In November 2010, Simon White (Managing Director of Southern African IDEAS) led an international review team to examine the way donor and development agencies in Kenya support the government and business membership organisations in their efforts to improve the business environment for private sector development. This activity was conducted on behalf of the Donor Committee for Enterprise Development. The other team members were Ms. Liz Winton, DFID London, and Mr. Stefan Engels, UNDP Nairobi.

There were two broad reasons for conducting a review of BER-support programmes and practices in Kenya:

1 To improve donor and development agencies’ policies and practices in private sector development in general and business environment reform in particular; and

2 To improve donor coordination through a better understanding of the various approaches, processes and mechanisms donor and development agencies use to support private sector development and business environment reform.

The review will benefit participating donor and development agencies at headquarter and field levels. At the field level, the review will highlight the challenges faced in supporting BER, identify best practices and lessons learned, and improve collaboration between agencies and with programme partners, such as government partners and business representatives.

A review of BER-support programmes is not considered an evaluation of these programmes. Where an evaluation would typically examine the outcome and impact of a BER-support programme and measure this against the resources contributed to the programme, this review will focus on the practice of supporting reform in developing countries. Thus, the focus of the review is on how donor and development agencies go about the processes associated with:

• Assessing the business environment and identifying reform priorities;
• Designing and managing business environment reform programmes; and
• Monitoring and evaluating business environment reform outcomes and impacts.

While examining these practices, the review will identify how donor and development agencies are:

• Working with programme partner, such as developing country governments, business membership organisations and other civil society organisations;
• Collaborating with other donor and development agencies engaged in BER at the country level;
• Harmonising their programme interventions with key national development plans and frameworks;
• Measuring the results of their programme interventions and benchmarking change; and
• Promoting sustainability of reform efforts.

The above points are just some of the challenges agencies face when supporting BER in developing countries. The 2008 DCED donor guidance lists a wide range of these challenges, which will form the basis of the review. The guidance is available from: http://www.enterprise-development.org/download.aspx?id=586

KEY WORDS: private sector development; business environment reform; donor and development agencies; micro, small and medium enterprises (MSMEs); micro and small enterprises (MSEs); small and medium enterprises (SMEs); policy frameworks; legal and regulatory framework; making markets work for the poor (M4P); entrepreneurship; Kenya