Unlike reform processes in other areas, supporting a PSD agenda means enhancing capacity in both the public and private sectors. The nature of capacity development in the two sectors differs. Interventions aimed at the private sector need to focus on awareness-raising, which might include disseminating information on new opportunities and resources available to enterprises—such as microfinance for SMEs—in order to encourage private sector activity. Policies that will be implemented via government agencies—such as a land survey in support of a land titling program—need to incorporate training and capacity upgrading components as a matter of course.

# **Developing Partnerships between Public and Private Sectors**

Public-private dialogue and partnerships are a vital component of efforts to re-build trust and collaboration between the public and private sectors, and need to be initiated from the outset of post-conflict reconstruction. Business owners are better placed than governments or donors to know what improvements in the investment climate are needed. They can also contribute their own resources, such as time and research. Their involvement will both accelerate policy reform and ensure that it is on the right track.<sup>44</sup> By bringing the issues out into the open for public discussion, public-private dialogue also helps minimize back-room deals involving a select few.<sup>45</sup> In Cambodia, for example, bi-annual meetings of the Government–Private Sector Forum generate discussion on a range of investment climate issues. Cabinet level participation from the government side, including the chairmanship of the Prime Minister, means that decisions made in the Forum are binding. Dialogue is most effective when it focuses on economic reconstruction and investment climate improvement, especially the need for job creation, as this helps to avoid the risk of politicization.<sup>46</sup> Dialogue on how to share resources and build capacity is particularly important.

# **Box 8. Public-private partnership in Bosnia & Herzegovina: The ‘Bulldozer Initiative’**

In post-conflict Bosnia and Herzegovina, an innovative reform methodology relied on grassroots business participation to push forward a reform agenda. Using a bottom-up approach that relied on raising public awareness of weaknesses in the business environment, the initiative mobilized the local business community to “bulldoze” regulatory barriers to doing business by identifying concrete legislative changes and advocating for their adoption and implementation.

By emphasizing fast results, the initiative won the confidence of entrepreneurs who then established permanent grassroots reform committees. Reforms proposed by these committees spanned all sectors of the economy, including enterprise law, banking and finance, tax, exports, trade, labor, and the environment. Each proposal was evaluated by a group of lawyers and economists and subjected to a cost/benefit analysis, with industry experts were invited to comment on ideas before they were taken to the next stage.

_Source_ : Herzberg (2004).

> 44 Curtis 2006.

> 45 See DFID et al. 2006. The dialogue needs to bring in recognized representatives of the business community, avoiding any risk of cronyism.

> 46 Bannock Consulting 2005.

27