Poverty reduction

Promoting Pro-Poor Growth: Private Sector Development



To help donors increase the impact of their private sector development programmes on poverty reduction the DAC has prepared Promoting Pro-poor Growth – Private Sector Development. This report includes guidance on six topics important for promoting pro-poor growth:


Both the pace and pattern of growth are critical for long term and sustainable poverty reduction. Private sector development is crucial for increasing the pace of growth. But the way the private sector develops also has a strong bearing on the pattern of growth, influencing whether growth is broad or narrowly based and whether it is more or less inclusive of the poor.

Developing country governments and development agencies consequently have a strong interest in fostering a policy and institutional environment that enables the private sector to flourish and to act as an effective driver of pro- poor growth.

Efforts should focus on how policies combine to provide incentives that shape private sector activity. These should help to bring about such pro-poor market outcomes as more and better jobs, higher incomes, better returns on goods sold and greater affordability of essential goods and services.

There is growing recognition that in pursuing a pro-poor agenda for private sector development what matters is the degree to which economic growth provides opportunities for the poor, and the extent to which poor men and women can take advantage of those opportunities. This emerging agenda is more holistic and broader than the previous agenda, which often focused mainly on supporting enterprises considered important for the poor.

Experience has shown some shortcomings with such interventions, which have sometimes created market distortions or not been sustainable as a result of attempts to “pick winners” or to use public sector agencies or donors to provide services.

This work is anchored in and builds on the analytical framework:

Accelerating Pro-Poor Growth through Support for Private Sector Development

The factors that matter for pro-poor growth and the processes needed to bring it about. There is a new, broader agenda for accelerating pro-poor growth through support for private sector development.

> POVNET Policy statement and overview of private sector development in Chinese (pdf, 770 kb)

Additional resources include:


Disclaimer: The opinions expressed in these reports do not necessarily reflect the official views of the OECD or the governments of its member countries.