Tag Archives: transition

The Need for Constitutional Protection of Private Enterprise


Constitutions can play an important role in protecting economic liberties, in addition to political liberties. As the state’s foundational legal document, the constitution can provide the essential framework for establishing commercial freedom and promoting the development of the private sector. For example, CIPE partner the Syrian Economic Forum (SEF) is developing proposals for the constitutional protection of private enterprise during a future transition period in Syria.

Different countries have taken a variety of approaches in tailoring their constitutions accordingly, which should be examined in determining how Syria’s next constitution will promote and protect private enterprise.

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Combating Corruption in Transition Countries

The transition to democracy is a moment of great hope and opportunity for any country. Unfortunately, even when the movement for democracy was driven by the corruption of the old regime, the transition does not immediately solve the problem.

Writing in the Huffington Post, CIPE Executive Director John D. Sullivan argues that it is important to see corruption not just as a moral problem but as an institutional problem. And changing institutions is hard work that can take time.

“Successfully fighting corruption in transitions requires collective action of engaged citizens through associations, civil society groups, think tanks and other groups,” he writes. “Providing assistance to these organizations in the form of technical, management and even financial assistance can help foster a successful transition.”

While fighting corruption in countries in transition requires the engagement of broad sections of society, one area that is often overlooked is the private sector. This diverse group — including small businesses and entrepreneurs, large national companies, and the many enterprises that work informally — has an important role to play. Though some parts of the private sector may have little desire for reform, the less politically connected firms and small businesspeople are often among the main victims of corruption, making them important allies in this fight.

Read the whole article at the Huffington Post.


Former Finance Minister on Philippines Transition to Democracy

Moving from a dictatorship to a democracy was not easy for the Philippines. It was a long and painful process due to corruption, doubt, financial issues, distrust of the government, and the absence of rule of law.

More than two decades after the “People Power” movement ousted the Marcos dictatorship in 1986, the Philippines continues to make progress. In the latest Corruption Perceptions Index report for 2012, the country moved up 24 points (to 105th out of 176) from its rank in 2011 (129th out of 183) — a tremendous leap compared to rank improvements in previous years.

CIPE recently had the honor to invite Dr. Jesus Estanislao to speak about economic reform during the Philippines’ transition to democracy. With his professional background and personal experience helping to guide the transition, Dr. Estanislao offers a unique perspective on economic reform and institution building in the Philippines.

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The Philippine Experience in Transition

Dr. Estanislao speaks at a conference in Yemen. (Photo: Staff)

“A transition is a tremendous undertaking but it is a greater challenge to make that transition work.” Dr. Jesus Estanislao was a leader at the time of the “people power revolution” in 1986, served in the administration of President Corazon Aquino, and has continued building governance in the Philippines to this day. His experience as a pioneer in government and civil society brings valuable perspectives on different dimensions of democratic transition: from crisis management to long-term institution building; from economic to political and social decision making; and across all levels of society.

Dr. Estanislao generously shared his advice with civic and business leaders across the Middle East at CIPE workshops in March 2012. These Arab leaders found the Philippine experience to be remarkably relevant and compelling, so we captured Dr. Estanislao’s contribution for CIPE’s Economic Reform Feature Service. Key lessons include the need for a long-term vision, the importance of institution building, and anunderstanding of democratic governance as a process of citizen participation and responsible citizenship.

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Democracy’s Fourth Wave?

Much has been written and said about the ongoing public uprisings in the Middle East and implications for democracy in the region. In a recent article in the New Republic, Carl Gershman, President of the National Endowment for Democracy, goes beyond the Middle East and ponders the global implications of these uprisings. Are we seeing the fourth wave of democracy develop before our own eyes?

As Gershman notes, one of the most interesting things about Mideast uprisings has been the fact that peaceful pro-democracy protests began to take place where most people least expected them. While the world’s attention was focused on Russia, Venezuela, Belarus, Iran, Cuba, Bolivia, North Korea, and other places where civil society strives for very basic freedoms, few had thought of even a possibility of the fundamental changes we are seeing today in the Middle East.

And as the changes are taking place, there are several reasons, according to Gershman, that current events will give rise to the fourth wave of democracy:

  • We are seeing that democracy is indeed a universal value, and “Arab exceptionalism” theory does not hold ground.
  • The majority of people in the Middle East, just as in other parts of the world, prefer democracy as the best form of government, according to public opinion surveys.
  • Autocratic governments are less stable than people think they are, especially given the expansion of new communication technologies and social networking that provide people with new means to expose corruption and push for freedom of expression.

In other words, transitions and demands for change in the Middle East should not have been unexpected – they are simply an expression of people’s deep rooted preference for democracy. They are likely to inspire others around the world, at least in showing that change is possible even when few expect it.

Yet, Gershman cautions, countries in the Middle East should prepare for a difficult road ahead – although they possess the energy and euphoria of change, the reality is that reform is never easy and democratic success is never guaranteed. To make that success a reality, several lessons from other transitions are key and among those, two stand out:

  • Developing a national dialogue and negotiation on reform is a prerequisite of success
  • The process for developing a new constitution is not as important as ensuring that it happens transparently and that the public has the opportunity to comment and provide input

But most importantly, when it comes to political reform, one can’t view it in isolation from economic change – something people tend to do in all corners of the world. Economic reform, says Gershman,

…must proceed in tandem with democratic political change. Political reform by itself is not enough. If democracy does not deliver for the people and continues to serve just the interests of entrenched elites that have dominated the economy for decades, public disillusionment and anger will reemerge and produce more upheaval. The answer is not economic populism which will not produce jobs and opportunity. The solution lies in fundamental institutional reform, including changes in the educational system to raise labor productivity and provide young people with the skills needed to compete in a global economy.

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A second priority will be removing barriers to entrepreneurship that have forced more than 80 percent of Egyptian businesses into the informal, extra-legal sector. This will require regulatory reform, the protection of property rights and contract enforcement, and changes in antiquated bankruptcy laws that inhibit risk-taking, all of which will require reform of the judicial system. The problem of corruption will also have to be addressed by building broad coalitions of business and civil society to ensure transparency and accountability in decision-making.

And bringing it back to the importance of civil society

This, in turn, will require a new opening for freedom of association—for business associations and trade unions as well as NGOs—which is the crucial link between democratic political change and economic reform. Building an inclusive economic and political system is a tall order, and it will not happen quickly. But it’s necessary to get started now.

Civil society is already leading the way. Just a few weeks ago, ahead of the constitutional referendum, at the request of the independent Egyptian daily Al Masry Al Youm CIPE helped organize a policy forum on constitution reform, which brought together more than 420 representatives of business associations, political parties, youth and other opposition movements, think tanks, media outlets, and academia to discuss the referendum that took place over the weekend. The participants came out with their own statement on proposed constitutional changes.

This is just one of the many examples of how countries in the Middle East are beginning to experience democracy. Democracy is not only about majority rule or winning elections. It is about dialogue, give-and-take, negotiations, reaching consensus, and necessary reforms that move countries forward and create societies that deliver benefits for all, not just the elites.  Expectations are high in the Middle East, and its up to reformers in the region to meet those expectations and provide inspiration for the rest of the world.