Benjamin Herzberg

1
PPD Workshop Paris, 2006
Public-Private Dialogue Engaging Stakeholders
through Competitiveness Partnerships
Benjamin Herzberg World Bank PSD Vice-Presidency
1
2
Going through the maze
Infrastructure (transport, energy, waste)
Innovation, RD
Training and labor information
Logistics Trade facilitation
Contract enforcement
Regulatory improvement
Corruption
Competition
Innovation
Access to finance
3
Racing to Competitiveness
Competitiveness
Labor Cost
Corruption
Red Tape
Poor Productivity
Costly and unreliable Utilities
Logistics.
4
A variety of binding constraints
Leading constraints identified by over 24,000
firms in 58 countries
Source Investment Climate Surveys.
5
A variety of investment climate reform policies
Learning about good practice
Capacity building
Reform management
Source WDR05.
6
Reform sustainability relies on engaging
stakeholders
GOVERNMENT
STAKEHOLDERS
6
7
Public-private dialogue mechanisms
Vietnam, Cambodia, South Africa, Mexico, Bosnia,
Ghana, Nigeria, Uganda, Malaysia, Botswana,
Japan, Bolivia, Indonesia, Senegal, Tanzania,
Bulgaria, Turkey, Cameroon, Cook Islands,
Germany, Hungary, Ireland, Kosovo, Malta,
Mozambique, Thailand, Mauritius, Etc.
Economic Council, Social Council, Gender
Coalition, National Competitiveness Committee,
Annual Forum, Private Sector Forum, Regional
Forum, Deliberation Council, Business Forum,
Competitiveness Review Group, High Level
Consultative Council, Better Business Initiative,
Bulldozer Committee, Investors Advisory Council,
Etc.
7
8
Types of structure
Vietnam
Turkey
Bosnia
Nigeria
8
9
Types of engagement
National forums
Series of working groups
Regional/local initiatives
Investors councils
Time-bound agreements
Government-endorsed
10
Benefits of umbrella process
Diagnostics
Solution Design
Implementation
ME

• Engagement
• Definition
• Empower stakeholders

• Watchdog
• Feedback loop

• Consensus building
• Filtering

• Ongoing support
• Watchdog
• Resources

10
11
Regulatory payoffs
Country Benefit Before After
Bosnia (Bulldozer) Slashed statutory capital requirements when registering a LLC 6. 500 1. 300 Increased number of registered companies (doubled in some areas)
Vietnam (VBF) Ease labor restrictions for expatriate employees Decree 105 limited the number of foreign employees to 3 of the total staff, with cap at 50. Circular 04 excluded management from limitation, and removed cap under special permissions.
Turkey (YOIIK) Amend law on company registration process 19 steps to register 2 and half month 1 step, 8 procedures to register 1 day process, 9 days total
Botswana (NACEE) Setting institutional means for economic empowerment Public grant program with high corruption, not investment guarantee agency, poor VC access. Citizen Entrepreneur Dev. Agency (CEDA). Direct link to Ministries of Finance Planning Subsidized loans, VC, JV 50 applications/week
11
12
PPD dimensions
Pubic Authorities Engagement means sufficient
capacity, political will and leadership. Business
community Needs to be somehow organized, led
and feel a basic sense of security. Champion
Needs credibility, expertise and the ability to
get media attention Instruments Need
logistical facilities, seed funds (may also
supplement sponsor in QA)
12
13
PPDs step-by-step
Mapping to government structures
Implementation follow-up
Branding Logos
Secretariat and working groups
Communication techniques
Rhythm of meetings
Types and form of proposals
14
Choosing the right battle
Focusing on this will bring the others
15
Format does matter!

• Example
• Collecting proposals
• FOUR QUESTIONS
• Issue at stake
• Why is it a problem?
• What is the proposed solution?
• What are the action items?

16
Transparency, legitimacy, accountability
BULLDOZER PHASE II FIRST PLENARY SESSION Forms distributed by committees Proposals Received by committees Proposals pre-selected by committees Selected Proposals sent to Bulldozer Board Selected proposals by Bulldozer Board Proposals vetted by IMF, WB, EC, USAID, OHR Proposals selected in First Plenary Session for inclusion into final book of 50 Proposals on hold for further review
Northwest 500 29 27 8 7 6 6 1
Northeast 700 40 20 10 5 4 4
Banja Luka Region 600 70 40 10 4 2 2 2
Sarajevo Region 450 132 32 12 9 7 5 3
Herzegovina 200 15 10 4 3 1 1 2
Central Bosnia 1200 80 25 10 3 1 1 4
Total 3650 366 154 54 31 21 19 12
Ratio ? 100 42 15 8.5 6 5
16
17
Stakeholder management
For

• MOBILIZE
• Identify them
• Assign and coordinate roles
• Build consensus

• LEVERAGE
• Communications
• Education
• Empowerment

• CO-OPT or NEUTRALIZE
• Information
• Consultation
• Diversion
• Compensation
• Disempowerment
• Confrontation

Level of support

• BYPASS or STEAMROLL
• Communications

Influence
Against
Low
High
18
Communicating on reform ideas
Bosnia Bulldozer initiative, 50 reforms in 150
days
Nigeria PPD
Georgia legal and judicial reform
From the Protocols for Prosperity... To the
Prosperity Garden (Bosnia)
Accountability gets specific in Bosnia (corporate
governance reform)
Cambodia SME credit reform TV shows on location
(SMEs) Experts
Philippines procurement reform
18
19
Issues summary
20
Strategies for challenges 1/3
CHALLENGES Too much influence to a small and
unrepresentative group Create opportunities for
rent-seeking Reinforce the power of existing
elites
Be open and transparent
Reinforcing vested interest
Strong quality control
Create a broad base
Mongolia
CHALLENGES Gives big/FDI businesses a more
powerful voice than local SMEs
Strengthen associations
Over and under representation
Reach out equally to entrepreneurs
Revisit structure participants
Tanzania, 18
20
21
Strategies for challenges 2/3
CHALLENGES Becomes ineffective after a promising
start. Descends into a talking shop from which
little substantive action results. Participants
become disillusioned, wasting time and energy.
Credibility of public policy suffers.
Clear agenda, concrete proposals
Sustainability issues
Manage expectations
Live and let die
Bolivia, Nigeria
Generate bottom up support
CHALLENGES Rests too heavily on the personal
involvement of a senior government figure. Looses
impetus when that person leaves. Cannot resist
shift in political will
One man shows
Secure written commitment
Prepare in advance
Botswana
21
22
Strategies for challenges 3/3
Depoliticize through outreach
CHALLENGES Too closely aligned with political
factions Deemed to die with government
change Instumentalized by opposition
Political risks
Woo parliamentarians
Woo local politicians
Bosnia
CHALLENGES New mechanisms for consultation
duplicate the work of existing mechanisms,
causing confusion and overburdening participants
Include existing institutions
Institutional misalignments
Use technical ministerial staff
Quickly transfer competencies
Uganda NF
22
23
The way forward
Funding mechanisms (gov. p.s., donors) Sub-nationa
l programs Integration to specific country
context Clusters / Product markets Post conflict
23