Detailed discussion of selected cases
In this section, we will provide a more detailed discussion of selected cases. We compare a relatively effective, a moderately effective, and a relatively ineffective PPP of each identified type. We will initially focus on the relevance of the degree of institutionalization as defined earlier and then add other explanations if appropriate.
A typical case for a very effective service PPP in the health sector is the GAVI Alliance. This PPP is highly institutionalized (Schaferhoff 2008b): obligation is high and recipient countries have to comply with several technical and procedural rules if they want to obtain funding. If countries do not achieve the immunization targets or if cases of mismanagement are reported, there is the risk that the funding will not be continued. At the time of application, they must have already established an Interagency Coordination
Committee, in which bilateral and multilateral donors, NGOs, and the private sector are represented. The degree of precision is also high, although somewhat mixed: several rules are very precise, while others are not. GAVI Alliance funding and support are conditional on the development of substantive plans and the acceptance of performance goals. Delegation is also high: GAVI’s financing mechanism is performance based; countries must demonstrate that goals are being met and must also show progress toward sustainability. Country performance is externally monitored through a data-quality audit by external consultants, among them McKinsey. This supports our idea that the degree of institutionalization is crucial for an effective service PPP. GAVI is, however, also good in management and learning.
As discussed earlier, another case in point is the International AIDS Vaccine Initiative (IAVI), a PPP that had to become much more institutionalized when its focus changed from advocacy and knowledge dissemination to service provision. As they now had to take care of an increased resource management, they had to introduce legally binding Memoranda of Understanding with their partners and monitoring procedures (Schaferhoff 2008c).
In contrast, the now terminated health partnership Children’s Vaccine Initiative (CVI) lacked strong obligations for its members and precise rules and was hardly effective. The aim to establish a heat-stable polio vaccine could not be reached because their public partners, notably the World Health Organization (WHO), were not willing to commit themselves to purchase new developments by the pharmaceutical industry. Furthermore, process management was weak: CVI never managed to raise substantial funds and had no competences to mediate the resource conflict with the WHO, which wanted to maintain its influence in immunization activities. The low degree of institutionalization is puzzling, but could reflect “world-time,” as CVI was already established in 1990, when PPPs were a relatively new phenomenon and the partners were reluctant to engage in binding obligations (Schaferhoff 2008a).
A typical case for a moderately effective standard-setting PPP in providing CSR norms is the Common Code for the Coffee Community (4C), whose degree of institutionalization is high. Obligation can be ranked as high: in order to become a member of the code, companies have to submit a selfassessment of compliance with the code (Kaan 2007a). On the basis of this report, a work plan is drafted, which determines the obligation of the company. The performance is reevaluated after two years and, if successful, every four years thereafter. The code employs conditionality, at least for the group of producers; moreover, if they fulfill the requirements of the code they increase their chance to contract with the producers that are 4C members. Precision is also high: rules are precisely operationalized, and measurement instruments are provided for each indicator (4-C Secretariat 2004, 14-18). The level of delegation is high as well: self-assessments about performance are evaluated externally. For standard-setting PPP, we observe that, apart from the degree of institutionalization, the level of participation is crucial for their effectiveness. Participation in 4C is fairly high: the first two years were used to involve all relevant stakeholders in the creation of the code (Kaan 2007a). While the multistakeholder process has been criticized for not adequately presenting the small farmers (Hamm 2004, 22-23), the number of representatives increased significantly during the norm-setting process. Today, 4C conducts stakeholder fora in several producer countries.
Similarly, the relatively successful Social Accountability (SA) 8000 has a high degree of institutionalization, consisting of high degrees of obligation, precision, and delegation. While SA 8000 is a voluntary standard, companies still lose their certificate if they do not comply with the standard and its rules (Kaan 2008a). Accordingly, we rank obligation as high. The degree of precision is also high: the provisions are modeled along the ISO’s standards and provide clear criteria for the fulfillment of any requirement. The auditors consider SA 8000 to provide a consistent system of rules (DeRuisseau 2002, 229). The degree of delegation is high: companies have to commission an external auditor, mostly firms specialized in social rights or firms involved in ISO monitoring. Once a company has been successfully audited, it commits to allow semiannual inspections over the course of the next three years. If inspectors detect instances of noncompliance, they are recorded and used to design a remediation plan (DeRuisseau 2002, 228). Social Accountability International, which developed the standard and administers its functioning, has outsourced the accreditation to auditors, that is, they have delegated this function to the independent Social Accountability Accreditation Services. The inclusion of stakeholders is quite good (and coded as medium); the ownership of companies, NGOs, trade unions, and participating public agencies is seen as one of the major success factors although bringing in the voices of worker’s representatives from the south failed.
In contrast to these partnerships, the World Committee on Tourism Ethics (WCTE) is a rather ineffective standard setting PPP. The main addressee of the code, the private sector, has rarely heard about it (Kaan 2007b). It has a very low degree of institutionalization. The underlying code is not legally binding and the broad principles for sustainable tourism are imprecise. Although dispute settlement competences were agreed upon, delegation is low, because the right to sue requires a unanimous decision by both parties. Furthermore, WCTE also scores low with regard to process management, learning, capacity building, and inclusion.
A typical case for a relatively effective knowledge-transfer PPP is the Global Network on Energy for Sustainable Development (GNESD). GNESD is reasonably effective, although it does not display a high degree of institutionalization. There are two reasons for that: first, it may be due to the fact that the interests of partners largely converge, and second, the task at hand—the exchange of mainly immaterial resources—does not require an elaborate institutional structure. The efficient facilitation of communication and exchange—a feature of its process management—is seen by all partners as its decisive asset (Campe 2008b).
When measured against its ambitious goals, Global Compact (GC) had been only moderately effective during the first years of its existence (1999 until 2006). On purpose and against much criticism, the degree of institutionalization had been kept at a low level in the beginning: “Critics wish it were something that it is not: a regulatory arrangement, specifically a legally binding code of conduct with explicit performance criteria and independent monitoring and enforcement of company compliance” (Ruggie 2001, 372). Obligation is rated medium; while the principles which stem from several U.N. conventions and soft law are binding for participating companies, they could choose to report on only one of the ten principles in their progress report—that is, there was no unconditional obligation to report on all principles. At first, there was no penalty, such as a delisting or exclusion, for noncompliance with the reporting procedure. Moreover, precise secondary rules concerning the communication of progress (COP) were predominantly lacking. This has recently changed; we thus rate precision as medium now. The same applies to the degree of delegation. The COPs are now posted on Global Compact’s website— mainly with the intent to promote learning. This step, however, also brings in some degree of social control, as a company is now marked as “noncommunicating” or “inactive” in the participant database of the Global Compact website if it fails to deliver the COP on time. Also obligations have been tightened: reports have to be handed in annually and a company will be excluded if it fails to comply with this requirement three times. All of these measures improve compliance. One could argue that recently—in contrast to Ruggie’s statement in 2001—the nature of Global Compact has evolved to some extent in the direction of a standard-setting PPP.
Virtually no output is produced by the International Alliance Against Hunger (IAAH) — a very low institutionalized knowledge-transfer partnership—founded to advocate efforts for the eradication of hunger worldwide. Tasks and rules remain ambivalent; it is the task of the national stakeholders to come up with ideas and projects. Due to a lack of resources, process management is hardly possible and the IAAH does not even provide tools for the otherwise successful national twinning projects against hunger.