The Architecture of Private Public Dialogue: Insights from OECD Countries

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The Architecture of Private Public Dialogue
Insights from OECD Countries ExperiencesNicolas
Pinaud
International Workshop on Public Private
Dialogue February 1 2, 2006 Paris
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Successful PPD in OECD countries

• Japan the MITI and Japanese corporations until
  the early 90's
• France the "Trente Glorieuses" (from the 50's to
  the 70's)
• Scandinavian neo-corporatist negotiated
  economies
• Mexico from 1987 onwards (Economic Pacts, COECE,
  Economic Deregulation Council)
• Korea the Park Chong Hee era the Federation of
  Korean Industry (FKI)
• ?

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Issues

• What are the institutional prerequisites of a
  successful and sustainable PPD?
• Is there a most appropriate institutional
  architecture for PPD processes?
• How must PPD arrangements evolve over time to
  accommodate changes?
• What lessons from OECD countries' experiences?

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The PPD Interaction Components
Institutional Mechanisms
Nature of PPD Participants
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The PPD Interaction Objectives
Concrete decisions Policy reforms Strengthening
of business sector Durable trust between
Business the State
Institutional Mechanisms
"Quality" of PPD Interaction
Nature of PPD Participants
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The nature of PPD actors

• A developmental State
• Autonomy of the State and political elites /
  private interests a Vision for economic
  development
• France in the 50's 60's the "Keynesian
  modernizing State public focal monopoly
  (Meisel, 2004)
• Korea "long Korean Confucian tradition of
  meritocratic civil service (Fields, 1997)
• Japan/MITI "without doubt the greatest
  concentration of brainpower in Japan" (Johnson,
  1982)
• And the World Bank 1993 East Asian Miracles
  report.

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The nature of PPD actors

• A developmental State
• Autonomy of the State and political elites /
  private interests a Vision for economic
  development
• Proximity with the private sector Korea, Japan /
  India
• ? Embedded Autonomy (Evans, 1995) Connectedness
  without Capture

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The nature of PPD actors

• An organised private sector and strong business
  associations
• Representativeness (voluntary vs. compulsory
  State chartered membership)
• Analytical capabilities Ability to feed the
  process of policy-making
• In OECD industrialized countries private sector
  think-tanks
• Also Mexico in the early 90s (e.g. NAFTA
  negotiations, also the Business Coordinating
  Council) 

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The nature of PPD actors

• An organised private sector and strong business
  associations
• Representativeness (voluntary vs. compulsory
  State chartered membership)
• Analytical capabilities Ability to feed the
  process of policy-making
• Capacity of sectoral private regulation and
  decision enforcement
• Willingness to engage in PPD (other channels of
  State Biz interaction)
• Benefits expected by the BA (welfare maximising
  vs. rent-seeking)
• ? Complex strand of literature on the political
  economy of business associations

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The Nature of PPD actors
Institutional Mechanisms
Connectedness without Capture Balance of power
"Quality" of PPD Interaction
Nature of PPD Participants
Developmental State Organized private
sector Welfare-maximizing B.A.
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PPD Institutional Mechanisms

• The PPD device Who?
• Both a top-down bottom-up process
• High level meetings
• Policy champions, continuity in political
  leadership, political resolve and commitment at
  top of State apparatus
• Mexico in the 90s, Korea in the Parks era.
• Permanent working groups at the technical level
• ... feeding into the policy-making process at the
  higher levels of government business
  interactions
• Japan MITI Mexico the Economic Deregulation
  Council

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PPD Institutional Mechanisms

• The PPD device How?
• Consultative / Deliberative councils with
  functional authority over certain policy areas
• Measurable objectives targets, clear deadlines
• Selective benefits and rewards (confidential
  information, tenders, subsidies tax allowances,
  etc.)
• Substantial contribution by each participant
• Mexico in the 90s NAFTA, struggle against
  inflation / Public tenders, information on
  governments policy orientations

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PPD Institutional Mechanisms

• The PPD device What for?
• Specific, limited, and concrete agenda
• Mexico in the 90s Productivity vs. NAFTA
  Disinflation
• Timeliness of issues, i.e. associated with
  contextual incentives (situation of crisis,
  economic imbalances, strategic decisions to be
  made, etc.)
• e.g. need for reforms New Zealand Business Round
  Table in the 80s
• Time-bound discussions

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Formal PPD and beyond

• State Business interactions a portfolio
  approach (Schneider, 2005)

State Bureaucracy Political Elites
Business Sector
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Formal PPD and beyond

• Fruitful PPD often associated to informal State
  Business interactions.
• Same background (education, kinship bonds,
  sociological, etc)
• Rub shoulders in social networks
• From civil service to corporate boardrooms
  vice-versa
• Numerous examples in OECD countries
• France Pantouflage Grandes écoles
• Japan Amakaduri Todai-Yakkai-Zaikai
• Korea Tuk Chae Taegu-nothern Kyonsang
  Mafia
• Mexico lunch regulation governmental
  participation (Fox government)

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PPD the Dynamics

• The very nature of PPD is unstable

Institutional Mechanisms
"Quality" of PPD Interaction
Nature of PPD Participants
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PPD the Dynamics

• Capture (Korea in the 90s)
• Irrelevance
• Sidelining democracy (New Zealand in the late
  80s and 90s)
• Ad-hoc and time-bound
• Flexible (Mexico in the 90s)
• Inclusive

• Risks
• ? Case for

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PPD in OECD Countries Conclusions
Top down Bottom-up Measurable
objectives Clear timeline Incentives Concrete,
timely limited agenda
Concrete decisions Policy reforms Strengthening
of the business sector Durable trust between
Business the State
Institutional Mechanisms
"Quality" of PPD Interaction
Connectedness without Capture Balance of power
Nature of PPD Participants
Developmental State Organized private
sector Welfare-maximizing B.A.
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PPD in OECD Countries Conclusions

• OECD experiences are no textbook patterns of
  PPD!
• Imbalance of power Korea, France
• Japanese bureaucracy large pockets of
  inefficiencies
• Mexico Developmental State ??? Pocket of
  efficiencies instead
• Incestuous State Business relationship Korea
  and Japan, France to a lesser extent
• Still, various combinations of these elements
  have turned out to be a recipe for success
• ? Room for experiment, pragmatism and action