| Summary: | This Working Paper provides an analytical framework of development co-operation for private sector development (PSD) and a measurement to capture relevant Official Development Finance (ODF). PSD is defined as development co-operation which addresses relevant policies and institutions, market functioning and enterprise resources. It aims to improve the investment climate and productive capacity of the local private sector-particularly of small- and medium-sized enterprises-including through developing physical infrastructure. The analysis shows that development partners disbursed roughly a third of total ODF each on helping improve the investment climate, productive capacity, and physical infrastructure. For the investment climate, large amounts were allocated to macro-economic stability and public governance. To boost productive capacity, support to financial services - particularly to commercial banks that on-lend to SMEs and investments in equity funds - was particularly high. Finally, for physical infrastructure, about half the ODF went to transport, particularly roads, and a third to energy
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