Organisation-Environment Challenges in Developing Countries

Organisation-environment theories explain the dynamic relationships of the socio- technical systems or internal environment and the external environment in which the organisation is located (Khandwalla, 1988; Jaeger and Kanungo, 1990). In this study of PPPs, the strategy of the alliance can be interpreted in the context of the external environment that features development challenges, and the internal environment that presents other performance challenges. An attempt to study PPPs in developing countries requires consideration of the environment and, as noted by Kiggundu et al. (1983) “…each time the environment is involved, the theory developed for Western settings does not apply, because it assumes contingencies that may not be valid for developing countries” (p.91). These differences are largely cultural, economic and political (ibid.).

2.4.1.1 External Environment: Scarce Economic Resources in Developing Countries

The scarcity of economic resources is perhaps one of the main challenges for developing countries (Hardy 1990; Briguglio, 1995; Stiglitz, 1998) and this affects the ability of the PPP organisation to secure project financing (Yong, 2010). Hardy (1990) concurred that the stage of economic development renders such countries “…more vulnerable to cyclical fluctuations, recession, inflation and external debt” (p.83). Indeed, organisations in such contexts of scarce resources may be more pressured to justify their existence in terms of economic success and counteract legitimacy challenges, especially in the early stages of their establishment. PPP projects in developing countries differ from those of developed countries mainly in the ability of governments to repay the private sector over time (Yong, 2010). The issue of transparency and quality in decision-making is even more important in small, developing countries where organisations are more susceptible to the vagaries of

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economic, cultural and social environmental influences and the arbitrariness of individual action. In small countries, success is often attributed to individual actors and the evidence of organisational learning and institutionalisation is weaker than for more developed countries (Baird et al., 1994; Lane et al., 2001; Meyer, 2007).

2.4.1.2 External Environment: The Implications of Small Size

The issue of size is also a factor considered in this study and it may be argued that in small developing countries the problems of development are exacerbated by the size of the countries which render them more vulnerable to development pressures. A feature of small island states is their limited capacities both to produce and to consume as they cannot create monopolies and operate large-scale operations, they cannot develop substantial internal markets and they cannot raise large amounts of capital/finance on the home market (Bass, 1995). These factors often “…render the economies of these states very vulnerable to forces outside their control – a condition which sometimes threatens their economic viability. The GDP or GNP per capita of these states often conceals this reality” (Briguglio, 1995, p.1615). The economic vulnerability of small island developing states (SIDS) is demonstrated in their exposure to foreign economic conditions, remoteness and insularity, proneness to disasters and demographic changes, often caused by emigration patterns (Briguglio, 1995, p.2003). In some cases, SIDS do not necessarily have a relatively low GDP per capita and this conveys “…the impression of a relatively strong economy, even when, in reality, their economies are extremely delicate” (Briguglio, 1995, p.1624). In an attempt to present a broad overview of the problems of size within their geographic space, Douglas (2006) concluded that many of the problems of small island states are related to their “...insular geography and their fragile environmental and ecological characteristics” (p.76). The author goes on to explain the complexity of the environment of small island states that “...although spatially small, they nevertheless have characteristically uneven development within and across their island regions. They have complex and differentiated relationships within and between communities and island governments. These characteristic complexities give rise to resource management and governance issues” (ibid.).

Challenges faced in education due to size include the tendency for “…the relationships among various sub-groups in the population to…be characterised by strong personal

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ties” (Bacchus and Brock, 1987, p.6). This susceptibility to nepotism and patronage may often lead to maladministration and partiality in education (ibid.). In particular, small developing nations experience geographic isolation due to underdeveloped trade linkages that often result in their dependence on one or two countries for trade relations (Bass, 1995). This phenomenon, along with their various other dependencies, tends to militate against the development of external linkages and partnerships that are necessary for curriculum development as there are “…fewer people available than in larger countries to do a wider variety of educational work” (Brock, 1987, p.25).

2.4.1.3 Challenges of Development in the Commonwealth Caribbean

It is argued that development requires more than just economic models as it involves the transformation of society as a means and an end of the development process (Stiglitz, 1998). The Caribbean laments an “implementation gap” and an “…over- emphasis on economic considerations and the tendency to overlook political, administrative and socio-cultural factors” in development planning” (Ryan and Bissessar, 2002, p.319). The assumption that price can perform all the co-ordination in an economy is challenged in developing countries which do not possess “…a full set of markets…[and]…the appropriate infrastructure, human capital and institutions” (Stiglitz, 1998, p.17). This results in less clarity on the next stages of the development process and, as such, development strategies should no longer be understood as a ‘road map’ but should be presented as a process model that can be adapted with the “…transformation of institutions, the creation of new social capital and new capacities, in some cases to replace traditional institutions that will inevitably be weakened in the process of development” (Stiglitz, 1998, p.16).

2.4.1.4 Challenges in Participatory Models

Development strategies should necessarily include processes for participation and ownership and the involvement of outsiders cannot take the place of this local ownership (Stiglitz, 1998).

The partnership literature, including the UK literature on PPPs, therefore provides limited guidance on how the partnership should be structured for development impact. If development strategies are to acknowledge the historical context of the society

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(ibid.), it is clear that the development trajectory of the UK and other developed countries will be of limited value. In the Caribbean in particular, participation in development is affected by several factors including the fact that there is a less developed civic society participation in developing countries (Salamon and Anheier, 1997).

Caribbean literature provides some insights into the challenges faced in partnership initiatives. Efforts to introduce the NPM in small states of the Caribbean met with political and economic challenges (Brown, 2002). In another study of NPM implementation, it was found that “…the ethnic composition of the society and the way the governments operated were critical factors” in the implementation efforts across states” (Bissessar, 2002, p.514). The more ethnically homogenous societies allowed for a more democratic system of governance that “…allowed for co-operation and negotiation between the various governments and oppositions” (ibid.). Yet, in an attempt at private participation and collaboration in the social partnership in Barbados, it was found that even in such ‘homogeneous’ societies, the model of private participation was affected by the private sector’s “…capacity to make meaningful use of the opportunity in the interest of the private sector as a whole and in the wider national interest” (Brown, 2002). The social partnership model represents one of the most significant efforts at cross-sectoral co-operation in the Caribbean (CEPAL Naciones Unidas, 2010).

2.4.2 The Internal Environment: Defining the Purpose of the PPP Organisation