In Romania during the early 2000s, an alliance of information and communications technology (ICT) business associations formed the Tech 21 Coalition, which developed a business agenda offering practical solutions to barriers facing the industry. Their efforts resulted in a dialogue with the government that produced reforms such as introduction of a zero salary tax on software developers to prevent brain drain. Following implementation of these reforms, Romania ICT companies created 1,500 jobs within 18 months, and significantly enhanced the competitiveness of the Romanian ICT sector.
Reform of the business environment is increasingly recognized as an important means of increasing the economic potential of emerging market economies while making inroads towards increased government accountability and transparency. Yet, even when governments support such measures, they are often ill-equipped to make the right kinds of policy decisions. This is especially true for reforms affecting cutting-edge sectors, such as ICT. In a paper recently published by the World Bank Institute entitled “The Power of Business Advocacy and ICT Reforms”, CIPE Regional Office Program Director Camelia Bulat and WBI consultant Kathrin Frauscher argue that advocacy by business organizations is essential to the success of such reforms.
Bulat and Frausher note that building a competitive ICT industry presents a challenge for countries with developing market economies, such as those of post-Communist Europe. They cite multiple examples of countries in which business organizations have formed successful partnerships with state governments to produce policies aimed at increasing the competitiveness and viability of the ICT sector.
The paper demonstrates that, while business advocacy groups must sometimes take a confrontational approach in their relationship with governments, the most effective arrangement for bringing about reform is one of partnership. When policy makers are open to reforms, the business community can provide crucial insights and guidance which not only enhances the success of these reforms but also contributes to the development of a more inclusive and democratic policymaking process. The full paper can be found on the World Bank Institute website.
Published Date: December 11, 2009