This past week, CIPE’s Cairo field office worked with partners Federation of Economic Development Associations (FEDA) and United Group to facilitate a conference on “Combating Corruption between the State and the Society.” The event was intended to summarize the lessons learned and experience gained by CIPE and its partners since 2008 under CIPE Egypt’s U.S. Agency for International Development- funded Combating Corruption and Promoting Transparency program, and to lay the groundwork for the newly-funded, two-year next phase of the initiative.
Of particular interest to the approximately 120 Egyptians present were two panelists who telecasted in from our Washington, DC office to share their perceptions of the “implementation gap” in Egyptian governance.
Marko Tomicic, a manager at the innovative transparency, governance, and corruption research organization Global Integrity, encouraged the audience to shy away from the conventional reliance on ranking indexes to understand the relative successes and failures of a country, and in particular, their own country.
Tomicic explored the need for those assessing progress to be more receptive to the possibility that innovation and deterioration in governance and implementation can come from anywhere on the global line-up. Such classifications, Tomicic argued, inadvertently imply that countries are following a straight path when climbing the rungs of an evaluation ladder. In fact, a country like Kenya has tied Germany in terms of a citizen’s legal right to request information and actually surpassed Germany in terms of the Kenyan legal framework assessment, despite the fact that Germany has outshone Kenya in terms of implementation of the legal framework. Such accomplishments can be overshadowed by many less-dimensional rating systems — a lapse in comprehension that can prove detrimental to the momentum of cooperation and change.
Tomicic referred to Global Integrity’s Egypt (2010) scorecard, which was researched prior to the 2011 revolution yet still signaled deterioration regarding anti-corruption and transparency performance. Participant concern for Egypt’s relatively low implementation gap rating was addressed by explaining the context in which the scorecard more appropriately positions Egypt in relation to other transition countries such as the Philippines, which struggles to implement a comparatively advanced legal framework.
Many audience members conveyed a sense of hopelessness and frustration about the current situation in Egypt — that the system felt broken. Such sentiment is a common theme in transition countries, and Tomicic predicted more disappointment would unfold in the short term. The second panelist, CIPE Global Senior Program Officer Anna Nadgrodkiewicz, offered several concrete starting points for reformers to consider when faced with the overwhelming task of evolving a nation’s system. Nadgrodkiewicz emphasized a narrow focus on specific issues that have maintained grassroots support and ownership. She urged reformers to stay positive by considering the incentive structures and contexts that have remained intact. Performing a realistic assessment of societal capabilities will determine where the springboard for action lies: if the possibility for transformation at the national level is ambiguous, reformers should shift efforts to a different stage that stands a better chance for success, such as in regional, provincial, or municipal settings.
Tomicic noted that the unheard voices of a largely rural Egypt are a vast resource for understanding corruption and could aid in such an assessment. Implementation is contingent upon a spectrum of enforcement that varies among societal contexts, and Tomicic cited a lack of technological access in rural areas as a gap in understanding the implementation gap, so to speak.
In addition, Nadgrodkiewicz suggested that it is possible a comprehensive debate of contentious issues has not yet begun. She pointed to an example in her home country, Poland, where the term “whistleblower” had not yet been coined after Poland transitioned. In order for Polish policymakers to move forward, she argued, the very foundation on which discussion could occur would have to be updated.
The speakers also discussed the integration of Egypt’s sizable informal sector into the formal economy, a problem faced by many economies. Despite recent crackdowns by Egyptian President Mohamed Morsi, informal employment still comprises of between 20-50 percent of the total economy and the informal sector remains plagued with corruption. In tackling such an immense issue, Nadgrodkiewicz explained that it is important to first understand what the informal sector is and why it exists in a particular economy, and then seek practical approaches to formalization. She pointed to CIPE Partner Hernando de Soto’s work on the Egyptian economy as a detailed example of recent investigation into this issue.
In his most recent article in the Wall Street Journal, de Soto and his organization, the Peruvian-based Institute for Liberty and Democracy, discuss their research on Egypt’s extralegal economy, which they deem to be worth a jaw-dropping $350 billion. Yet accessing such a wealth is greatly hindered by the difficulty of formalization: de Soto and his team determined that opening a small bakery would take over 500 days, involving interactions with 56 government agencies and repetitive government inspections. Additionally, it can take over 10 years to legally own a vacant piece of land and establish personal capital necessary to support business expansion. As a result, the 5-year study found that “82 percent of businesses and 92 percent of land holdings were unrecorded and thus unprotected by the rule of law.” De Soto argues that without the potential to realistically register their businesses and own capital to support their growth, entrepreneurial Egyptians are forced to remain informal.
Nadgrodkiewicz also recommended the audience review a CIPE publication, Improving Public Governance: Closing the Implementation Gap Between Law and Practice, which is a collaborative effort with Global Integrity to aid in a clear appraisal of a country’s implementation gap. Read more about the guidebook and closing the implementation gap here.
To learn more, view the conference here via ONTV, an independent satellite channel started by Orascom founder Naguib Sawiras that is home to two of Egypt’s most-watched talk shows.
Rogan Motis is Program Assistant for the Middle East & North Africa at CIPE.