Despite its lingering problems, South Africa’s transition from apartheid to democracy provides many valuable lessons.
This week’s U.S.-Africa Leaders Summit focuses on the topic of “Investing in the Next Generation.” The summit aims to explore issues of economic inclusiveness, democratic development and “creating an enabling environment for the next generation.”
This discussion is especially pertinent in the aftermath of the global financial crisis of 2008, when many in developing countries have begun to lose faith in the wisdom of democratic governance and market-based economic reforms. The rise of Chinese and Russian authoritarianism coupled with robust economic growth in those countries provides a seemingly plausible alternative for lifting millions out of poverty while still allowing autocrats to retain a tight grasp on power.
The Centre for Development and Enterprise (CDE), a South African think tank and CIPE partner, examined the post-apartheid experience of South Africa’s transition to market economy and a vibrant democracy in a recently released report entitled “South Africa and the Pursuit of Inclusive Growth.”
As part of a larger initiative known as the “Democracy Consensus”, CDE’s research shows that democracy is a viable path not only for fostering inclusive economic growth in the short- to medium-term, but also laying the foundations for sound institutions that lead to long-term stability and prosperity.
When the public and private sectors work together to implement necessary economic reforms, entrepreneurs, businesses and citizens benefit from a more prosperous and vibrant democracy. Businesses possess the know-how and detailed knowledge of economic conditions, obstacles, and opportunities for growth, while governments have the means to pass business-friendly legislation. Public-private dialogue helps these two groups work together to arrive at effective policy solution.
Moldova’s National Business Agenda Network (NBA), comprised of more than 30 business associations and chambers of commerce from across the country, positioned itself as a key stakeholder in policymaking. With CIPE’s support, the Institute for Development and Social Initiatives (IDSI) institutionalized a culture of public-private dialogue where it did not exist before and encouraged greater transparency and inclusiveness in setting reform priorities in the areas of tax and customs law.
Find out how the Moldovan business community successfully built an advocacy coalition to work with the government on reform priorities in the recently-released case study “Public-Private Dialogue in Moldova”, part of a forthcoming case collection Strategies for Policy Reform.
Teodora Mihaylova is a Research Assistant at CIPE.
“Enterprise Cities” aim to emulate the success of places like Dubai.
With rates of urbanization increasing, the idea of “Enterprise Cities” is gaining ground as countries to rethink their approach to economic policy and the best strategies to promote broad-based job creation and growth.
Driven by industrialization and the search for better jobs, millions of people are moving from the countryside into cities. This is proving challenges for governments as it creates increased demand for public services and expensive infrastructure projects to meet the needs of citizens. Globalization is also increasing competition among countries to attract multinational companies and foreign direct investment.
Widespread reluctance to implement comprehensive reforms, as well as burdensome legal and regulatory regimes, are impediments to economic growth and entrepreneurship, leaving developing countries in a difficult situation.
Special zones with autonomous regulatory systems that bolster competition and foster the growth of competitive markets are one way to cut through the gridlock and bring prosperity to the burgeoning cities of the developing world.
Recent developments concerning property rights violations and popular riots in Venezuela remind us that democratic and economic development is not always a gradual forward-looking process but instead is characterized by periods of progress as well as setbacks. Separation of powers, property rights, the rule of law, the respect of human rights and the rights of minorities are essential components of a functioning democratic and free market system.
Reflecting on the challenging situation in Venezuela and the business community’s experience of threats to private property rights, Jorge Roig, President of the Venezuelan Federation of Chambers of Commerce FEDECAMARAS, was invited by the Free Enterprise and Democracy Network to share his views in the latest Economic Reform Feature Service article.
The fall of the Berlin Wall marked the end of the bipolar international order that had dominated since the Second World War. In 1989 Eastern European countries gained the freedom to chart their own future and adopt political and economic institutions based on democratic governance and the free market economic system. In the twenty five years of transition, most states in the region have become full-fledged members of the European Union and achieved significant development milestones in their integration in Western institutions.
Reflecting on the transitional experience of Poland, Dr. Andrzej Arendarski, co-founder and president of the Polish Chamber of Commerce, was invited by the Free Enterprise and Democracy Network to share his recollections in the latest issue of CIPE’s Economic Reform Feature Service article.
Dr. Arendarksi explains the important role the Solidarity trade union played during the Polish transition to democracy and reflects on the significance of reducing barriers and regulations to promote the operation of business and encourage entrepreneurship. He describes democracy as more than a political system, “as a process in which nationals learn to be responsible for their choices,” a set of institutions and a state with free media.
To learn more about lessons emerging from the Polish transition to democracy applicable to reforms in other countries, read the article here.
Teodora Mihaylova is a Research Assistant at CIPE.
The private sector is a key actor in efforts to promote economic growth, reform the business climate and strengthen democratic policymaking worldwide. Dialogue is a key part of the Busan process, which recognizes that the for-profit private sector is a central driver of development and emphasizes the importance of inclusive dialogue for building a policy environment conducive to sustainable development.” Businesses possess the know-how of economic conditions, obstacles and opportunities for growth, while governments have the means to pass business-friendly legislation.
From a democratic point of view, a vibrant private contribution to dialogue expands participation in policymaking by creating space for civic engagement in governance, improves the quality of business representation and supplements the performance of democratic institutions.
Building upon its longstanding experience in the field, CIPE has been invited to participate in the 7th Annual Public Private Dialogue Global Workshop organized by the World Bank, BMZ-The German Federal Ministry for Economic Cooperation and Development, and GIZ in Frankfurt, Germany.
Senior Knowledge Manager Kim Bettcher will moderate a session on long term public private dialogue sustainability and the role of chambers of commerce and business associations. Director of Multiregional Programs Anna Nadgrodkiewicz will make a presentation on a new initiative between the CIPE, the World Bank Institute, and development partners on building an open and collaborative platform for public private dialogue resources.
CIPE has extensive experience in advancing policy dialogue around the world and supports market-oriented reform and private sector development by mobilizing representative business associations and strengthening their capacity to advocate for policy solutions. CIPE also invests in business association development that enables effective dialogue. Some regional success stories in public private dialogue are outlined in more detail below.
Some central questions in international development are how to measure progress, make sound cross-country comparisons, and build the case for political and economic reforms. Multilateral institutions such as the World Bank play the role of repositories of credible, accessible, and up-to-date information that serves as an international benchmark for progress. Access to information is the basis for evidence-based policymaking and can serve as a catalyst for necessary reforms.
The World Bank recently convened a conference to present research around its Doing Business index at my alma mater Georgetown University. The keynote speaker, Tim Besley of the London School of Economics, discussed the importance of World Bank data that is publicly available and internationally recognized as a reliable source of evidence-based policymaking.
The Doing Business Survey focuses on two main sets of indicators: regulations and legal institutions. The regulation indicators are the number of procedures, time, and cost involved in starting a business, to obtain a construction permit, getting access to electricity, registering property, paying taxes, and the ability to trade across international borders.