1 Benjamin Herzberg World Bank PSD Vice-Presidency Public-Private Dialogue Engaging Stakeholders through Competitiveness Partnerships PPD Workshop Paris,

2 Going through the maze Infrastructure (transport, energy, waste) Innovation, R&D Regulatory improvement Competition Logistics & Trade facilitation Access to finance Training and labor information Corruption Innovation Contract enforcement

3 Racing to Competitiveness Red Tape Poor Productivity Costly and unreliable Utilities Logistics. Competitiveness Labor Cost Corruption

4 A variety of binding constraints Leading constraints identified by over 24,000 firms in 58 countries Source: Investment Climate Surveys.

5 Capacity buildingReform management Learning about good practice A variety of investment climate reform policies Source: WDR05.

6 Reform sustainability relies on engaging stakeholders 6 + GOVERNMENT STAKEHOLDERS But how to structure that engagement?

7 Public-private dialogue mechanisms 7 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. 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.

8 Types of structure 8 Bosnia Vietnam Turkey Nigeria Coordinating secretariat Working group 3 Working group 2 Working group 1 Working group 4 Working group 5 Private sector advocates, associations, government representatives, donors

9 Types of engagement National forumsSeries of working groupsRegional/local initiatives Time-bound agreements Investors councils Government-endorsed

10 Diagnostics Solution Design Implementation Benefits of umbrella process Engagement Definition Empower stakeholders Consensus building Filtering Ongoing support Watchdog Resources M&E Watchdog Feedback loop

11 Regulatory payoffs 11 CountryBenefitBeforeAfter Bosnia (Bulldozer) Slashed statutory capital requirements when registering a LLC $ $ 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

12 PPD dimensions Pubic Authorities: Engagement means sufficient capacity, political will and leadership. Business community: N eeds 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) Strong BUSINESS COMMUNITY PUBLIC AUTHORITIES CHAMPION INSTRUMENTS Weak 12

13 PPDs step-by-step Selection of participants Credibility and legitimacy Secretariat and working groups Rhythm of meetings Institution vs. initiative Types and form of proposals Mapping to government structures Implementation follow-up Communication techniques Branding & Logos

14 Choosing the right battle Focusing on this will bring the others

15 Format does matter! Example: Collecting proposals FOUR QUESTIONS 1.Issue at stake 2.Why is it a problem? 3.What is the proposed solution? 4.What are the action items?

16 Transparency, legitimacy, accountability 1 Review and analyze Dialogue and process Enact and publish Implement and follow-up Verify and measure 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 Northeast Banja Luka Region Sarajevo Region Herzegovina Central Bosnia Total Ratio  100%42%15%8.5%6%5% 16

17 Stakeholder management MOBILIZE Identify them Assign and coordinate roles Build consensus LEVERAGE Communications Education Empowerment Influence LowHigh Level of support Against For BYPASS or STEAMROLL Communications CO-OPT or NEUTRALIZE Information Consultation Diversion Compensation Disempowerment Confrontation

18 Communicating on reform ideas Georgia legal and judicial reform Bosnia Bulldozer initiative, “50 reforms in 150 days” Nigeria PPD Philippines procurement reform Accountability gets specific in Bosnia (corporate governance reform) Cambodia SME credit reform – TV shows on location (SMEs) + Experts From the Protocols for Prosperity... To the Prosperity Garden (Bosnia)

19 Issues summary

20 Strategies for challenges 1/3 Be open and transparent CHALLENGES Too much influence to a small and unrepresentative group Create opportunities for rent-seeking Reinforce the power of existing elites Create a broad base Strong quality control 20 Strengthen associations CHALLENGES Gives big/FDI businesses a more powerful voice than local SMEs Revisit structure & participants Reach out equally to entrepreneurs Reinforcing vested interest Over and under representation Mongolia Tanzania, 18%

21 Strategies for challenges2/3 Clear agenda, concrete proposals 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. Live and let die Manage expectations 21 Sustainability issues One man shows 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 Prepare in advance Secure written commitment Bolivia, Nigeria Botswana

22 Strategies for challenges3/3 Depoliticize through outreach CHALLENGES Too closely aligned with political factions Deemed to die with government change Instumentalized by opposition Woo local politicians Woo parliamentarians 22 Include existing institutions CHALLENGES New mechanisms for consultation duplicate the work of existing mechanisms, causing confusion and overburdening participants Quickly transfer competencies Use technical ministerial staff Political risks Institutional misalignments Bosnia Uganda NF

23 The way forward 23 Funding mechanisms (gov. p.s., donors) Sub-national programs Integration to specific country context Clusters / Product markets Post conflict