourable to their interests. In this process, the “social licence to operate” — being a good neighbour in a community — through the facilitation of public services becomes imperative, as Mabel Brodrick-Okereke noted while discussing the case study of Niger Delta region, where many oil companies operate.

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Instances of private intervention are increasing, with participation evident in traditional areas of state monopolies, in both acceptable fields such as health and education, and controversial ones such as law and order, use of force, and identification systems.

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This increase in private participation may not necessarily come at the expense of a shrinking state. Data indicates an (absolute) increase in public spending, sustained in low-income countries because of attention on public health and education programmes. Political inclination and preferences will dictate where the line is drawn. For instance, Hans-Christian Hagman mentioned the ongoing debate in Sweden regarding quality and the cap on private profit in public education and health. Globally, there is an ongoing conversation about the United States retreating from its traditional role as the predominant provider of global public goods. Many are anticipating that China will fill in the gap, particularly in the field of technology, e.g., green technology. Indeed, Beijing recognises its Belt and Road Initiative, now in its fifth year, as a global public good that is reinforcing globalisation and providing regionally beneficial goods such as physical, social and digital infrastructure.

Furthermore, despite increased private participation, government-level engagement will remain critical in the space of public goods. The market can — and does — fail, and it may not be best situated to deliver goods optimally. Thus, a strong state role is necessary in the continued provision of key public goods, regulation and quality control. Sandhya Venkateswaran outlined a quick metric to define the role of the private sector: private players are optimal where both measurability of outcome and social benefit is high, but where measurability is low and social benefit is high, the state must play a strong role in financing and provision.

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The market can — and does — fail, and it may not be best situated to deliver goods optimally. Thus, a strong state role is necessary in the continued provision of key public goods, regulation and quality control.

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Illustrative of this debate is the phenomenon of data-driven innovation. Knowledge is a global public good, which we characterise as data, “the new oil” and “the currency of the future.” Given the central role data plays in anything and everything digital, it is the “most important element of tomorrow’s power,” in Hagman’s words. Innovation and provision of technological products, which are primarily private goods activity trackers, smartphones — can no longer be restricted to the traditional buyer–seller relationship. This is because the unit of interaction is “data,” which is subsequently collected and organised, used, purchased and sold. Moreover, while the digital space is a commons, it is firmly entrenched in the ambit of private entities, e.g., tech companies. This necessarily calls for public–private engagement for the effective use of data. For instance, urban mobility data that is collected by private transportation companies, in the hands of policymakers, could lead to better city planning. Tarek Elabbady, in his intervention, explained how multinationals can become involved with governments — the only ones with the power to aggregate data across sectors and borders — to ensure effective use of data. Building infrastructure, providing processing services such as edge computing, and ensuring inclusivity are ways in which private entities can get involved.

• Development
• Economics and Finance
• America
• Bhutan
• The Pacific
• East and Southeast Asia
• East Asia
• global public goods
• Globalisation
• Raisina 2018

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