Transcript Document

Supporting
Business
Environment
Reforms:
Practical Guidance for
Development Agencies
Donor Committee for Enterprise Development
• Established in 1979 as the Committee of Donor
Agencies for Small Enterprise Development
• The DCED works on:
– Defining best practice in priority themes in participatory ways
– Disseminating best practice and successful experiences
– Increasing the effectiveness of development practitioners
• Previous donor guidance:
– Small and micro-enterprise finance: Guiding principles for
selecting and supporting intermediaries, 1995 (“Pink Book”)
– Business Development Services for Small Enterprises:
Guiding Principles for Donor Intervention, 2001 Edition (“Blue
Book”)
A multi-agency view: Member Agencies
Bilateral Member Agencies
•
Agence Francaise de Developpement (France)
•
Australian Agency for International
Development (Australia)
•
Austrian Development Cooperation (Austria)
•
Canadian International Development Agency
(Canada)
•
German Federal Ministry for Economic Coop.
and Dev. (BMZ, Germany) / German Technical
Cooperation (GTZ)
•
International Development Research Centre
(Canada)
•
Ministère Francaise des Affaires Étrangères
(France)
•
Netherlands Ministry of Foreign Affairs
(Netherlands)
•
Norwegian Agency for Development
Cooperation (Norad, Norway)
•
•
•
Royal Danish Ministry of Foreign Affairs
(Danida, Denmark)
Swedish International Development Agency
(Sweden)
Swiss Agency for Development Cooperation
(Switzerland)
Multilateral Member Agencies
•
Food and Agriculture Organization (Italy)
•
International Fund for Agricultural
Development (Italy)
•
International Labour Office (Switzerland)
•
Organisation for Economic Co-operation and
Development (France)
•
United Nations Industrial Development
Organisation (Austria)
•
World Bank Group - SME Department
(USA)
Donor-Supported Business Environment Reform
• Business Environment Working Group established in 2001
• Research:
– 2002: Enabling small enterprise development through a better
business environment; donor experiences in supporting reforms in
the business environment
– 2004: Donor approaches to improving the business environment for
small enterprises
• Conferences:
– International (Cairo 2005)
– Regional, Asia (Bangkok 2006)
– Regional, Africa (Accra 2007)
Defining the “Business Environment”
• A sub-set of the broader investment climate and is
comprised of three elements:
– Policy and legal framework
• The policies, laws and regulations that affect business
– Regulatory and administrative framework
• The ways in which policies, laws and regulations are enforced and
managed
– Institutional arrangements
• The ways in which government and business represent themselves
and communicate with each other
Investment Climate
Open markets such as
financial, labour, etc.
Rule of law
Business Environment
Equitable and
efficient labour
markets
Policy and Legal Framework
Regulatory and Administrative Framework
Institutional Arrangements
Skills and HRD
Sector-Specific Business Environment
Regional, National and Sub-National
Business Environment
Economic
predictability
Political stability
Infrastructure
Reforming the Business Environment
• Development agencies support their programme
partners (government and the private sector) in their
efforts to reform the business environment.
• Business environment reform changes business
behaviour in ways that lead to increased levels of
investment and innovation, and the creation of more
and better jobs. This is done by:
– Reducing costs
– Reducing risks
– Increasing competitive pressures
Levels of Business Environment Reform
• Regional
• National
• Sub-national
• Sectoral
Functional Areas of Reform
• Simplifying business registration and licensing procedures
• Improving tax policies and administration
• Enabling better access to finance
• Improving labour laws and administration
• Improving the overall quality of regulatory governance
• Improving land titles, registers and administration
• Simplifying and speeding up access to commercial courts and to
alternative dispute resolution mechanisms
• Broadening public-private dialogue processes with a particular
focus on including informal operators, especially women
• Improving access to market information
2. SOLUTION DESIGN PHASE
Design high-level structure
Engage stakeholders
Agree overall design
Develop implementation plan
1. DIAGNOSTIC PHASE
Define purpose and objectives
Identify main stakeholders
Get the commitment
Mobilize funding
Analyze constraints
Analyze capacity
Collect baseline data
Phases in 3. IMPLEMENTATION PHASE
technical assistance
Business Provide
Train civil servants
reform procedures
Environment Launch
Information campaign
based on user
Reform Fine-tune reforms
feedback
4. EVALUATION AND SUSTAINABILITY
Conduct programme evaluation
Ensure recommendations are incorporated
in new procedures
Prepare programme reports
Conduct impact assessments (usually done
beyond the programme cycle)
Key Messages
•
A healthy business environment is essential for growth and poverty
reduction
•
Business environment reform is complex – agencies should ensure
thorough diagnostic analysis, maintain a systemic approach and
understand the broader causal picture
•
Business environment reform is always political
•
Government should lead and own reform; donors should support them
•
Agencies should ensure the inputs and participation of all stakeholders
and enhance stakeholder capacity for ongoing and future reforms
•
Agencies should ensure systems are in place for coordination and take
responsibility for the quality and consistency of their advice and
assistance
•
Agencies should sequence reforms according to context
•
Agencies should understand and manage the implementation gap
•
Agencies should ensure the reform process has a strong
communication programme
Principles
Principle 1: Adopt a systemic approach to reform
Principle 2: Understand and respond to the political economy of
reform
Principle 3: Respond to and stimulate the demand for reform and
drivers of change
Principle 4: Ensure domestic ownership and oversight of reform
efforts
Principle 5: Strengthen the role and capacity of key stakeholders
Principle 6: Focus on what the private sector needs through publicprivate dialogue
Principle 7: Focus on the binding constraints to business growth
and scope reforms accordingly
Principle 8: Sequence business environment reforms and allow
time
Principle 9:
Address the implementation gap
Principle 10:
Formulate a communication strategy and use
media strategically
Principle 11:
Work with government as the lead agent
Principle 12:
Align business environment reforms with
national development plans
Principle 13:
Ensure good donor coordination
Principle 14:
Balance international and national expertise
Principle 15:
Promote quality assurance in development
agency support of business environment
reform
Contested Issues in Supporting Business
Environment Reform
• Can we measure the extent to which business environment
reform contributes to economic growth and poverty reduction?
• Should business environment reform focus on enterprises that
are owned and managed by poor people?
• Should development agencies simply respond to demand for
reform or should they also contribute to creating a demand for
reform?
• Should development agencies support individuals or institutions?
• Does support for the private sector interfere with political
processes?
• What role should government play in enterprise development?
Donor Committee for Enterprise Development
www.Enterprise-Development.org
www.Business-Environment.org