An Inter-American Development Bank (IDB) report published on January this year showed that the public debt ratio in South America has increased to over-indebtedness levels. This problem that has been growing prior to the COVID-19 pandemic costs, which was only part of accelerating this trend. More in depth, this research reported that South America has reached over 70% GNP recession, and its incomes and fiscal support are decreasing.
One of the main takeaways that IDB proposed for this problem was to consider the possibility of a half-private institution to control financial options. However, to further consider public-private collaborations, negotiation styles for it to happen come into play. Research from Prof. Louis T. Wells jr. highlights that terms agreed with third-world governments often lead to unstable long-term negotiations between the public and private sector in the region, being one of its reasons: the recurrent change of government interests.
The use of negotiation by governments is mostly known for public security aims, especially negotiations with rebels or gangs; however, the need for readiness in negotiation essentially reduces the political, financial and security risks of public proposals.
The importance of the application of stable government negotiations was found to be of high impact in the market, national income, public relations, and international investment viewpoints.
Successful cases extend from new ongoing topics such as the AI Race: according to a Harvard Business School (HBS) interview, the US government is getting better at negotiating with startups, which puts the nation in a better competitive stance. In more commonly known markets: this December 8th, thanks to EU and Norway bilateral and trilateral negotiations — the UK secured fishing opportunities in 2024, increasing sector income from £900 million in 2023.
The competitive outcomes obtained from these works are results of a decade-long history of governments clear negotiation agendas and methodologies transparency of contracts with other parties.
However, we must take into consideration that negotiation styles in government play a more significant role in decision making at lower organizational levels. Such is, investment specialized departments, education departments, and local and regional levels. Decision-making tends to be more influenced by national-level authorities during upper conflicts or international negotiations. This is important to assertively identify the key actors for these negotiations, such as:
- The Minister of Treasure from El Salvador as responsible to approve International Monetary Fund’s (IMF) yearly economic report publication, due to its transparency crisis;
- And the Palestine Administrative Capital as an actor that aims for the country’s decisive denial to negotiation with the Israel government;
In a blog-post published at Program of Negotiation Faculty of HBS, summarizes that government-led negotiations are characteristic for differences in decision-making power, regulatory constraints, and interests compared to private companies.
To successfully implement public policy research, and comply with the global demand of collaboration within academia, the private, and public sector, it’s crucial that actors, regardless of their field, are able to acknowledge the negotiation styles of each during inter-institutional discussions to enhance stable negotiations in South America.
Not capacitating and lacking a broad understanding of relationships between government institutions and officials, negotiation styles and clear agendas can be a major setback for the deployment of successful financial and economical techniques seen in the UK, US and EU.
Written by Emily Ulloa Lopez
