Issue

While public-private action plans are designed to boost the resilience of global supply chain in anticipation of a crisis, strategic governance initiatives are expected to mitigate the impact of crises that are already ongoing. Strategic governance takes the form of collaborative efforts in which private actors opt into additional self-regulatory measures while receiving support and guidance from public bodies such as international organizations or national regulatory agencies. When carefully designed, public-private strategic governance generates a win-win situation. Public actors are able to better monitor the resiliency of critical supply chains and guarantee good conditions for the supply of essential goods and services on the market. Private actors are offered help and guidance with the implementation of their risk-management strategies and are able to reduce financial losses and avoid material disruptions. Overall, strategic governance allows for the synergy between relief measures by governments and risk management strategies by firms.

The COVID-19 pandemic has been a telling illustration of the potential value of public-private partnerships when it comes to crisis management. Overall, countries where the public-private dialogue and coordination has been the strongest were also the countries that performed the best when it comes to reacting efficiently and rapidly to the COVID-19 pandemic. Many governments have implemented measures in close co-operation with the private sector. To illustrate, the operation ‘Warp Speed’ in the United States has been an important contributor in the early development of vaccines and the success of the American vaccination campaign. Other notable examples include the launch of the Economic Watch Committee by the Moroccan government in partnership with private actors to anticipate and mitigate the impacts of the crisis on the national economy. Through public-private dialogues, information exchange has been facilitated and regulatory cooperation between both sectors has been promoted to help firms better protect themselves against low-probability high-impact disasters like the pandemic.

Finding the best way for governments and the private sector to co-operate may be challenging, especially when considering the international nature of supply chains. But past experiences, amongst which the pandemic, have demonstrated the need for more cooperation between private sector actors and other stakeholders, principally within the public sector, to better tackle the existing policy impediments to the fluid operation of critical supply chains. Some policy actions to achieve this include the following.

Policy action

• Engage with the private sector and private stakeholders to address disruptions and shortages in the provision of essential products.
• Establish platforms to share information and promote public-private dialogue during crises.
• Communicate government objectives in a clear manner to address supply chain disruptions and integrate in public policy objectives existing private risk management strategies.
• Re-assess public risk management strategies based on feedback from the private sector.

Source: Adapted from Figure 5.1, WTO (2013), Supply chain perspectives and issues: A literature review, Fung Global Institute and WTO Publications.

Related tools & publications

• WTO (2013), “Supply chain perspectives and issues: A literature Review”, Fung Global Institute and WTO Publishing.
• Findlay, C., and Hoekman, B. (2020), “Value chain approaches to reducing policy spillovers on international business”, Journal of International Business Policy.
• Thrall, C. (2021), “Public-private Governance Initiatives and Corporate Responses to Stakeholder Complaints” International Organization, 1-34.