Private sector development

Private Sector Development (PSD) is a strategy for promoting economic growth and reducing poverty in developing countries by incorporating private industry and competitive markets into a country’s overall development framework.

More information about PSD and its role in economic development can be found in the World Bank Group’s 2002 policy note Private Sector Development Strategy.

Development agencies such as the World Bank see PSD as an important part of poverty reduction. Evidence shows that private sector activity in countries facilitates job creation and thus boosts growth. Additionally, it is said that the private sector can go along way in developing countries toward the provision of access to basic services, empowering the poor by improving quality and access to health services, education and infrastructure. Strategies and best practices for ensuring that private sector development is pro-poor is a popular topic for policy makers. In order for the benefits of PSD to be achieved, most believe that governments must ensure proper regulation and institutional frameworks. The World Bank Group has published a reading list on the role of the private sector in pro-poor infrastructure.