III. REASONS TO ENTER INTO AN INTERSECTORAL PARTNERSHIP

Recent development trends have provided a strong foundation for innovative partnerships. Most developing countries have begun to liberalize their markets, reform state regimes to ensure some basic tenets of democracy, and take advantage of increased capacity on the part of civil society. While the three sectors are becoming more effective and efficient in achieving their sectoral goals, no one sector can solve every local or national issue. Collaboration and coordination among the sectors can lead to the production of some essential collective goods and services still not provided by individual sectors, and a more efficient use of resources in addressing a number of issues of local importance.

The ability of ISPs to address a wide range of particularly difficult issues is making the formation of ISPs an increasingly important development strategy. ISPs have demonstrated substantial success—often following poor results of one-sector strategies—in spurring economic development; building water, road, and other infrastructure systems; addressing environmental degradation; and in helping to provide health and education services.

Donors are particularly interested in this strategy as it often contributes to a reduction in the transaction costs and risks associated with alternative institutional arrangements. Donors can access and share an important resource—information—that contributes to the overall decline of these costs and risks. Donor organizations often provide resources and technical expertise that facilitate the partnership process. Finally, donors are particularly valued for their ability to engage in policy dialogue with other governments.

Benefits

By entering into an ISP, potential partners can create a win-win situation. The basic power of ISPs comes from their participative and multi-stakeholder nature. An ISP is based on the premise that all key stakeholders in a development issue should be mobilized to develop and implement plans to address the issue. The participative nature of ISPs means they can build greater commitment to address the development issue and enhance the chances of creating a sustainable solution. The multi-stakeholder aspect means ISPs are forums for participants to exchange their resources, combine their competencies and coordinate their activity in new ways. ISPs can, for example, combine the power of government to create laws, the resources of the market sector's system to produce goods and services, and the unusual ability of civil society to access volunteer energy or tap in-depth grassroots knowledge and expertise. Because ISPs combine such different perspectives and resources, they can also give rise to innovative approaches that address long-standing problems.

Although the differences between the sectors are the source of the strength of ISPs, they are also the source of particular challenges. Bringing together organizations with diverse goals, values and perspectives means there is plenty of ground for disputes and conflicts. Therefore, creating ISPs requires building structures, skills, and processes that can use the differences to encourage exchange and creativity.

Members of an ISP can benefit from partnering by being able to:

• Increase the scale of their activities
• Raise their credibility
• Take advantage of each partner's strengths
• Mobilize resources
• Reduce transaction costs and risks
• Address externalities
• Exchange technical or other forms of information
• Develop undefined opportunities, based on the understanding that collaboration among different, and frequently opposing, sectors creates new ideas and solutions to common problems
• Capitalize on the political advantage or power derived from coalition building
• Achieve a mutual goal that would be unattainable if each sector were working alone

Potential Results

Based on the assets that each sector brings to the table, ISPs can produce the following results:

• A new range of outcomes that would not have emerged without the ISP. That is, the different interests of the sectors should lead to "creative tensions" that foster innovation in product development and delivery, governance, and expression of local values.
• Transformation of partner's capacities. For example, the Orangi Pilot Project in Pakistan, an ISP formed to construct low-cost latrines and sewage systems, led to improvements in the local sanitation system and to new activities by the neighborhood associations that provided the labor for the construction.
• A better understanding of each sector's constraints. Without cross-sectoral information sharing, partners may misinterpret a real constraint for a lack of commitment or obstructionism. Some Philippine local government units, for example, have invited civil society actors to take part in their annual budget planning. Armed with a realistic understanding of budget limitations, these actors are then better prepared to collaborate with local governments in defining priority activities.
• Creation of bridges among different communities. Because ISPs tend to be highly diverse collaborations among people of different class, geographical, and racial backgrounds, a dialogue is initiated among groups with different values and aspirations.
• Address large-scale issues that no one sector has the resources and ability to manage alone and in which every sector has a stake.
• Provide the foundation for broader change. Through the creation of new structures and relationships, a sustainable mechanism can be put into place to help address issues that go beyond the original one.