Tag Archives: institutions

Public Policies: The Art, Science, and Institutionalization


This article originally appeared in Arabic on cipe-arabia.org

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 www.Ittlakunk.hu, 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.

Want to hear more? Listen to previous podcasts at CIPE.org/podcast.

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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.

Like what you heard? Listen to previous podcasts at: http://www.cipe.org/podcast

Crunch Time for Egypt’s Economic Reform

via Wikimedia Commons

via Wikimedia Commons

This blog originally appeared in Arabic on CIPE-Arabia.org

Indeed, Egypt is going through a very difficult period. The current economic situation is intrinsically linked to the accumulated weight of poorly addressed economic challenges over the past forty years.  Economic problems were either ignored, or in other instances, their root causes were not addressed in a profound and decisive manner.  On the other hand, undoubtedly, Egypt has all the capabilities to become one of the largest world economies.  This potential has been noted in reports of financial institutions such as the 2010 Citibank report.

The current difficulty stems from fact that there is no alternative to undertaking a comprehensive economic reform program. However, in the short run all Egyptians- the wealthy, the poor, and the middle class, will have to bear the brunt of these reforms. That said, with sound management of reform program, Egyptians will enjoy the fruits of reform in the medium to long run.

There can be no doubt that enacting economic reforms is crucial for Egypt’s progress. Thus, “No,” is my final unequivocal answer to the most critical question of whether Egypt has other alternatives to entering into the loan agreement with the International Monetary Fund (IMF).

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A Seat in the Limousine

From Left: CIPE Chair Greg Lebedev, with discussion moderator Andrew Wilson, and speakers Alicia Phillips Mandaville, Chris Maloney, and Beth Tritter at the Democracy and Governance event on September 15, 2016.

From Left: CIPE Chair Greg Lebedev, with discussion moderator Andrew Wilson, and speakers Alicia Phillips Mandaville, Chris Maloney, and Beth Tritter at the Democracy and Governance event on September 15, 2016.

Democratic governance and development go hand in hand. Transparency and the rule of law provided by well-functioning democracies create favorable business environments where firms of all sectors and sizes can thrive. In turn, inclusive economic growth lifts populations out of poverty and strengthens public expectations of accountability. To celebrate the International Day of Democracy, CIPE and the Millennium Challenge Corporation (MCC) held a joint event on September 15, titled “Democracy and Governance: Key Foundations to Sustainable Development.”

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Democracy that Delivers Podcast #32: Gina Chon on Economic News from Around the World

Podcast guest Gina Chon (left) with hosts Julie Johnson and Ken Jaques.

Podcast guest Gina Chon (left) with hosts Julie Johnson and Ken Jaques.

On the Democracy That Delivers podcast this week, Thomson Reuters Breakingviews correspondent Gina Chon talks about reporting on economic news from around the world. Chon discusses the challenges journalists face in countries where gaining access to accurate economic information is difficult and where authoritarian governments attempt to control the news on the economy. Chon also talks about how she became a journalist, her experiences working overseas, and what excites her about the way journalism is evolving today.

Follow Gina on Twitter at @GinaChon.

Also, watch a video of Chon participating as a panelist at a CIPE event on The State of Journalism Globally: How Authoritarian Regimes Control Information.