International Cooperation for building economic institutions in the

International Cooperation for building economic institutions in the MENA region Granada, 20 May 2014 Charles-Henri Montin, Smart Regulation Consultant Former Senior Regulatory Expert, Ministry of economy and finance, Paris http: //smartregulation. net C. H. Montin, Granada, 20 May 2014 1

Approach and contents Ø Ø Approach and sources (“practitioner”) – Personal participation in actions to build capacities in the MENA and other regions – Policy making in the OECD MENA Governance Initiative Steering Group Two parts (for discussion) – What is “institution-building” in the governance context and what are the challenges – International cooperation: how to make the best use of them for national results C. H. Montin, Granada, 20 May 2014 2

INSTITUTIONS FOR REGULATORY REFORM Ø Ø Institutions Policies Tools Which “ institutions” are we addressing – Drafting new or amended rules and regulations (line ministries, other regulators, parliament) – Regulating and ensuring compliance and enforcement of rules (inspections, audit offices, judiciary) – Oversight of regulatory processes (formulating policy, monitoring, evaluating, reporting) C. H. Montin, Granada, 20 May 2014 3

The functions of regulatory institutions “The right set of institutions and mechanisms are required to actively provide oversight of regulatory policy procedures and goals (2012 OECD recommendation n° 3)”: • Regulatory oversight bodies (OB) with whole of government responsibility • Ministerial accountability for regulatory policy • Efficient whole-of-government coordination of policymaking • Measureable programs such as reduction of administrative burdens • Careful design of independent (economic) regulators C. H. Montin, Granada, 20 May 2014 4

Functions of the oversight body Ø Ø Oversight of the rule-making process Assisting rule-makers in their evidence-based analysis Challenging the quality of the regulatory proposals, notably by checking RIAs Advocating for quality regulation (better regulation) and promoting the implementation of BR principles, including training and guidance C. H. Montin, Granada, 20 May 2014 5

Options for setting up the oversight function Ø Ø OB within the executive branch driving and managing regulatory reform across gvt High-level committees for regulatory reform (leading at political level) Advisory and/or advocacy bodies: challenge and advising on the government’s regulatory reform Ad-hoc institutions established for specific tasks and regulatory reviews C. H. Montin, Granada, 20 May 2014 6

Getting the governance context right Ø Ø Ø Dynamic process between the center and line ministries/ regulators System of checks and balances; incentives Need for expertise in line ministries/regulators, Division of tasks Quality control body (Conseil d’Etat or Legislative Bureau) Balance between political discretion and need for expertise, Timing C. H. Montin, Granada, 20 May 2014 7

Institutional Design: OB within the executive Executive 1. Centre of Government Oversight Body 2. 3. 4. 5. 6. Independence & Authority High level political support Whole-of-Government Multidisciplinary Broad concept of reform Legislative Secondary Legislation Regulation C. H. Montin, Granada, 20 May 2014 Primary Legislation 8

Examples of authorities in MENA region Ø Ø Bahrain: Legislative and Legal Opinion Commission, an independent (judiciary) institution (http: //www. legalaffairs. gov. bh/) Egypt 2008 -2012: ERRADA http: //www. errada. gov. eg/index_en. php Tunisia: central steering committee in Présidence du gouvernement + guillotine project with specific inst. setting Lebanon: Legislation and Consultation Department in MJ and Council of State http: //www. statecouncil. gov. lb/tarikh_fr. htm C. H. Montin, Granada, 20 May 2014 9

Success factors Ø Ø Ø OB located close to core executive functions Credibility of the core unit builds on technical expertise and political support Transparency and accountability, Checks and balances, limited opt-out exemptions and time limits Networked approaches: a core body, with suitable powers, coordinates a network of units in ministries. Stability of the structures: gradual or big bang approaches; quick-wins and real outcomes C. H. Montin, Granada, 20 May 2014 10

Recommendations for MENA region Ø Ø Ø Design a central institutional mechanism within government aimed at enhancing the quality and efficiency of government policy and programmes. Build and strengthen co-ordination mechanisms inside and outside the administration to foster coherence across policy objectives and to clarify the responsibilities of the various actors in the regulatory system. Develop a policy for the continuous awareness raising and training of regulators. C. H. Montin, Granada, 20 May 2014 11

New trends (2014) Ø Ø Ø growing demand from MENA countries for comprehensive country projects based on an overall country strategy core governance reforms to strengthen accountability, transparency and public service delivery, leading to greater trust in government focus on public service delivery: – Better use of ICT, – stronger civil society engagement and consultation processes to incorporate youth in the decisionmaking – territorial development to address regional disparities C. H. Montin, Granada, 20 May 2014 12

Building institutional capacities in MENA region Ø Ø Audits, reviews (ex OECD regional review) Bilateral and multilateral projects such as improvement of business regulations (Tunisia) or creating BR units, for capacity building Regional dialogue and tools: – Charter for regulatory quality; publications – Training centres Thematic conferences example legislative drafting in Morocco funded by Euro. Med. C. H. Montin, Granada, 20 May 2014 13

MULTI-FACETED INTERNATIONAL COOPERATION Ø Ø Multiple actors – Bilateral or Multilateral – International or intergovernmental – G 8/Deauville, Open Government Partnership – OECD MENA Initiative, Euro. Med (Partnership for Democracy and Shared Prosperity) Different approaches – strategic commitment/delivery – Political or economic priority (governance or investment) – Different procedures and requirements C. H. Montin, Granada, 20 May 2014 14

Opportunities and challenges After the Arab Spring Ø Job creation is the top priority Ø Emigration is expected to rise as a result of the Arab Spring. Ø Fighting corruption and strengthening the rule of law are essential for economic growth and development. Ø A bloated public sector has distorted labour markets and crowded out the private sector Ø Entrepreneurship is very low in most MENA countries. (source: O’Sullivan, Rey & Galvez Mendez) C. H. Montin, Granada, 20 May 2014 15

EU Partnership for Democracy and Shared Prosperity Ø Ø 3 “key pillars: ” – democratic transformation and institution-building, fundamental freedoms, constitutional reforms, reform of the judiciary and the fight against corruption – a stronger partnership with the people, support to civil society and on enhanced opportunities for people-to-people contacts with a particular focus on the young – sustainable and inclusive growth and economic development especially support to SMEs, vocational and educational training, improving health and education systems and development of the poorer regions (from COM(2011) 200 final) 8 March 2011 Known as EUROMED, instrument of the Union for the Mediterranean, f. k. a. Barcelona process. Managed by European External Action Service C. H. Montin, Granada, 20 May 2014 16

EU Neighbourhood Instrument (2014) targets Ø Ø Ø Ø (1) Promoting human rights , freedoms, the rule of law, equality, sustainable democracy, good governance and democracy, (2) Achieving progressive integration into the EU internal market (3) Creating conditions for well managed mobility of people and promotion of people-to-people contacts; (4) Encouraging development, poverty reduction, internal economic, social and territorial cohesion, rural development; (5) Promoting confidence building, security and the prevention and settlement of conflicts; (6) Enhancing sub-regional, regional and Neighbourhood wide collaboration as well as Cross-Border Cooperation; Implemented by Europe. Aid. € 11. 2 bn 2014 -2020 C. H. Montin, Granada, 20 May 2014 17

The Deauville Partnership (DP) Ø Ø G 8 May 2011 political process to support (3 pillars) – (governance) the democratic transition and foster governance reforms (accountability, participation) – (finance) Job creation for sustainable and inclusive growth – (trade) Regional economic integration (ALECA) 12 donor countries (200 m $ pledged) DP created MENA Transition Fund 4 thematic areas – Investing in Sustainable Growth. – Inclusive Development and Job Creation. – Enhancing Economic Governance. – Competitiveness and Integration C. H. Montin, Granada, 20 May 2014 18

Deauville Partners Ø Ø Ø G 8 + International Organisations (see below) 5 Partners: SAU, UAE, KOW, QA, TUR 6 beneficiaries: MA, TU, LI, EG, JO, YE C. H. Montin, Granada, 20 May 2014 19

Open Government Partnership Ø Ø Ø Launched by US in Sept 2011 to promote values: – Accountability – Technology and Innovation – Citizen participation – Transparency Members undertake to work with civil society to develop and implement an OGP action plan, report on progress and participate in the independent reporting mechanism See OGP Guiding Principles for Government Self. Assessment Reports C. H. Montin, Granada, 20 May 2014 20

MENA-OECD: a solid platform for reform Ø PARTNERS – Anna Lindh Foundation – ARADO – CAWTAR, – EC – IMF – Uf. M – UNDP – WB Two Programmes Governance Investment Ø REGIONAL NETWORKS (Governance) – Integrity and Anti. Corruption – Open government and innovation – Senior Budget Officials – Public Service Delivery, PPP and regulatory reform – Gender Focus Group – Territorial Development Focus Group C. H. Montin, Granada, 20 May 2014 21

Multi-disciplinary programme of work Ø Ø Ø Support to SME, within the Deauville Partnership Administrative simplification Public Procurement PPP: regulatory framework, inst. capacities Gender: see 2013 OECD-CAWTAR report on gender, law and public policy: includes chapter on effective institutions and policy-making Regulatory Reform: see 2013 report on RR in MENA: lists present achievements, challenges and good practices, recommends new tools and institutional development C. H. Montin, Granada, 20 May 2014 22

The OECD Governance Programme C. H. Montin, Granada, 20 May 2014 23

Delivery: example OECD MENA Ø Ø G 8 Deauville Partnership Open Governance and Anti-corruption Action Plan: OECD lead organisation Dissemination of open government principles and practices to promote innovative government Assistance to accession to Open Government Partnership Combination of regional support and country specific projects: – Access to international policy instruments – Capacity building activities – Assistance to implementation – Policy dialogue among peers – Tailored policy analyses and recommendations C. H. Montin, Granada, 20 May 2014 24

Examples of OECD supported country projects Ø Ø Tunisia – Has becomes OGP member in Jan 2014 – Reinforcing budget transparency (GE support) – integrity and accountability Morocco – OG policies: law on access to information – Integrity and part. : support to Médiateur and ICPC Palestinian Authority – Support since 2009 leading to institution building and technical documents UAE, Jordan, Yemen, Libya C. H. Montin, Granada, 20 May 2014 25

Other notable achievements of OECD Ø Ø Training activities – Training Centre of Caserta: capacity building in procurement, ICT, regulatory policy, administrative simplification – Partnership with IMF Middle East Centre for Economics and Finance Evidence-based regional policy dialogue – OGP meeting in London Nov 2013 – Regulatory Reform in MENA report – Gender, law and public policy report C. H. Montin, Granada, 20 May 2014 26

Issues for national officials Ø Ø Are there any additional frameworks and mechanisms for better institution building, which you would like to discuss? How could the OECD and other international organizations be made more efficient in support of individual Arab countries reform plans? How could the mechanisms be better focused on economic institutional development? What practical difficulties do you know of concerning interacting with international donors? C. H. Montin, Granada, 20 May 2014 27

To continue the study… Ø Ø Two text-books – OECD: Strengthening the institutional setting for regulatory reform – World Bank: Institutions for regulatory governance Further questions contact: • montin @ smartregulation. net File and URL of this presentation http: //www. montin. com/documents/granada 2014. ppt C. H. Montin, Granada, 20 May 2014 28