In the quest for \u27good governance\u27, the developing countries have embarked on ambitious NPM style market-oriented reform policies mainly advocated by international development agencies (IDA) over the last two decades. Bangladesh has been pursuing decades of market-oriented reforms advocated by IDAs with the prime objectives of achieving an efficient, cost effective service delivery through increased involvement of the private sector. The shift towards marketisation has led to a complex, horizontal and networked structure of partnerships between state and non state actors. The private sector and NOOs are now delivering goods and services which were once the exclusive domain of the state. These changes have however, not been associated with changes in institutional arrangements, safeguards and regulation required to support the private sector led development, which is not sustained independently of the context in which it operates. Using the agriculture input sector as an exemplar, this paper explores the constraints of sustainable private sector led development. The paper argues that the main impediment to private sector led development in this sector centre on lack of good governance. In addition, lack of an integrated market structure, market information, capacity and awareness building are other factors that are inhibiting the private sector led development. We argue that a functional governance model is required in Bangladesh that engages the state, civil society and the private sector to work effectively in a participatory approach to deal with the constraints of private sector led development and for improving good governance.
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