Big Results Now: regulations and regulatory reform

In October 2012, the Government of Tanzania resolved to establish a strong and effective system to oversee, monitor and evaluate implementation of its development plans and programmes – called ‘Big Results Now’. This was launched in the first half of 2013 and is being implemented through the Transformation and Delivery Council (TDC), the President’s Delivery Bureau (PDB) and Ministerial Delivery Units (MDUs).

The PDB has a primary objective to facilitate, monitor and evaluate the delivery of BRN initiatives in six national key priority areas: agriculture, water, energy, education, transport and resources mobilisation.

In December 2013, at a meeting of the Tanzania National Business Council chaired by President Kikwete, it was agreed that the PDB should also focus on constraints imposed on business by the enabling environment and recommend proposals to address those constraints.

The GoT recognises the need to improve Tanzania’s business enabling environment as one contributor to economic growth and is therefore organising a four week “lab” on business environment reform commencing 24 February 2014. The objective of the lab is to proposals with timescales, costs and key performance indicators. A planning meeting has agreed six priority areas to be addressed by the lab: regulations and regulatory institutions; access to land and security of tenure; taxation; corruption; labour law and skills; and contract enforcement, law & order.

I will be participating in the work stream looking at regulations and regulatory institutions. The pre-lab meeting identified seven basic issues that will need to be considered:

  • Simplification and automation of processes and procedures in doing business;
  • Harmonisation, consolidation and automation regulatory institutions;
  • Separation of revenue generation objective and functions from regulatory functions – agencies funded from government budget;
  • Regulation making should be participatory and transparent and reflect the spirit of underlying laws;
  • Business registration and regulatory licensing is streamlined, simplified and modernised;
  • Lead times for enforcement of regulations introduced; and
  • Regulatory Impact Assessment (RIA) including participatory processes and consultations should become part of a mandatory process for development and gazetting of regulations.

Each lab will involve around 20 senior people drawn private and public sectors. The hope is that the participants will not only develop workable and acceptable proposals but also that they will feel sufficiently committed to success that they will do whatever is necessary when they return to their day job.

I would welcome feedback from anyone who would like to influence the work of the lab and will be blogging over the course of the time that I am participating

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Making life easier for business

As momentum grows in countries like Rwanda and Burundi to bear down on red tape and improve the business enabling environment (see “Doing Business in the East African Community 2013: smarter regulations for small and medium size enterprises”) it seems that western governments are doing less to live up to their own rhetoric of making life easier for business. Over the last 8 years, the five countries of the East African Community have implemented 74 institutional or regulatory reforms to improve the enabling environment. To be fair, they have a long way to go: Rwanda has climbed to 52 out of the 185 countries now ranked annually whilst Burundi still languishes at 159.

But recent stories in the UK and US suggest that government enthusiasm to help business is waning. In the US, the National Federation of Independent Business, fed up with what they see as a tidal wave of regulation, has launched a new campaign, “Small Business for Sensible Regulation” to fight federal regulation that might stifle job creation not least because, they argue, it is small businesses that tend to drive job creation and economic growth. They say that complying with federal regulations is the most important problem facing small business today. Thomas Sternburg, founder of Staples which now employs more than 50,000 people, says that the level of red tape now would have meant that he would struggle to start his business today – and he argues in favour of the proposed Regulatory Improvement Act of 2013.

The Economist describes efforts by a group of US technology entrepreneurs to lobby for improvement in regulation in the US – FWD.US was launched in April to campaign for immigration reform. Its proposals have already passed through the Senate and it is now focusing on the House of Representatives. The key lesson from their efforts so far seems to be recognition that change in the law has to confer a wider public benefit than simply helping their businesses recruit the talent that they need (See Economist 24 Aug 2013: Mr Geek goes to Washington).

In the UK, a recent article in the Sunday Times (See Sunday Times, 18 Aug 2013: red tape bonfire fizzles out) reports on a review by the Government’s regulatory policy committee saying that the Government is adding to the regulatory (and financial) burden much more than it ought to be. The review asserts that government’s estimates of the cost to business of new regulation too low and that estimates of the benefits of removing old and redundant regulation are too high. The result is that costs to business increase at the rate of £80m per year. The review says that the net excess cost of regulation introduced since 2011 is more than £350m.

The Government now requires Departments to publish a six monthly “statement of new regulation”. When I first saw one of these, published by BIS (see BIS fifth statement of new regulation), I was rather impressed – but I have now spotted that this only covered regulation from BIS – and that other Departments are publishing their own statements. (See for example BIS sixth statement, DCLG sixth statement and DECC sixth statement)

It would be much better – and more likely to raise hackles and thus serious opposition from trade associations and others – if all these statements were amalgamated into a single report. And it would be better still if each six monthly report said what Departments planned to do generally to cut regulation rather than solely to respond to the need to eliminate old regulations in order to introduce new ones.

Influencing public policy on-line

Many organisations, and indeed individuals, use social media like Facebook and Twitter to rally their followers and encourage public action in support of their advocacy activities. But there are also now a number of on-line platforms springing up that allow people to come together to build mass movements, for whatever reason.

Recent campaigns (Global Zero, All Out (which now claims 1.3m members in 190 countries) and Meu Rio were all incubated by Purpose.com, based in New York and set up by Jeremy Heimans who previously launched Avaaz. I can see how the likes of Google, Audi and the Gates Foundation – all clients – can use a platform such as this but, at least so far, it is rather less obvious how an interest group, especially a trade association, might be able to use it to influence public policy. I have a suspicion that such platforms will only ever be relevant for salient and contentious issues. One way, perhaps, it can make a difference is in fund raising – but that makes it far more likely to be of use in the west than in the rather less developed countries of sub-Saharan Africa.

Read more on this in the Economist

Liquid feedback

In its edition of 3 January, the Economist had an interesting article on the power of interest groups in relation to management of the internet: everything is connected.

They talk about a number of on-line lobby groups but one was especially interesting since they use software called Liquid Feedback – which is open source and so anyone can download and use to set up their own feedback systems.

The software has been written to support the idea of Liquid Democracy. The Liquid Feedback website explains the concept thus:the basic idea is a democratic system in which most issues are decided (or strongly suggested to representatives) by direct referendum. Considering nobody has enough time and knowledge for every issue, votes can be delegated by topic. Furthermore delegations are transitive and can be revoked at any time. Liquid Democracy is sometimes referred to as delegated or proxy voting.”

The idea is that by carefully structuring feedback between those developing initiatives and those who might be impacted by them, it is possible to influence the design in a way that satisfies as many parties as possible.

Liquid Feedback is open-source software, developed by the Public Software Group in Berlin and available to anyone under an MIT licence, designed to support the development of policy propositions and decision making. It provides a communication channel so that anyone (or at least anyone who knows about it) can influence the proposal.

Prima facie, this looks like an exceptional tool that could be of real use to business associations, civil society organisations and NGOs which will not only allow but actively encourage members to participate in the development of policy positions. The software also allows, should it be needed, for members to vote on the policy position. An interesting wrinkle, however, is that votes can be given to others trusted by the voter, so that they do not have to be involved in every discussion but if a voter does not like the way that a particular policy is developing, the proxy vote can be easily rescinded. The more that members participate, the more likely it will be that the facts are represented accurately and the more likely that the members all feel that they ‘own’ the policy. The platform allows anyone to start a new discussion.

For further information and to download the software, go to Liquid Feedback

Ideas for improving the regulatory process

There is a desire by business and trade associations to influence public policy but there are a large number of possible policies, largely concerned with the process of policy making, that rarely get promoted – possibly because most associations take a sectoral approach – and yet could make a considerable difference, especially in developing countries where development partners are making efforts to support business associations to advocate change in public policy. Ideally, they should be taken up by apex associations, but even apex associations will not necessarily see a quick return so do not prioritise them. Ideas include:

  • Promoting the adoption by government of three or four simple principles which can be promoted across government to stress the importance of business to the economy and to encourage Ministries to think carefully about the potential implications of their decisions
  • Wherever possible looking for approaches that do not require regulation or legislation including codes of conduct administered by trade associations
  • Requiring the preparation and publication of a Regulatory Impact Assessment (complete with cost benefit analysis, ideally with an opportunity for the private sector to contribute to the cost benefit analysis) before new regulations impacting on business are adopted
  • Requiring minimum consultation periods to allow the private sector and other stakeholders to respond to proposals for new or changed regulations which impact on business
  • Wherever possible, designing regulations so that there is no need to apply for a permit or make a payment, but rather impose an obligation with (the few) businesses that fail to conform pursued through the courts
  • Requiring minimum periods between regulations being finalised and being implemented to allow businesses to understand the implications and, if necessary, to put in place appropriate procedures
  • Improving access, preferably through the creation of a comprehensive website, by businesses to the requirements imposed on them by legislation so that they understand exactly what is required, including tax rates, enforcers, etc
  • Asking the Government to require that a Minister in every Ministry be given explicit responsibility for regulatory reform with a view to reducing regulatory requirements and improving the enabling environment
  • Establishing a capacity building programme within government to ensure that many more officials understand the importance of creating an enabling environment conducive to growing business
  • Launching a regulatory reform action plan – with government inviting the private sector to identify regulations that could be improved or abolished – in order to send a clear message to business that it is ‘open for business’
  • Creating a department within government, preferably in the Prime Minister’s Office, to take responsibility for promoting regulatory reform
  • Minimising and preferably eliminating overlapping regulation and mulitple monitoring of businesses
  • Instituting a programme of annual awards to recognise publicly politicians and civil servants, Ministries and Agencies that have made special efforts to improve the enabling environment

I am sure you will have your ideas – do please feel free to share them.

Influencing legislators

For those of you interested in how research influences legislators (ie, Parliamentarians), you should read a recently published ODI working paper by Ajoy Datta and Nicola Jones: Linkages between researchers and legislators in developing countries.

The authors argue that legislators need access to good research to address the typical imbalance with the executive branch which usually has easier access to appropriate information (though I have to say that I often get the impression that the executive branches, at least in the countries in sub-Saharan Africa in which I work) could also benefit from access to better research.

The authors note that CSOs (and I would include business associations), especially in sub-Saharan Africa, have a strong role to play to representing ordinary people in the legislative process – and that many Governments hold legislative committee hearings which provide a ready mechanism for researchers’ voices to be heard, though that is not the only way for researchers to communicate with legislators. They assert that good research can move debates to more strategic levels and narrow areas of disagreement. However, they stress the importance of research being timely, relevant and independent. The authors say that legislators are looking for a “compelling story with practical policy recommendation”. They stress that policy proposals targeting legislators need to be short and easy to understand, though note that their staff teams may require more detail.

This neatly sums up what I propose to the business associations with which I work: prepare short, succinct and compelling policy positions papers, of no more than four pages, clearly built on solid evidence, but don’t try to include all the evidence. The detailed evidence can, instead, be included in a much more extensive research report, which should also review a range of policy options, and the likely implications of each of those options, for the people who need all the detail.

Influencing the US Government – some more

In an earlier note, I mentioned a book by Frank Baumgartner and Beth Leech that looked at the literature on advocacy and lobbying by interest groups. They teamed up up with three other academics in what became a seven year research project utilising some 50 student collaborators to look at key issues pursued by lobbyists in efforts to influence Congress in the period 1998 to 2002.  The book, Lobbying and Policy Change: who wins, who loses and why” was published in 2009. It provides some very interesting insights – though does not cover what they describe as ‘administrative policy making’ which is a shame since much lobbying focuses on precisely that. What is particularly revealing is that most lobbyists do not succeed in changing the status quo and that, on the whole, having more resources does not make it more likely that policy will be changed. Sadly, the research does not look at all at the features or characeristics of (business association) advocates which would have been particularly interesting for those working with business associations in developing countries.