Highlights of CIPE Impact on Democratic Development

Where and how has the Center for International Private Enterprise made a difference in democratic development? In the last few years alone, the positive impact of CIPE’s programs has been felt across the globe, from countries on the threshold of democratic consolidation – like Argentina, Romania, and Ukraine – to places just beginning their journey – like Afghanistan, Belarus, and Iraq. These programs have defended freedoms, strengthened civil society, broadened debate, and built consensus for reform. They have advanced these goals by transforming ideas and institutions; by engaging the private sector in the cause of democracy and equipping it for success. Of course, CIPE has not done all this unaided. Funding by the National Endowment for Democracy has nurtured programs designed and led by local partners, with technical and strategic assistance from CIPE.

Policy reforms are perhaps the most tangible successes, since they represent the culmination of advocacy campaigns and the basis of sustainable democratic institutions. CIPE and its partners have been directly involved with several momentous policy changes. Now, Pakistan has a new Trade Organisations Ordinance that grants women the freedom to form trade associations without male sponsorship. Kyrgyzstan’s new Constitution – drafted by civil society leaders – strengthens the hand of Parliament versus an over-powerful executive. In Guatemala, a law on titling and land registration has begun to bring indigenous communities into the formal economy. Two new laws in Colombia serve to prevent corruption in public procurement and protect minority shareholders’ rights. Numerous legal and regulatory changes worldwide have made it easier to open and operate businesses, promoting economic growth and employment along with an independent, pluralistic private sector.

Policies matter, but can only be effective when enmeshed in a system of good governance. Laws must be enforced consistently and impartially. CIPE partner Akcioner defended shareholders’ rights in court cases that ruled in favor of shareholders for the first time in Macedonia’s history. The Belarusian Constitutional Court upheld the position of the Minsk Union of Entrepreneurs and Employers that entrepreneurs cannot be fined for violating laws that have not been made fully accessible to the public. Government must also be held accountable. The Institute for Competitive Society developed an innovative method for monitoring Ukrainian government agencies’ websites for compliance with the Regulatory Policy Law. Finally, the way that laws are made matters in a democracy. Kazakhstan has mandated input from business representatives on legislation that affects businesses.

Participation brings life to democracy, and representation opens channels for participation. The Institute for Solidarity in Asia mobilized more than 50 student groups and 11 civil society organizations across the Philippines to construct the groups’ visions of good governance, working with city governments to translate these visions into concrete initiatives. Romanian businesswomen obtained a seat at the table in high-level policymaking by uniting their associations in a national coalition. The Argentinian think tank CIPPEC involved the business sector in fiscal policymaking through the creation of an innovative caucus composed of legislators, business leaders, and academic experts. Representatives of Iraqi political parties learned from CIPE how to reach out to voters on economic issues and take private sector considerations into account. In Bulgaria, the Center for the Study of Democracy brought large and small business interests into democratic governance by founding a public-private economic council for the city of Sofia.

At its core, democracy rests on certain values – namely fairness, transparency, accountability, and responsibility. In many countries, CIPE has led the way in explaining these values and their significance for political and economic reform. CIPE initiated a conceptual shift in the Middle East through the invention and promotion of the first term in Arabic for “corporate governance” – hawkamat asharikat – that captures these values. CIPE has helped shape the world’s understanding of corruption, especially as it applies to the private sector. Working with Transparency International, CIPE promoted the Business Principles for Countering Bribery, now incorporated as the 10th principle in the U.N. Global Compact. In Mozambique, CIPE partner the Commercial and Industrial Association of Sofala has overturned the conventional thinking that corruption is a normal part of doing business, and has prompted companies to openly discuss legal and ethical guidelines in business transactions.

Many of these achievements would not have been possible without the investment of CIPE and the National Endowment for Democracy in the capacity of voluntary private sector organizations and the human capital of future reform leaders. This investment prepared these organizations to conduct highly effective advocacy and, ultimately, to sustain future initiatives without foreign assistance. Romania’s Coalition of Women’s Business Associations provides an excellent example of a strong, sustainable partner organization that is now achieving policy results on its own. The Afghanistan International Chamber of Commerce has grown at an impressive rate, accepting more than 20 member associations since it was founded in 2004. Its numerical strength has helped the chamber establish fruitful relations with President Karzai’s administration. Iraq’s business community is also well-situated to represent its needs after the unification of diverse associations, chambers, and think tanks in the Iraqi Business Council. These strong foundations are expected to lead to cumulative advocacy successes.

Democracy is not achieved overnight, but rather as the outcome of unceasing efforts by local citizens to shape the key elements of democratic governance. Taken together, the impact of CIPE’s and its partners’ programs on policy, behavior, values, and civil society has advanced the development of democratic societies with free market economies.

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