- A high level of trust between business and government is essential for effective regulatory reform that drives trade, economic development and progress on the UN Sustainable Development Goals.
- The Global Alliance for Trade Facilitation studied the development of trust between public and private partners during a recent trade facilitation project in Colombia.
- The Alliance's research highlighted four key success factors to building trust in public-private partnerships.
Regulation can sometimes feel like a stand-off, with government and business often finding themselves in intense, if not outright adversarial, relationships. The former has a responsibility to protect its citizens, while business seeks to deliver goods and services to customers as efficiently as possible. This tension can lead to mistrust, making regulatory reform an uphill battle.
When introduced as equals and given a chance to understand each other better as they pursue shared goals, however, the public and private sectors can grow to appreciate each other. This can have ripple effects beyond a specific regulatory issue.
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This has been borne out by recent research by the Global Alliance for Trade Facilitation in Colombia. It shows public-private partnership for regulatory reform can be a platform for growing trust between government and business, rather than an arena for battle. These findings have implications for the important role that public-private partnerships can play in advancing systemic change.
The Alliance brings together governments and businesses in developing and least-developed countries to design and implement trade facilitation projects in support of the World Trade Organization's Trade Facilitation Agreement. It works with the public and private sectors as equal partners to identify bottlenecks at borders and develop targeted solutions. The Alliance seeks to increase the coordination, knowledge-sharing and trust between government agencies and businesses. This not only ensures the success and sustainability of the project, but is a valuable outcome in itself.
For the Colombia study, the Alliance worked with academics from the University of Queensland, Australia to measure how trust was built between public and private partners involved in a trade facilitation reform project. When Colombian public and private sector representatives were surveyed afterwards, both groups indicated a remarkable and significant improvement in trust over the course of the project.
Many international and development organizations have at their core a mission to drive public-private partnerships. The World Economic Forum, in particular, fosters well-known public-private initiatives such as Gavi, the Vaccine Alliance, as well as the Global Alliance for Trade Facilitation. These initiatives rely on the collaboration and commitment of the public and private sectors to achieve the lofty goals of vaccines for all and efficient, modern processes at borders, respectively. The success of such initiatives are often based on founding and operational partners sharing a high level of trust.
There is substantial research focused on trust between individuals and institutions, but the understanding of what drives trust between business and government remains limited. The trust case study in Colombia revealed that enhanced communication and partnership over the project lifespan increased trust among more than two-thirds of survey respondents from the public and private sectors.
The study also uncovered best practices on how to build and measure trust in public-private partnerships. Here are four factors that allowed trust to grow between business and government in the context of this trade facilitation project:
1) Create a space for dialogue
Businesses and Customs Administration - the primary government stakeholder in the project - needed forums to engage on major shared challenges and jointly agree on meaningful solutions. The Alliance’s public-private project working group, trainings, and workshops were vital to providing such a space in Colombia.
2) Deliver concrete achievements
The main players must build on dialogue by taking action. Setting milestones – and meeting them – is a major indicator of trustworthiness because it proves competence to reach common goals. The Alliance’s project in Colombia allowed both public and private parties to set forth a path to reform and enabled the sectors to achieve joint success.
3) Establish committed leadership
A change in the Customs Administration towards a customer service mindset was crucial to opening a space for dialogue and a collaborative working environment in Colombia. Leadership from both sides overtly expressed their intention to work with the other and embodied this commitment. The project provided a venue for leadership to collaborate with one another.
4) Involve a neutral third party
Many of those involved said the presence of the Alliance project lead, serving as a well-respected and neutral third party to facilitate the project and build trust, was central to its success. The significance of the Alliance’s role is reflected in the government’s willingness to work on a third project together. The Alliance has also been granted an honorary role in the Colombian National Trade Facilitation Committee, a public-private body that advances trade reform.
Trust beyond borders
Achieving the UN Sustainable Development Goals will require public-private partnership at great scale. As previous Agenda authors have noted, trust is the critical building block in any such collaboration. The learnings from the trust study in Colombia can be applied to build the level of public-private trust necessary to achieve regulatory reform in other projects relating to the economy, the environment, and more.
In areas where business and government relations may be strained or even broken, this study has shown that it is possible to mend these bridges. Ultimately, reform in contentious areas and tough contexts that require public-private collaboration is possible when trust can be built.
What is the World Economic Forum doing on trade facilitation?
The Global Alliance for Trade Facilitation is a collaboration of international organisations, governments and businesses led by the Center for International Private Enterprise, the International Chamber of Commerce and the World Economic Forum, in cooperation with Gesellschaft für Internationale Zusammenarbeit.
It aims to help governments in developing and least developed countries implement the World Trade Organization’s Trade Facilitation Agreement by bringing together governments and businesses to identify opportunities to address delays and unnecessary red-tape at borders.
For example, in Colombia, the Alliance worked with the National Food and Drug Surveillance Institute and business to introduce a risk management system that can facilitate trade while protecting public health, cutting the average rate of physical inspections of food and beverages by 30% and delivering $8.8 million in savings for importers in the first 18 months of operation.