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- The process of globalization and increased rates of urbanization are forcing countries to rethink their approach to economic policy.
- Widespread reluctance to implement comprehensive reforms and burdensome legal and regulatory regimes are impediments to economic growth and entrepreneurship.
- Enterprise Cities, akin to free trade zones, are one possible solution to this problem. These are special jurisdictions with investor-friendly legal and regulatory policies that create the pre-conditions for entrepreneurship and stimulate competition-based growth.
No amount of resources transferred to developing countries can compensate for the negative effects of bad governance on development. Good governance, typified by consistent and transparent practices regarding acceptable interaction between governmental and private actors in economic, social and political life, allows the public to provide input into the policy process through regular channels. Democratic governance enhances the legitimacy of government decisions in the eyes of the public, and it also creates a more stable and attractive climate for investment and makes economic development possible.Read more...
Speculative investors pose a threat to the implementation of corporate governance reforms because they often disregard good corporate governance in their investment decision process. Therefore, companies in markets dominated by speculative investors have little incentive to spend valuable resources on implementing good governance. An analysis of the investment market in Russia shows that its main players are speculative foreign and Russian portfolio investors who seek to invest in seriously undervalued assets with a high potential for short-term growth. This category of investors seeks high returns through significant growth in stock price and is willing to assume big risks, including bad corporate governance. In this situation, companies have very little hope of getting any significant additional premium for any improvements in corporate governance from speculative portfolio investors. Such investors will continue to recommend improvements in corporate governance, but they will not be inclined to pay a significant premium for such improvements.Read more...
Business associations and chambers of commerce in all parts of the world share a common mission to promote, develop, and further the economic well-being of member companies by providing a collective voice in advocacy for members’ interests, as well as providing quality services to help members enhance their competitiveness and succeed in their businesses locally and abroad. However, the institutional problems of some associations damage their ability to represent their constituent members. Low membership, poor financial management, and non-acceptance by governments are all factors which limit their effectiveness. The International Chamber of Commerce, now in its eighty-fifth year, helps businesses and associations overcome these challenges and facilitate international commerce and openness.Read more...
At the end of 2003, President Putin signed into law an extension granting Russian enterprises an additional two years to purchase (or lease) the land on which they stand. Putin’s last minute reprieve, however, came with the expectation that Russian business would assume a greater role in addressing the social needs of their employees and the community at large. Putin’s implicit offer of land in exchange for the performance of public service resonates with Russia’s autocratic past and its traditional, more limited understanding of property rights. Paradoxically, Putin’s government also remains the single largest promoter of private property, often in the face of fierce regional opposition. Nevertheless, Putin’s recent statements, especially when viewed through the prism of the Yukos affair, raise serious questions about what sort of property rights will accompany any land sales.Read more...
Last November’s fraudulent elections in Georgia triggered popular protests which led to the removal of President Eduard Shevardnadze. Protest leader Mikheil Saakashvili was subsequently elected president and began his tenure by proposing a set of amendments to the Georgian Constitution which were quickly approved with little debate. However, the amendments lacked the support of key democratic groups in Georgian civil society which had also opposed Shevardnadze. Ostensibly, the amendments strengthened the role of the Parliament, but in reality the amendments make the Prime Minister’s authority reliant on the President (not the Parliament) and eliminate most means through which the legislature can influence the executive branch.Read more...
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CIPE welcomes articles submitted by readers. Most articles run between 3-7 pages (1000-3000 words), but all submissions relevant to CIPE's mission of building accountable, democratic institutions through market-oriented reform will be considered based on merit. Economic Reform Feature Service articles are primarily geared toward an international, non-academic community of businesspeople, economic reformers, and policy-makers. Specific policy recommendations and articles based on direct experience are encouraged. In addition to articles, we are willing to adapt suitable lectures, speeches, research notes, and academic papers.
Articles should be sent to: firstname.lastname@example.org.