Public Policies: The Art, Science, and Institutionalization


This article originally appeared in Arabic on

As I prepared for the final paper of my college years, I recall my unwavering conviction in the infamous saying by Muhammad Yunus – Founder of Grameen Bank – that, “Once poverty is gone, we’ll need to build museums to display its horrors to future generations.”

Multiple public policies and methods have been devised, yet the primary objective has always remained unchanged: provide citizens with a decent standard of living. This, I believe, can be achieved through paving the way for entrepreneurial initiatives and creating a just and equitable investment environment, where investors, citizens, workers, and employees alike are familiar with their respective rights and obligations.

Over time however, it has become increasingly apparent to me that any practice devoid of theory would be blind, and any theory without practice would be deemed hollow. During the few years of my engagement with the reform process I drew a number of important lessons that I would like to share.

1. Outcomes of efforts in the public policy domain are difficult to quantify using short-term indicators

Contrary to other disciplines – such as engineering, accounting, trade, commerce, and medicine – the outcomes of public policy work are not immediate. For instance, support for entrepreneurship in a country such as Egypt cannot occur overnight, especially in light of an economic milieu where it is difficult to participate in the market, and lacks a just mechanism for filing for bankruptcy or completing a successful market exit. This is in addition to the absence of real and tangible funding tools, coupled with the deterioration of education. Having said this, however, it is imperative to make a start somewhere. The continuity of these efforts and the relentless resumption of reforms must not be abandoned. The status of entrepreneurship in Egypt today –though it falls short of fulfilling aspirations on many different levels – is still considered much better than what it was several years previously. At least today, there is some knowledge and understanding of the concept of entrepreneurship and its correlation with institutional reform. Sound initiatives are coming to light every day, and are expected to result in cumulative change.

In short, efforts exerted in the public policy domain are cumulative and cannot be measured by short-term indicators, thus one should not be frustrated or discouraged. The challenge lies, however, in conducting assessments and gauging impact in order to develop reform strategies and to avoid committing the same errors, while expecting different outcomes.

2. The social contract binding the state to its citizens is reflected in all aspects of life, including the economy

Citizenship is not just a political concept, it constitutes the core of the economic reform process in the sense that in some developing countries (e.g. Egypt), the social contract is based on guardianship and not citizenship. This means that the state assists its people by rationing food, housing, health, and education in return for their compliance to state dictation. The end result being: poor quality of public services, owed to the state’s goal of expanding its production activities and hence negatively impacting the growth of the public sector and compromising the creation of employment and operation opportunities. Over time, state expenses will overcome revenues, leading to the deterioration of public services and to that state becoming prone to a series of interrelated and complex ailments.
In contrast, and in the case of states that are founded on the basis of citizenship, we find that at the core of the social contract lie rights and obligations. This contract obligates the state to assume the role of an effective regulator and legislator and to oversee the efficient enforcement of these laws and pieces of legislation in a manner that safeguards upholding the regulation of market transactions – such as the protection of consumers and competition and the prohibition of monopolistic practices, etc. A state of this kind should be able to pave the way for citizens to allow them to invest by creating a competitive environment that would ultimately enhance economic growth. A state that does not abandon those citizens unable to work, by assisting those in need of support instead of rationing goods—a practice that is prone to aggravating corruption. Finally, a state that is able to collect due taxes is the cornerstone of the rights and obligations system.

3. There is no one-size-fits-all solution

Though the reform process is multi-faceted and primarily built on local trials and experiences, it can still benefit from global input and expertise. With this said, one must bear in mind that what may prove successful in Latin America may not necessarily bear fruition in East Asia, since local expertise and social capital must be the prime determinants of a locally-driven reform strategy. For example, when tackling an issue such as the informal economy in Egypt, some may suggest registering all entities operating within that sector in order to improve economic indicators. However, in practice, it might become apparent that the dilemma of reforming the informal sector in Egypt does not lie with registration, but instead revolves around a more precarious phenomenon – parallel institutions in various areas including education, health, transport, and the economy. In this sense, any reform that fails to accommodate these parallel institutions won’t work. Incidentally, not all practices in these parallel institutions are detrimental. Those few positive practices must be codified and capitalized upon in the formal domain, while the exclusionary ones must be tackled – occasionally through penalization and suspension, but more frequently via incentives.

In conclusion, to summarize the lessons in this article in one phrase: “Institutions are the solution.” However, the creation of institutions is a long-term process that is not merely limited to changing public policies, but also involves changing practices and taking the social structure into consideration while doing so.

Seif El-Khawanky is a Program Officer for CIPE Egypt

Democracy that Delivers Podcast #39: András Lőke on the State of Democracy in Hungary


Podcast guest Andras Loke

This week on the Democracy that Delivers podcast, President of Transparency International Hungary, András Lőke, discusses the state of democracy in Hungary and the hard work it takes to maintain that system over time. He also discusses the cultural differences between countries in Central Europe and how culture can influence democratic development. Lőke is also founder and editor-in-chief of, a group of websites covering 23 Budapest neighborhoods that receives 800,000 unique visitors a month. He speaks about the  government’s influence on the media. Lőke also talks about how corruption undermines democracy and the “economy within the economy” that institutionalizes corruption in Hungary.

Lőke recently spoke at the conference The Illiberal Turn?: Reasserting Democratic Values in Central and Eastern Europe. The conference was co-hosted by CIPE with the Atlantic Council, the International Republican Institute, the National Democratic Institute, and Radio Free Europe/Radio Liberty. You can conference presentations and panel discussions on the Atlantic Council website.

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Trade Facilitation Helps Developing Countries Get a Leg Up


By Lindsey Klaassen

This piece originally appeared on the U.S. Chamber of Commerce Above the Fold blog

Developing countries tend to experience higher costs to trade and are ill-equipped to navigate through the mire of international border requirements. The World Trade Organization (WTO) established the Trade Facilitation Agreement (TFA) in part to address this very challenge.

The TFA is unique in several respects, as it was the first multilateral trade agreement set forth by the WTO, and it was intentionally designed to make cross-border trade easier for developing countries. Once fully implemented, it is estimated that the TFA will reduce trade costs by up to 15 percent for developing countries and increase global merchandise exports by up to $1 trillion annually by increasing customs efficiency and cutting red tape that impedes the efficient flow of goods at the border.

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Supporting Women’s Economic Empowerment through Women’s Chambers of Commerce

Women from the Papua New Guinea Women’s Chamber of Commerce and Industry participating in a capacity building workshop

Women from the Papua New Guinea Women’s Chamber of Commerce and Industry participating in a capacity building workshop

Since its creation in 1983, CIPE has been working with business associations, chambers of commerce and economic think tanks around the world to promote institutional reforms and advance economic and political empowerment.

Women business associations are one type of business associations that CIPE has partnered with in order to support the economic empowerment of women. Recognizing the unique role such organizations play, CIPE has focused on strengthening women business associations and thus empowering women to become entrepreneurs and leaders in their local communities and countries.

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Democracy that Delivers Podcast #38: The Rapid-Reaction Anti-Corruption Project

Discussion moderator Christian Caryl with panelists Carl Gershman, Sarah Chayes and Eric Hontz at the Rapid Reaction Anti-Corruption Project event on September 16, 2016.

Discussion moderator Christian Caryl with panelists Carl Gershman, Sarah Chayes and Eric Hontz at the Rapid Reaction Anti-Corruption Project event.

On September 16, 2016, CIPE hosted a panel discussion on the need for rapid response in countries where a significant opportunity has appeared for achieving anti-corruption progress. CIPE’s Rapid Reaction Anti-Corruption Project is designed to address this need by deploying a team of anti-corruption experts with international stature to countries in transition. The experts, with NGO, business, and law enforcement backgrounds, would be swiftly deployed to countries which have governments newly empowered to address corruption, and a strong economic interest from foreign firms previously repelled by corruption risk.

Today’s podcast is a recording of the event at which experts discussed corruption challenges and practical solutions. The event was opened by CIPE Managing Director Andrew Wilson [then Executive Director (acting)] and was moderated by Chrstian Caryl, Editor of the Foreign Policy Democracy Lab blog.

Panel speakers included President of the National Endowment for Democracy Carl Gershman;  Senior Associate at the Carnegie Endowment for National Peace Sarah Chayes, and author of Thieves of State: Why Corruption Threatens Global Security Sarah Chayes; and CIPE Program Officer for Ukraine, Russia and Central Asia Eric Hontz.

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Trade Facilitation in the Trans-Pacific Partnership


By Michael Merriam

In recent months, research on global trade has been divided over the effects of a long negotiated trade partnership for twelve Pacific Rim nations. Signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, the Trans-Pacific Partnership (TPP) is, by GDP of signatory nations, the largest free trade pact in the history of the world. With many standards and provisions, the agreement’s depths contain articles that deal with a variety of subjects ranging from intellectual property rights to environmental protection. According to the Office of the U.S. Trade Representative, there will be 18,000 different taxes on American products that will be reduced or eliminated by adoption of the TPP. Beyond the benefits to the United States, the increased trade promotion and tariff reduction of the TPP promises to advance job creation, good governance, trade competitiveness, and stable economic growth on both sides of the pacific. Most significantly, the TPP incorporates greater trade facilitation requirements than past regional trade pacts, a hopeful sign for the future of global trade.

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Democracy that Delivers Podcast #37: Andrea Franzoso on Exposing Corruption in one of Italy’s top Transportation Companies

Podcast guest Andrea Fransozo

Podcast guest Andrea Fransozo

On the Democracy that Delivers podcast this week, Italian whistleblower Andrea Franzoso talks about the difficult decision he made to expose corruption in his company and the impact this had on his personal and professional life. Franzoso discusses how he came across evidence of wrongdoing by the company’s president, the reaction to his revelations internally, and his eventual decision to take his findings to the police. His story is both inspiring and troubling as he shares the professional and personal cost of his decision. The conversation also covers what companies and governments can do to better protect whistleblowers and encourage a culture of accountability and transparency.

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