STATE OF THE ART The Imperative of Good Governance ... · STATE OF THE ART The Imperative of Good...

STATE OF THE ART The Imperative of Good Governance:

Economic Reform, Political Will, Incentives, & Capacities for Meaningful Participation

------------------------------------------ Dr. Noha El-Mikawy, Senior Research Fellow, Center for Development Research ZEF, University of Bonn

ZEF Projekt: Verbesserung der Wirtschaftsgesetzgebung in arabischen Ländern (überregionales Forschungsvorhaben), Januar 2005

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Table of Contents

INTRODUCTION ........................................................................................................ 3

1. SYNERGIES AND SEQUENCES OF ECONOMIC AND ....................................... 3

POLITICAL DEVELOPMENT .................................................................................... 3

1.1 The Economic Imperative ................................................................................. 5

1.2 The Imperative of Participation & its Political Economic Context ...................... 6

1.3 Empowerment as a Developmental Imperative................................................. 8

1.4 The Arab Context .............................................................................................. 9

2. GOOD GOVERNANCE INTRODUCES FUNCTIONAL BENCHMARKS? .......... 12

3. THE IMPORTANCE OF POLITICAL MANAGEMENT......................................... 14

3.1 The Issue of Political Will ................................................................................ 15

3.2 The Issue of Incentives ................................................................................... 16

3.3 The Issue of Transparency: On Data, Information and knowledge ................. 16

4. IMPLICATIONS FOR DEVELOPMENT POLICY ................................................. 17

Annex 1: Selection of Governance Activities in Egypt........................................... 19

Annex 2: Selection of Governance Activities in Jordan......................................... 24

Annex 3: Selection of Governance Activities in Morocco ...................................... 28

Annex 4: Selection of Governance Activities in the Arab Region .......................... 31

Bibliography .......................................................................................................... 33

Selected Links....................................................................................................... 36


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INTRODUCTION The issue of democratizing the Arab world is not one of introducing the franchise (though

universal suffrage is still an issue in some Arab states) nor is it one of introducing political

parties (though they are lacking in some Arab States and weak in others). The necessity of

these basic democratic institutions and structures is not contested. What is controversial,

however, is the process of transforming power structures and democratic mechanisms of

control (e.g. elections and parliaments) in such as a way as to make them transparent,

accountable and participative in a sustainable and equitable way.

In this chapter, we trace the development in the concepts that govern the art of studying

processes of reform towards more open economic systems and more accountable and

inclusive polities. We start by tracing the developments of the tension between economic

and political transitions and then move to trace the developments of the concept of good

governance as well as its practice in development policy. Our survey of the state of the art

will demonstrate the need to address issues of accountability and inclusiveness with an eye

on the political and economic incentive structure as well as on the disparities of resources

and of information that are embedded in reform processes.

1. SYNERGIES AND SEQUENCES OF ECONOMIC AND POLITICAL DEVELOPMENT

Our knowledge about the synergies of economic and political liberalization has increased

over the past 25 years due to a rich variety of regional experiments. Several countries in

southern Europe (1970s), Latin America, Eastern Europe (1980s), the former Soviet Union

and the Middle East (1990s) have begun to open their markets for domestic and foreign

competition, to deregulate production relations and to reduce government intervention.

Those were also cases of varying degrees of political liberalization (relative expansion of

freedom of expression and organization and careful adoption of democratic procedures of

governance).

Yet all these cases have not conclusively clarified whether political and economic

liberalization reinforce each other and if so, in which way? The difficulty here is more an

issue of measurement than of normative philosophy. Normatively there is a yearning for

democracy irrespective of its economic consequences. Mancur Olson (1993) and O’Donnell

(2002) remarked on the universal “moral appeal of democracy” which was not matched by a

similar universal belief in democracy’s economic benefits. There have been, nevertheless,

several attempts to establish positive correlations between democracy and economic


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development. However, a lot of correlations that tried to establish such a relationship have to

be consumed with care because much depends on definitions. Those who define economic

performance as growth (Robert Barro, 1996 & 1998) argue that democracy and growth have

a curvilinear relationship: some democracy is good for economic activity but more of it

hinders growth. Those who define economic development as equal provision of public goods

agree on the need for democracy to guarantee effective provision. But, again, it is not quite

clear which type of democracy and with which degree of decentralization, for example.

The Bertelsmann Transformation Index (BTI), which was published in the end of 2004 and

included 116 countries, has shown evidence for a positive correlation between economic

prosperity and democracy: the higher the average per capita income, the higher is the level

of democracy. The countries with high income are also those with the high democratic

scores. The poorest countries have the worst democratic scores. It is, nevertheless, quite

important to mention that these are correlations, not causations nor grand theorems of

determinism. The fact that Mali scores high on democracy though a poor country is an

exception that proves the lack of determinism in the correlative evidence. All in all, the longer

span of history shows that limited government with wide liberties has coincided with more

economic development (DeLong & Schleifer 1993). But the jury is still out on how this

happens and by which mechanism.

Furthermore, though there has always been a tendency to believe that economic freedom

generally goes together with political freedom (Hayek 1944), the sequence has been difficult

to discern (Barro 1996a and 1996b) 1 especially when things are moving (i.e. in transition)

and not statid. O’Donnell argued that "there is simply no statistical correlation between a

country's level of socioeconomic development and the likelihood that it will experience a

transition to democracy. Yet when it comes to the question of democracy's durability,

socioeconomic factors are significant" (O’Donnell, 2002, p. 10) which means that economic

development has to precede political reform to ensure the durability of the latter. Similarly,

Larry Diamond, Juan Linz and Martin Lipset (1995) were sure to state that some level of

socio-economic development is helpful for sustainable democracy, but were less clear on

how democracy could help economic growth and development.

Thus the debate on development has seen a progression from a focus on economic growth

to empowerment. There is a long legacy of the imperative of economic development defined 1 Barro showed in a sample of 101 countries that there is little relation between democracy and growth. He did however find a correlation between both in the twenty two European or European origin countries in his sample. He argued that democracies have poor track record of growth because they pursue distributive policies. He claimed that interest groups in democracies played into the hands of politicians, pushing them to adopt unsound economic policy (Barro 1991 & 1993).


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in terms of growth rates. The next phase was that of state and institutional building;

developments in southern Europe, Latin America and Asia shifted the development debate

towards state competences as a public policy implementing agency. Simultaneously, during

the third wave of democracy, political freedoms became an imperative. Now, we are at a

stage where development is defined holistically and is defined as empowerment.

1.1 The Economic Imperative The classical work of Alex de Tocqueville “Democracy in America” (1830) established the

importance of growth driven by “commercial activities” and social equality as fundamental

bases for democracy. These two pillars of economic development, namely growth via

commercial activities and social equality, have since been anchored in the literature as

prerequisites for sustainable democracy. Similarly, the modernization theory after World War

II postulated that democracy required some level of economic development, education,

modernization of traditional societal relations, urbanization and mass communication. There

was a sense of sequence in the modernization school: Countries developed economically

and socially, while building a nation and a strong state; then they increased participation via

stable and institutionalized organizations. In other words, economic development and

institution building preceded participation.

Many of the assumptions of the modernization theory influenced development well into the

1970s. The argument was for slow political opening so as not to inundate the system of

demand absorption and policy-making. This argument was based on a systemic view of

politics2. Huntington (1976) contributed to a trend in which democracy was reduced to one of

its elements, i.e. participation, to the exclusion of liberal civic rights. Huntington argued that

there is a cascading effect for political participation. At an early stage, less participation

could lead to more economic development but less equity. On the other hand, more

participation at an early stage could lead to more equity but less economic development.

Starting with economic development, Huntington postulated that the conditions for equity

would be achieved, then more political stability and participation would contribute to stability

(Huntington 1976, p. 19-25 and 160-171). This argument indicates a preference for

participation as a by-product, not a first goal.

The neo-liberal school introduced the issue of liberal principles while it continued to reinforce

the cautious attitude towards participation. Most economists upheld the importance of

2 Politics is the absorption of demands to produce policy outputs. The state within that view was considered a neutral cash register of demands.


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protecting private property and individual rights to equal treatment in courts as pre-requisites

for viable economic and business environments. Some scholars argued that while the rich

countries of the world are democracies, the introduction of democracy in poor countries

would not necessarily result in increased rates of economic growth (Clague, Keefer, Knack

and Olson 1997, p 91-120). Others were explicitly concerned about participation leading to

rent-seeking, i.e. to politics derailing sound economic judgement (Weede 1986; Olson 1993,

1996, 1997; Clague 1997). Economists were happy to recommend the insulation of the state

from political influence. The Asian miracle, which should have embarrassed promoters of

state insulation (since the Asian state was embedded in close ties with the private sector),

was interpreted by them as one of bureaucratic professionalism.

While that debate was going on, most economic solutions were based on reducing the role of

the state, eliminating state intervention in the economy, and widening the scope of activity of

the private sector. State was bad, the market was good. There was little room here for any

consideration about democracy. Public choice analysts contributed to the cynical view

through their perception of policy makers as maximizers of votes, a fact they considered non-

optimal for sound economic policy (Samuelson and Norhaus 1985). Hence, many

economists recommended the reliance on insulated economic experts who presumably

decide on sound economic bases. As economists have been afraid lest participation de-

generates into particularistic rent-seeking or populist demands for re-distribution, they have

tended to advocate a developmental state that is relatively autonomous from private interest

pressure, administratively competent and politically capable of controlling civil society (Huff

2001; Leftwich 1995).

1.2 The Imperative of Participation & its Political Economic Context However, there is another group of scholars who see a positive impact for participation on

economic growth. These scholars understand participation as a sign of high trust and social

capital, which is needed for growth (Robert Putnam 1993). Those who are particularly

conscious of the rent-seeking and the populist trap recommend a particular kind of

participation, namely encompassing participation, one which builds consensual bridges

between civil society, regime reformers and the general masses (Evans 1992; Diamond

2001).

To qualify this argument, S. Haggard distinguished between early stabilization policies and

later structural adjustment and institutional reform. He argued that while radical

macroeconomic stabilization may require a strong executive (without consultation), an

institutional environment supportive of sustained economic reform (for structural and


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institutional adjustment) requires consultation. Unlike Olson, Haggard believes that reform

requires interest group participation and may even require developing political relationships

with losers:

Independence from interest group pressures may be a prerequisite for initiating

reform, but reforms can only be consolidated under representative government if

there are bases of electoral, legislative, and – ultimately- interest group support.

As Waterbury puts it, reform must be seen as a process of coalition building.

(Haggard 1997, p. 126)

In their book about the transition experiences in Southern Europe, Latin America and Eastern

Europe, Luis Pereira, Josa Maravall, and Adam Przeworski argued against the big bang

technocratic approach which bypasses newly formed democratic institutions. The most

successful reforms, they argued, were those which created agreement through a process of

democratic negotiation. (Przeworski et al 1991; Martin Brusis 2003).

The democratization wave in southern Europe (Spain, Portugal, Greece), Latin America and

Eastern Europe created an atmosphere of euphoria for civic liberties and civil society

resurgence. O’Donnell and his colleagues who wrote about transition from authoritarian rule

ventured to argue for individual and group liberal civic rights. They dared to postulate that

transitions would require a strong civil society, functioning elections, and careful alliance-

building between reformers. O’Donnell et al highlighted two mechanisms for civil society.

One is open resurgence and the other is a more closed process of pact-building3.

They also called for elections which make the rules of the game the focus of attention and

create an atmosphere in which pacts are negotiated (O’Donnell et al, 1986, P. 38). In 2002,

O’Donnell reiterated that fair elections are an important moment of transition because "these

elections, per se and due to the political freedoms that must surround them if they are to be

considered fair …, mark a crucial departure from the arbitrariness of authoritarian rule"

(O’Donnell 2002, p. 9).

Because civil society participation does not happen in a void, but rather within a context of

state – society relations, the development literature differentiated between two functions of

the state. One function is that of law making and public policy making and the other is that of

policy implementation and law enforcement. Both are by definition distributional and

distributional functions need to be done in a context of accountability, i.e. of representation.

3 If there is sudden upsurge, not long or protracted, then there is no time left for the various segments of society to think of their divisions along class, gender, ethnic or other lines. Protracted transitions, on the other hand, are controlled by the incumbents and tend to produce mild civil society resurrection which are often limited in time and space. Transition for Authoritarian Rule: Tentative Conclusions (1986), p. 55


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Representation and accountability with respect to law making may take place within one of

two institutional arrangements. One is consensual; the other is majoritarian. With respect to

the second function of the state, that of policy implementation and law enforcement, a great

deal of professionalism and relative insulation has been advocated (Levi and Sherman

1997). Myrdal (1968) defined a strong state as one which creates rules to protect liberty and

safeguards order without curtailing liberties. One specific example of that has been the

developmental state. Based on Evans 1989 and Leftwich 1995, developmental states

contain all of the following elements: (a) a core of developmentally oriented group of senior

politicians and bureaucrats in a well-knit network; (b) a relatively autonomous or embedded

state which is not insulated from societal interests but also not captured by them; (c) a

professionally competent and insulated bureaucratic elite; (d) a proven record of delivering

developmental goods including strong economic performance in order for the ruling elite to

maintain its credibility; and (e) a weak civil society controlled by the state4. State competence

became the focus of the World Development report in 19975.

1.3 Empowerment as a Developmental Imperative Thanks to Douglass North and Amartya Sen, the argument now is for opening up the political

system for civil society to participate in policy design, policy implementation and public goods

provision in order to encourage economic accountability and transparency. This has been

encouraged by a more encompassing definition of economic development which has come

to include growth, choice and empowerment6. The World Development Report Building

Institutions for the Market (2002) summed it all up. Rule of law to protect citizens’ and firms’

rights, rule of law to enforce contracts, the freedom of movement for information, people and

goods, and the existence of mechanisms of accountability- all became crucial components of

an enabling environment for economic growth (de Soto, Nugent). These are issues that

come the closest to what political promoters of civic liberties have been recommending.

4 Evans 1989, Letwich 1995. 5 The State in a Changing World pointed out the need for “competent” states which secure property rights, redress market failures and, if up to it administratively, then re-distribute wealth and guide private sector activities. State functions were supposed to match state competences. The Washington institutions made it a point to develop programs to aid state capacity in the meantime. 6 An example is the debate started by Dollar and Kraay in 2000 when they argued that economic growth packages recommended by the World Bank and the IMF were good for the poor. They claimed that “the basic policy package of private property rights, fiscal discipline, macro stability, and openness to trade” was good because such a package increased the mean income of all households with no significant effect on the distribution of income (Dollar and Kraay 2000, p. 6). In response, Luebker, Smith and Weeks reminded of the inconclusive evidence of the impact of growth and trade openness on income equality. They insisted that the growth package is not neutral in its distributional orientation. A lot depends on the country’s social structure and power relations (Luebker, Smith and Weeks 2002). Those who doubt Dollar’s and Kraay’s optimism emphasize the need to couple the growth package with internal institutional reforms which are pro-poor and enhancing of income equality (Giovanni Andrea Cornia, 2003).


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The recent discourse of the World Bank closes the circle: Not only civic liberties and

economic rights, but also empowerment is gaining grounds. Nicholas Stern defined it as

such:

“We can define an individual as being empowered if she or he has the ability to shape

the basic elements of her or his own life. This requires that people be educated and

healthy, in other words the need for what economists call human capital. But

empowerment goes beyond human capital. It also means effective participation which,

in turn, depends on information, accountability, and the quality of local organizations.

…Effective participation and social inclusion mean better results” (2003, p. 7).

1.4 The Arab Context

In the Arab region, particularly among the ruling elite and part of the intelligentsia, there have

been traces of doubt about the compatibility of economic opening and political freedoms. A

case in point is the Nasserist model in Egypt. It tried to achieve the necessary prerequisites

of democracy, i.e. social and economic development, via controlled participation. It also tried

to institutionalize participatory organizations such as a dominant political party, labor unions,

and professional syndicates. However, institutionalization turned into corporatism (i.e. no

financial autonomy from the state, no leadership succession independent of the state, no

organizational differentiation other than what is needed to channel loyalty to the state). The

Nasserist developmental state might have had good records of equity, but not so good a

record on sustainable growth, nor on participation and accountability.

Transitions in the Arab region away from closed, planned economies have also not helped

much to clarify the positive relationship between economic and political development. These

transitions have shown that they destroy old and create new constellations of economic and

political power; they do not neutralize all power relations. Arab countries, including Egypt,

Morocco and Jordan, are still struggling to break away from this power structure which is

keeping political development partial and thus making the credibility and sustainability of

economic reforms questionable.

Peter Pawelka and Urlich Wurzel noticed that the 1990s have reduced the power of the

bureaucratic state as only employer, a state which based its power in the 1970s and 1980s

on rentier revenue. Also the economic reform has increased the economic and political

power of the private sector. However, he asserted that the result was a new coalition

between members of the private sector and some of the ruling elite. This coalition is not

likely to be democratic (1997, p. 55-59). Eberhard Kienle also observed:


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“Under the conditions prevailing in Egypt in the 1990s, economic liberalization has

failed to redistribute economic power significantly and to replace state hegemony

with an economic polyarchy more prone to competition and more favourable to

political conflict and pluralism. …Economic liberalization is likely to produce not only

winners but losers as well. From the point of view of the reformers, losers need to be

excluded…” (Kienle 1998, p. 235).

Nevertheless, there are Arab intellectuals and activists who advocate political reform first.

Democracy has become for them, as A. al-Azmeh pointed out, “an ideological motif as

ubiquitous today as Arab unity or Arab socialism once were…. It is presented as self-

sustaining, almost self generating.”7 However, most Arab promoters of democracy ignore the

problematic absence of certain democratic requirements which would make a polyarchy in

the Dahl sense8 come about, namely a well developed national identity, a legacy of

respected rules to regulate competition and a tradition of nonviolent handover of power. The

nation-building task has not been accomplished yet; many Arab nations have problems of

minorities that are not yet integrated in the body politics nor is the public discourse

accommodating an open discussion on the matter. In some cases, such as Jordan’s, the

political and economic power of tribes and families stands in the way of a strong sense of

citizenship, strong civil society activism and accountability of the ruling elite. Neither are the

rules governing political competition resolved, for Arab regimes keep changing them but not

enough and thus those rules remain contested and lacking in credibility (Egypt’s and

Morocco’s debate on electoral rules and the constitutional power of the head of state are a

case to the point). Moreover, some countries such as Egypt still stand to be tested on

nonviolent handover of power (the Algerian scenario scares many away).

Hence, there are a series of deficits and disappointments that have accompanied the Arab

march towards more participation and accountability. For example, in the case of Egypt,

Jordan and less so in Morocco the euphoria for civil society was dampened by two trends.

7 Aziz al-Azmeh „Populism Contra Democracy“ 2001, p. 114. 8 The version of democracy that has mostly affected the thought and action of democracy promoters is that of Robert Dahl (1971). It outlined two components namely the sanctity of liberal civic rights and the procedural rules of power rotation through mass participation. Robert Dahl coined the word “polyarchy” as the less than ideal but attainable type of democracy. Ideal democracy for Dahl involved equality of voting for each citizen, effective participation by each citizen, absolute inclusion in deliberation of all adults subject to the rules and laws, enlightened understanding of the issues, and final control of the policy agenda, of when to implement this agenda and by whom. It was obvious that this list cannot be fulfilled in any democracy, especially of over a million inhabitants. Indeed Larry Diamond argued that countries over one million are twice as likely to be electoral authoritarian (Diamond 2002, p. 27). Dahl, thus, identified seven components of the more feasible “polyarchy”. These were: government by elected officials, who are chosen in free, frequent and fair elections, in which all adults would have the right to vote, the right to run for office, the right to seek alternative sources of information and to form relatively independent organizations (1971).


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First the state issued laws that reduced the ability of civil society to have any power over the

speed and scope of economic and political liberalization. Secondly, observers of civil society

have noticed early on that it lacked some of the features mentioned above: trust, tolerance,

encompassing of others (Mostafa K. Al-Sayyed 1993).

In the Arab region, evoking elections has had a superficial impact. Only in 1984 and 1987

did that experiment result in some noticeable opposition representation in the national

parliament of Egypt. To some extent, the experiment with multi party politics and multi party

elections since 1976 and until 1987 had concentrated efforts on reforming the rules of

political contestation and learning how to live with each other as ruling and opposing elites.

However, this experiment proved to be very humble indeed, for it was burdened by several

exogenous and endogenous weaknesses: a) an external re-orientation of the country’s

regional and international alliances, one which polarized the ruling elite and the opposition,

leading again to questions of identity and accusations of treason; b) an economic “infitah”

which was expectedly creating social polarization and raising doubts about the political

feasibility of economic reform; c) a protracted emergence of civil society organizations and of

weak political parties, based on personalities and with no clear base of support. This has

made all parties on the scene compete for the same medium voter, which gave the

incumbent party more strategic value as the party in the better position to influence the

bureaucracy and distribute public goods (for an assessment of Egypt’s transition 1971-1990

see El-Mikawy 1999). Similar ailments afflict the evoking of elections in Jordan, where tribal

affiliations still play a more important role than party programs, and in Morocco, especially

after the opposition party accepted to come to power without support of the ballot and with

the tacit agreement to include those who tortured people in the previous regimes. Hence,

elections have had partial positive results on the march towards good governance.

Arab states also have a problem reaching agreement or consensus. The consensual model

of representation and accountability is more prevalent in the Arab region than the

majoritarian one. But the consensual model is not devoid of its shortfalls in the Arab region.

The head of state exercises over proportional powers and consensual institutions whether in

political parties, professional associations, parliaments or civil society are dominated by the

state and lack real support of the grass roots.

To make things worse, the Arab state has fell short of the developmental status it has

aspired to in order to buy time away from political reform. It has lacked all of the conditions


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of a developmental state9. The bureaucracy and the mode of state business relations are

among the main shortfalls. Attempts to make the bureaucracy more professional and

competent in the Arab region proved to be extremely political. Egypt is a case in point. To

make a competent bureaucracy out of an over-bloated one becomes a political test of will, so

long as the economy is not providing enough job opportunities. But if bureaucracy remains a

politically sticking issue, it becomes an economic hazard. This economic hazard reduces the

performance credibility of the state. So does the bad developmental performance which is

partly sustained because of a big salary bill to an inefficient bureaucracy. It is not yet clear

how to break the cycle10. As to state business relations, the Arab states still suffer from weak

private sectors and dominant states which forge tacit alliances with each other. As the

private sector is dominated by small and micro enterprises which are not organized nor

formally registered, the state business plane is left to a small number of oligarchs. This

sustains non levelled playing fields and lack of transparency (U. Wurzel and E. Hill).

2. GOOD GOVERNANCE INTRODUCES FUNCTIONAL BENCHMARKS?

The concept of good governance, used first to denote financial transparency of economic

corporate bodies, got introduced into the development literature and identified two functional

benchmarks (besides the rule of law) namely accountability and inclusiveness. Both

require participation institutionalized into powerful legislative bodies which monitor the

Executive and strong civil society organizations which monitor Executive, Legislature and

private sector (Fig. 1). Good governance also introduced the concept of rule of law to

denote an equal enforcement of the rules, an issue which reinforces the notion of citizenship,

makes inclusiveness a reality not just a claim and helps accountability by empowering

citizens, all citizens.

9 (a) a core of developmentally oriented group of senior politicians and bureaucrats in a well-knit network; (b) a relatively autonomous or embedded state which is not insulated from societal interests but also not captured by them; (c) a professionally competent and insulated bureaucratic elite; (d) a proven record of delivering developmental goods including strong economic performance in order for the ruling elite to maintain its credibility; and (e) a weak civil society controlled by the state. 10 Heba Handousa made viable suggestions in the case of Egypt. Because the bureaucracy is the employer of last resort it becomes difficult to lay off redundant bureaucrats. Yet because the wage bill is already high, it is not economically wise to increase salaries without reducing numbers. One solution is to re-route them to the social domains (health, education, and social assistance) (Handousa et al 2002.


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Figure 1: Accountability Mechanisms

Adapted from World Bank Report Better Governance for the Middle East and North Africa, 2003, with additions

from the author of this paper.

However, good governance does not happen in a vaccum. Several institutional

arrangements increase the incentive for participation, reduce or increase the number of veto

players and constrain the ability of rulers to insulate themselves as well as become too

enmeshed in societal conflicts. These arrangements range from strong party systems,

strong checks and balances, to a tradition of consensus rule11.

Furthermore, the logic of economic liberalization is proving to hamper not to enable

participation. Liberalization of the economy is no guarantee for a strong and lively private

sector. In economies such as those of the Arab states, but not only there, privatization leads

to dominant positions enjoyed by few firms in various industries, if not out-right monopolies.

This situation is to be contrasted against the prevalence of huge numbers of formal medium

and small firms and an even bigger number of informal small and micro firms. While the latter

category creates most of the jobs in the economy, it is often not organized and its capacity to

participate collectively to influence the direction of law and policy is weak. As to the formal

small firm category, it is often characterized by weak global or national outlook; such firms

have few resources to devote to policy making let alone to market analysis or business

11 Martin Brusis, 2003.

Ministries/Bureaucracy

Monarch I President

Society

Civil Society Organisations Political Parties

Associations

Parliament, Constitutional Court

Information Political will Rule of Law External Pressure


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development12. This is simply part of the picture of weak competitiveness in general in this

wide category of businesses. It strains the overall environment of accountability, weakening

civil society and the private sector vis-à-vis the state.

3. THE IMPORTANCE OF POLITICAL MANAGEMENT The key factor for any reform in whichever direction (economic or political) is the ability of the

ruling elite to manage transformation processes. The BTI highlights this idea: “Der Umbau zu

Demokratie und Marktwirtschaft kann zwar sehr unterschiedlich verlaufen, bedarf aber in

jedem einzelnen Fall gestaltungsfähiger Akteure, die durch gutes Management die Prozesse

zu steuern vermögen.“ ( BTI 2003, p. 7)

In the Middle East and North Africa region, there seems to be a tendency for political and

economic development levels to help raise the score of management of transformation. That

means, the higher the political and economic performance scores (with the economic scores

usually surpassing the political ones), the higher the transformation management score13

(see figure 1)

As logical as this set of indicators appears, it is in reality a messy story. There is nothing that

should guarantee that a ruling elite can persist in implementation even against societal

resistance while remaining open to scrutiny and accountability demands. It is furthermore

quite difficult to simultaneously succeed in building consensus without having to resort to

loser compensation mechanisms that may go against the principles of effective resource

management.

The same problem occurs in the case of the World Bank’s indicators for better governance.

The Bank focused on accountability and transparency, pointing attention to bureaucratic as

well as judicial performance. In both cases, the question arises: are these really the issue or

12 Urlich Wurzel 2003, p. 112. 13 The indicators of political performance, called in the BTI jargon “Status der Demokratie” are: (a) state formation (Staatlichkeit); (b) political participation (politische Partizipation); (c) rule of law (Rechtsstaatlichkeit); (d) institutional stability (institutionelle Stabilität); and (e) political and societal integration (politische und gesellschaftliche Integration). The indicators of economic performance (Status der Marktwirtschaft) are: (a) socio-economic development (sozioökonomisches Entwicklungsniveau); (b) competition in the market (Markt- und Wettbewerbsordnung); (c) monetary stability (Währungs- und Preisstabilität); (d) private property (Privateigentum); (e) welfare system (Welfare Regime); (f) growth performance (Leistungsstärke der Volkswirtschaft); and (g) sustainability (Nachhaltigkeit). The BTI measures good management of transformation processes using the following five indicators: (1) Determination and Commitment to strategic goals (Zielsicherheit); (2) Effective management of resources (Effektive Ressourcennutzung); (3) Persistent implementation also against societal pressure (Gestaltungsfähigkeit); (4) Building consensus among various societal groups (Konsenbidlung); (5) International cooperation (internationale Zusammenarbeit), BTI p. 12-13.


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is there a more fundamental political process that is being missed. Thomas Carothers

delivered an eloquent critique of rule of law development aid on these grounds. He argued

that “it is by no means clear that courts are the essence of a rule of law system in a country.

Only a small percentage of citizens in most Western rule of law systems ever have direct

contact with courts. …Yet rule of law programs have not much focused on legislatures or the

role of executive branch agencies in law-making processes.” (T. Carothers 2003, p. 8)

Figure 1: BTI indicators of economic, political and management performance

It is often the bigger picture of political and economic macro conditions which needs to be

extensively understood to be able to appreciate the constraints put on those who have to

manage reform. In the BTI index, good management of the transformation process is set

within a context of political and economic performance indicators. This macro politico-

economic picture is qualified by various degrees of difficulty that are determined by things

such as the size of the population, the severity of the economic crisis, societal cleavages

and levels of integration, etc..

3.1 The Issue of Political Will

It is correct to draw attention in any discussion of governance on the political will of the ruling

elite. When it is missing, it is hard to imagine any reform process getting started,

perpetuated or consolidated. Yet we know little about the origin or causes of shifts in political

will (T. Carothers 2003, p. 9-10). There are in fact three options available: (a) will arises from

within the ruling elite when it realizes that reform is the better option for it to stay in power; (b)

Politische Transformation und Marktwirtschaft zu Gew. Management Index BTI 2003

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16

political will arises from below when the ruling elite realizes it cannot oppress societal

demands because oppression would, then, come at a high cost; (c) political will arises as a

result of pressure from the outside when the ruling elite sees no option but to conform to

externally set standards of behaviour which happen to be supportive of reform.

Each one of these options has a mix of implications for the reform process. When the will to

reform comes from above, it may pre-empt resistance from below or from within the ranks of

the ruling elite. What is then created are two parallel communities, one for reform and the

other for its sabotage. If the ruler belongs to the first, we notice more movement towards

reform, but we ignore the question whether such movement is sustainable. This might be the

case in Jordan. It could also be that parallel administrative, judicial or knowledge structures

are created from above, one to bring reform forward while the other remains unable to

sustain reform measures (this might be the case in Jordan and Egypt). If the will for reform

comes from outside, the ruling elite might introduce cosmetic changes to avoid the

disadvantages it accrues by not complying. Yet the core issue of whether reform is genuine

remains. When the will for reform is instigated by societal demand from below, we tend to

think that such reform has better chances for success and sustainability. While this is

intuitively true, the issue of whether the upper and middle management in various institutions

are motivated and are capable to implement reform remains open.

3.2 The Issue of Incentives

The aforementioned point draws out attention to the issue of incentives. There are usually

many entrenched actors who find the status quo more beneficial to them than the post reform

situation (T. Carothers, 2003). Hence they will not be motivated to implement reform even if

the ruling elite pushes for it. History has many examples of reform attempts that were

stopped in their own tracks by middle management or local bureaucrats on the ground. The

same is true for parliaments. These institutions do exist in many countries, including Arab

ones. But any one who has dealt with these institutions cannot but wonder why

parliamentarians miss chances to exert influence almost willingly. This puzzle is probably

resolved with a closer look and more understanding of the political and economic incentive

structure of parliamentarians.

3.3 The Issue of Transparency: On Data, Information and knowledge

For many years economic development has been defined in terms of growth rates and

capital accumulation, especially physical capital. Now other productive factors are being


17

considered by economists, namely education, information, knowledge. A wide literature on

freedom of information, press freedom and knowledge management is enriching this debate

(H.D. Evers; WBI report on The Right to Tell 2003)

The importance of the quality of information, access to information and the knowledge

creation, dissemination and management systems are gaining ground in our understanding

of transitions. Three reasons make this phenomenon sustainable: education has always

been embedded in our understanding of human development so has communication.

Furthermore, information and knowledge increase transparency of transitions. Finally,

evidence shows that benchmarks and indicators are being demanded by policy makers and

that points towards a trend of rationalism in public policy making. Responding to a question

to improve the decision making mechanisms, Mohammed Kabbaj, Adviser to King

Mohammed VI said, “In order to improve the decision making mechanism, the decision

making process must be first simplified. One must first fully understand the expected

implications of any decision to be taken on socio-economic and political fronts. This can only

be achieved by undertaking extensive analysis before taking a decision and basing the

decision on sound and informed data and analysis in order to be better able to assess the

overall situation.” Newsletter of the Economic Research Forum, Volume 10, Number 04,

Winter 2003.

4. IMPLICATIONS FOR DEVELOPMENT POLICY There is a proliferation of governance projects and programs by all of the major development

agencies (bilateral and multilateral) that are concerned with the Arab region (Annexes 1, 2, 3,

and 4 highlight some of these activities). However, there is an unresolved tension between a

development policy that focuses on the technocratic aspects of governance or the

democratic aspects thereof (Martin Brusis, 2003). For example, should governance projects

focus on increasing the number of computers in parliament or the political incentive structure

and the level of pluralism and the fairness of elections? Should they focus on training NGOs

in negotiations and in writing up funding proposals or rather focus on the enabling

environment for civil liberties? Should they focus on training judges in international

commercial transactions or on the corruption structures inside the judiciary? While no one

doubts the value of the normative aspects of governance (accountability as a political

democratic value and inclusiveness as a corollary of development as choice and as

empowerment), the fact that development policy can only measure its projects and programs

within a time frame that is too short for any of the normative effects to kick in often reduces

the incentive for making normative goals the main short term goals of development policy.


18

For many workers in developmental agencies and for many scholars, the concept of good

governance has acquired an immediate appeal. It provided them with a benchmark upon

which to measure and monitor the myriad of economic and political procedures and

principles advocated by economists and political scientists under the umbrella of liberal

capitalism or democracy (M.S. Saeed 2004, p. 10).

Despite such appeal14, the initial response by the Washington based financial institutions was

lukewarm because they were resistant to a definition of good governance that would include

political or qualitative dimensions beyond the necessary requirements needed to expedite

the structural adjustment programmes so well advocated by these institutions. However, as

economic performance faltered in Africa and other regions despite of several resolute

attempts by leaders to swallow the structural adjustment pill, the question of state-society

relations resurfaced. Yet fear of institutional reforms in state-society relations that would

undermine structural adjustment policies or jeopardize financial prudence have effectively led

to the insulation of technocrats invested with the powers to push ahead with reforms from

societal scrutiny (Thandika Mkandaire, 2004, p. 381). This fear is often mixed with anxiety

about radicalism or instability especially in the Arab context.

By looking at the political management of economic reform in Morocco, Egypt and Jordan,

this study emphasizes the importance of incentives, of coordination, as well of capabilities

and of information and knowledge creation for good governance and also for economic

reform. This study could help identify some strategic directions and components that need to

be included in some form in any governance program either on the national or on the

regional level.

14 The governance concept crept into development literature in the 1980s thanks to a World Bank reports among them that on African development which declared, “Underlying the litany of Africa’s development problems is a crisis of governance.” The report meant good governance of financial and administrative transparency and accountability. African intellectuals who helped forge the concept of good governance back then meant something over and above financial and administrative good governance. In fact for them, good governance meant “the establishment of state-society relations that are: (a) developmental, in the sense that they allow the management of the economy in a manner that maximises economic growth, induces structural change, and uses all available resources in a responsible and sustainable manner in highly competitive global conditions; (b) democratic and respectful of citizens’ rights; and (c) socially inclusive, providing all citizens with a decent living and full participation in national affairs.” See Thandika Mkandaire, 2004, p. 380.


19

Annex 1: Selection of Governance Activities in Egypt

Time frame

“Donor” Funds Description

2000 – 2005

UNDP $US 600,000 by USAID, Government of Egypt Partners: Ministry of Foreign Trade, Ministry of Foreign Affairs, and USAID.

„Strengthening the Capacity of the Ministry of Economy for Economic Management.” Objectives: The project aims to help the government consolidate its recent economic achievements. It also helps to create the right environment for foreign and national investment. This involves encouraging exports and trade and promoting SME’s. Description: The purpose of this project is to enhance the professional and technical capacity of the Ministry of Foreign trade to design and prepare legal frameworks; establish strong links and communications with sovereign rating agencies and donors and implement a privatization program of Joint Venture companies and banks. Problem: Inadequacy of specialized training programs that match the needs of the staff. Need to monitor, evaluate and respond wisely to both domestic and international economic developments. Unsatisfactory growth of Egyptian exports. Lack of export-oriented information. Redundancy of registries. Need for efficient portfolio management techniques to pension funds. Insufficiency of mortgage financing mechanisms. Unavailability of timely, accurate and reliable analysis of firms subject to privatization. Achievements: Research-based economic policies are set and implemented. Economic team designed economic policies and scenarios. Non-financial needs of SMEs such as registration requirements are streamlined to facilitate market entry and operation. Capacity of staff enhanced in professional data gathering. Beneficiaries: The direct beneficiaries of the project will be the administration of the Ministry of Finance. The project will also benefit the trade and investment sectors. Impact: Effective and efficient implementation of the Ministry’s Privatization Program. Improved responsiveness of the Egyptian economy. Restoration of transparency, accountability, and predictability to the economic environment. Encouragement given to small and micro-enterprises. Investment environment improved. Capital market operating efficiently.


20

Time frame


2000 – 2005

UNDP $US 836 138 by UNDP Partners: International Cooperation Sector at the Ministry of Foreign Affairs

“Donor Coordination Support and Technical Assistance (DOCSTAU)” Objectives: The project aims to create a high quality information system which will assist the government of Egypt to negotiate the nature and scope of donor assistance. Description: The project aims at improving the information base of ongoing donor funded projects and strengthen the capacity of the ICS Central departments to negotiate and monitor donor assistance, as well as consolidating the coordination mechanisms between ICS, line ministries, and the donor community. Problem: To better manage International aid by more than forty international donors. Achievements: Production of a Database on External Assistance and a database to track international loans and agreements made by the country. Production of the first Development Cooperation Report to Egypt. Beneficiaries: Government of Egypt, All donors to Egypt, Egyptian citizens. Impact: Provides all interested actors with transparent information on international donors’ funding to Egypt. Helps the Government to take the lead in directing international funds to Egypt.

2003 – 2004

UNDP $US 210,000 by UNDP Partners Ministry of Planning Location Ministry of Planning

“Creation of a Policy Advice Unit at the Ministry of Planning” Objectives: Establish a technical policy advice unit to support the decision making process at the Ministry of Planning. Description: The purpose of this Preparatory Assistant project is to assist in the creation of a Policy Unit in the Ministry of Planning. The PA phase will identify the scope of work of the policy unit along the following lines: a) advising on appropriate ways and means to activate the private sector; b) assisting in their ministerial coordination; c) assisting in articulating a poverty alleviation action plan and how to report on the Millenium Development Goals and d) provide policy advice and information to the Minister related to economic and planning issues. Problem: The intended changes in the focus and scope of planning underscore, among other things, the lack of transparency and vigilance in the process of monitoring the performance of the economy, given the elusive behavior of the private sector. Achievements: Full-scale project document ready for signature to establish the Policy Advice Unit within the Ministry of Planning. Beneficiaries: Government departments involved in poverty reduction and economic development.


21

Time frame


2002 – 2004

UNDP $US 114,546 by Government of Egypt Partners: Ministry of Administrative Development and Ministry of Information and Research Centers

“Civil Service Reform Program (Phase II)” Objectives: To improve efficiency of public services delivery. Description: The purpose of this project is to sensitize the public on the accessibility to Government services through telephone and voice mail and through the website of the Ministry for Administrative Development. The project will also initiate community participation in broadening and expanding the coverage of e-government. Problem: Lengthy and bureaucratic procedures to issue government documents. Achievements: Business plan and terms of reference for website upgrading completed and equipment purchased. Beneficiaries: Users of public services.

2001-2007

USAID US$1. 2billion (US$ 200million per year)

Development Support Program II The Development Support Program II (DSP II) is a policy reform program designed to continue assisting the Government of Egypt in achieving its planned reform measures for the next six years. These policy reforms are identified as benchmarks, or precise measures agreed upon as means of achieving the policy areas/objectives determined in the Memorandum of Understanding, and as the basis for disbursement of USAID funds. The progress towards achieving these policy areas/objectives will be then measured, monitored, and evaluated.

2000-2009

USAID US $20,160,000 in 2004

“Democracy and Governance” USAID programs in the governance field support a stronger role for civil society, support improvements in the administration of justice, and introduce the application of participatory models of service delivery. In conjunction with the USAID/State Department joint review of the USAID/Egypt portfolio, we will be increasing our assistance for projects in the fields of democracy and governance in accordance with the MEPI goals. Possible activities include media training, strengthening civil society, improvements in the administration of justice, and efforts to improve service delivery.


22

Time frame


2000-2006

USAID US$ 60million Technical Assistance to Support Economic Reform Technical Assistance to Support Economic Reform, or TASER, provides the Government of Egypt and selected research organizations with technical assistance to develop, carry out, monitor, and evaluate key elements of the Development Support Program.

2000 (Beginn)

GTZ ??? Personalausweise für Frauen in Ägypten In Ägypten zeigt sich die Ausgrenzung von Personen deutlich am Personenstandsrecht. Die meisten Frauen werden zunächst im Ausweis ihres Vaters und dann in dem des Ehemanns geführt. Ohne eigene Papiere sind Frauen aber im juristischen Sinne nicht existent. Ein von der GTZ im Auftrag des BMZ unterstütztes Projekt verfolgt seit dem Jahr 2000 das Ziel, Frauen des Besitz eines eigenen Personalausweises und anderer offizieller Dokumente zu erleichtern. Eine wichtige Vorraussetzung dafür ist, in der Bevölkerung das allgemeine Bewusstsein für unverzichtbare Frauenrechte und erforderliche Gesetzesformeln zu schärfen.

1992-2002

USAID US$ 50million Technical Support for Sector Policy Reform Technical Support for Sector Policy Reform (TSSPR) is a ten-year activity that assists the Government of Egypt with the formulation, management, and monitoring of its economic reform program.

1999-2002

USAID US$ 400million

Development Support Program The Development Support Program (DSP I) is a policy reform program designed to assist the Government of Egypt in achieving its planned reform measures. It will improve the environment for trade and investment and increase productive private sector employment. It is directed at achieving USAID/Egypt new overall strategic goal of a globally competitive and equitable economy.

1998-2004

USAID US$ 32,5million

NGO Service Center This project supports civil society development through training and grants.

1998-2002

USAID US$ 40million Partnership for Competitiveness USAID supports the efforts of the Government of Egypt to transfer ownership of state-owned enterprises to the private sector via new legal and regulatory developments and mature capital markets institutions.


23

Time frame


1997-2005

USAID US$ 45million “Partnership for Economic Reform” The Partnership in Economic Reform (PER) works with the Government of Egypt to promote economic stabilization and structural adjustment. There are three components to the project. Corporate Tax, assists the Ministry of Finance to develop and install a modern tax system that is conducive to investment, transparent, and equitable. The Data Access and Transmission Activity (DATA) works with the Ministry of Planning to modernize the system of national accounting that the Government of Egypt uses to estimate and report economic activity. And the Structural Adjustment and Support Activity promotes market liberalization and regulatory reform.

1996-2002

USAID US$ 17,8million

Administration of Justice Support The Administration of Justice Support (AOJS) project enhances the capability of the Egyptian justice sector to deliver judicial services in a more timely fashion and apply the rule of law.

2000-2002

DFID 242,856 GBP Capacity Building Expanding Micro Finance Governance CSCF 26 To strengthen the institutional capacity of CEOSS and develop a subsidiary Micro-Finance Institution under the CEOSS umbrella enabling the expansion of current Micro-Finance governance.

1994-1996

DFID 14,633 GBP Advice to MIC Consultant to advise MIC on strengthening the effectiveness of MIC

1992-1996

DFID 100,000 GBP Economic Reform Training Awards / Courses in support of Economic Reform.

1992-1993

DFID 7,710 GBP Central Agency Organization & Administration Consultant to advise on Training needs of civil servants

1991-1998

DFID 220,000 GBP Admin Control Authority Working with the Egyptian Administrative Control Authority to support their work through a series of Consultancies in Egypt and training attachments in the UK.

1990-1996

DFID 150,000 GBP Inform & Technology: IDSC


24

Annex 2: Selection of Governance Activities in Jordan

Time frame

Donor Funds Description

2004-2009 USAID 2004 US$ 32,850,000 2005 US$ 40,000,000 Economic Support Funds (ESF)

“Social Sector Development and Governance” 1. Improved health status for all Jordanians

through improved quality of and access to health care services and information, health policies and the health system, and through healthy lifestyles;

2. Improved education and life-skills by creating greater opportunities for youth through expanded work and life skills and through improved and expanded early childhood and secondary education; and

3. Improved governance and expanded civic participation resulting from a more effective legislature and improved transparency.

FY 2004 Program: Legislative Strengthening ($3,325,000 ESF). Parliament capacity in legislation, oversight and representation will be strengthened. The capacities of NGOs to participate in the policy making process and the reporting capacities of the press will be enhanced. Promoting Transparency ($3,325,000 ESF). Funds will be used to raise public awareness on the costs of corruption and the need for transparent processes in resource allocation and usage. Activity will engage civil society, the media, and the GOJ. FY 2005 Program: Legislative Strengthening ($1,500,000 ESF), and Promoting Transparency ($1,500,000 ESF).

2003-2006 (2003-2005)

DFID Pds 3 mn (5,000,000 GBP)

“Public Service Reform for Service Delivery” This is a project to assist the Government of the Hashemite Kingdom of Jordan in its ongoing program of public service reform (PSR). To be implemented over a period of three years, its purpose is to strengthen the public service’s capability to deliver services to all in the Kingdom (including the poorest). In particular the project will support GoJ initiatives in specific areas of service delivery through: beneficiary surveys, service costing analyses, medium term budgeting, output measurement approaches, and stakeholder communication programs, with a focus on the Ministry of Education. The project will also be able to support work on essential central capabilities in areas such as: (i) reviewing the role and functions of government, and restructuring government organizations; and (ii) human resource development, notably through ensuring the central


25

importance of merit in selection decisions (recruitment and promotion), and pay reform. The project will most directly complement the World Bank’s series of Public Sector Reform Loans (PSRL), as well as more indirectly the activities of other aid agencies (eg GTZ in performance oriented budgeting).

Time frame


1999-2001

DFID 2,150,000 GBP

“Sales Tax” The successful introduction of a multi-stage Sales Tax which is fully sustainable thereafter by the Sales Tax Department and which provides the Government of Jordan with increased revenue inflows.

UNDP US$ 140,000 by UNDP Implementing Agent: Parliament of Jordan

“Support to the Parliament (Lower House) Administration in Jordan (JOR/03/M01)” Provide the Parliament of Jordan with technical assistance to strengthen the knowledge, skills and capacity of the Secretariat staff, enhance research capacity and facilities, and improve the library of the research and information services through building a virtual library and introducing electronic library and research services.

UNCTAD US$570,000 by UNDP and Government of Jordan

Empretec Programme in Jordan - Phase II (JOR/01/005) As phase I, assisted in the creation of an independent and sustainable foundation supported by public and private stakeholders to foster entrepreneurial capacities and provide training using UNCTAD’s EMPRETEC programme, phase II objective is the full operationalisation and institutionalisation of the programme, and its consolidation into an independent and sustainalbe Non Governmental, Not for Profit Foundation, supported by public and private stakeholders.

2002 WB US$ 120million Borrower THE HASHEMITE KINGDOM OF JORDAN Implementing Agency MINISTRY OF PLAN

Public Sector Reform Adjustment Loan (02) Project Targeted Thematic Outcomes Judicial and other dispute resolution mechanisms, Administrative and civil service reform, Public expenditure, financial management and procurement Supporting this Broader Development Goal Investment climate (CAP) Public sector governance (CAP)

2001 WB US$ 120million

Public Sector Reform Adjustment Loan Targeted Thematic Outcomes Judicial and other dispute resolution mechanisms, Administrative and civil service reform, Public expenditure, financial management and procurement Education for the knowledge economy


26

Supporting this Broader Development Goal Investment climate (CAP) Public sector governance (CAP) Public sector governance (CAP) Education (CAP); Information & knowledge (GPG)

Time frame


1999-2000 WB US$ 120million Borrower GOVERNMENT OF JORDAN Implementing Agency MINISTRY OF PLANNING

Economic Reform & Development Loan (03) Project Targeted Thematic Outcomes Legal institutions for a market economy, Regulation and competition policy, Law reform, Trade facilitation and market access Supporting this Broader Development Goal Investment climate (CAP) Investment climate (CAP) Public sector governance (CAP) Trade & integration (GPG); Develop global partnership for development (MDG)

1996-1997 WB US$ 120million Borrower THE GOVERNMENT OF JORDAN Implementing Agency MINISTRY OF PLANNING

Economic Reform & Development Loan (02) Project Targeted Thematic Outcomes: Regulation and competition policy Tax policy and administration Export development and competitiveness Supporting this Broader Development Goal: Investment climate (CAP) Public sector governance (CAP) Trade & integration (GPG); Develop global partnership for development (MDG)

1995-1996 WB US$ 80million Borrower GOVT Implementing Agency GOVT

Economic Reform & Development Loan Targeted Thematic Outcomes: Tax policy and administration, Trade facilitation and market access Supporting this Broader Development Goal: Public sector governance (CAP) Trade & integration (GPG); Develop global partnership for development (MDG)

1997-2004 USAID Overall Budget for the Programm “Increased Economic Opportunities for Jordanians” US$ 325,000,000

More Effective Identification and Implementation of Policy Reform (Intermediate Result 5.2) Focuses on the identification of key areas of policy concern, followed by the effective implementation of measures designed to overcome them. One of the problems of policy reform is a tendency for policy rhetoric to remain a statement of intentions or a rhetorical pronouncement about the importance of a set of "reforms," while still lacking the means to effectively implement lasting change. An inability on the part of mid-level officials to fully understand the technical aspects of a specific change can undermine agreed upon commitments to reform. Other factors are lack of an obvious constituency to galvanize reform; an inability to properly explain reform to the public; and lack of effective feedback systems to inform policymakers about grassroots level.


27

Time frame


1993-1997

USAID US$ 981,762 Sector Policy Reform Tech. Support Program To "provide technical and commodity support to the GOJ in implementing and monitoring the Sector Policy Reform Program( 278K646), aimed at strengthening Jordan's trade and investment policy framework so that it fosters growth of Jordanian exports and investment to support export expansion."

1993-1996

USAID US$ 29,000,000

Sector Policy Reform Program To "strengthen Jordan's trade and investment regime." The $29 million " disbursed in accordance with the GOJ's progress in making policy reforms aimed at (1) speeding export and import processing; (2) improving financial and trade relations; and (3) supporting domestic and foreign investment in export."


28

Annex 3: Selection of Governance Activities in Morocco

Time frame


2005-2008

USAID US $4,000,000

“Improved Government Responsiveness to Citizens” In December 2003, USAID and the State Department approved the new USAID/Morocco Democracy and Governance (DG) program “Improved Government Responsiveness to Citizens.” The DG program will be financed by ESF and will begin in FY 2005. In order to avoid a gap in democracy programs in Morocco for FY 2004, the regional Middle East Partnership Initiative (MEPI) will provide bridge funding for this program. The program is intended to address the urgent requirement for the Government of Morocco (GOM) to better respond to its citizens' needs. Governance must be transparent, accountable, and equitable. This program strives to support a system that encourages debates and works on improving leadership for the long term. At the same time, the program will work on building a partnership between citizens and government to immediately deliver tangible results at the local level. The USAID democracy program is directly related to the MEPI goal of promoting the rule of law and accountable, effective government institutions. In addition, good governance is a prerequisite for the creation of an enabling environment for investment and job creation.

2002-2006

UNDP US$ ???

« Appui au Parlement » Les principales réalisations enregistrées au cours de l'année 2000 sont les suivantes :

• Conception et démarrage des travaux de réalisation du Schéma directeur informatique pour l'ensemble du Parlement, d'un Site Web sur Internet et de Banques de données législatives. • Recrutement de cadres informaticiens : le recrutement de cadres spécialisés -ingénieurs -constitue une " première " dans la vie du Parlement marocain. • Formation de base dans le domaine de l'informatique, au profit de 65 Députés et cadres de l'administration du Parlement. • Constitution d'un pool informatique accessible aux Députés et acquisition de l'équipement informatique requis (120 postes). • Lancement d'une étude stratégique sur la réforme de l'administration du Parlement (organigramme, simplification des procédures, etc.). • Mise à niveau et modernisation de l'administration


29

du Parlement.

Une étroite complémentarité est recherchée entre les activités du projet d'appui du PNUD à la Réforme de l'administration et celles du projet d'appui au Parlement : le Réseau des simplificateurs mis en place dans le cadre du projet d'appui à la Réforme administrative a été chargé de l'étude en cours sur la réforme de l'administration du Parlement.

Time frame


2002-2006

UNDP US$ ???

« Coordination pour l'élaboration d'un Programme national de gouvernance » La mise en place d'un Site Web propre au Programme national de gouvernance et de renforcement institutionnel est en cours. La conception de la page d'accueil animée comprend les éléments suivants : • l'objectif général du programme et de ses différentes composantes ; • un sommaire doté d'un lien hypertexte qui présente le contenu et les réalisations de chaque sous-programme ; • un formulaire d'opinion via e-mail recueillant les avis et les participations des différents partenaires (sous-programmes du Programme de gouvernance et autres programmes en cours ou/et en pipeline, secteur privé, ONG et autres ministères…)

2000-2004

WB US$ 5,3million Borrower KINGDOM OF MOROCCO Implementing Agency MINISTRY OF JUSTICE

LEGAL AND JUDICIAL DEVELOPMENT The Legal and Judicial Development Project aims at developing an independent, competent, and professional judicial system in Morocco, within high ethic standards for effective dispute resolution, and, to facilitate commercial transactions, as well as resolving potential commercial disputes. The components include: 1) improvement of legislative, and regulatory framework for commercial transactions, and resolution of disputes, drafting relevant amendments to existing legislation, and regulations, as well as a modern Commercial Arbitration Code, to streamline processes, and procedures; 2) strengthening of the judicial system's capacity to adjudicate business-related cases, through the introduction of modern techniques, and automated tools, in all commercial courts, for appropriate management of all cases during the litigation process; 3) strengthening the capacity of local Registries of Commerce within the commercial courts, to provide information, and ready access to the public; 4) provision of training to judges, and court administrative staff, upgrading the Institut National de d'Etudes Judiciaries's (INEJ) curriculum, and introducing relevant courses, and information research tools for better management systems; and,


30

5) strengthening the Ministry of Justice capacity in managing judicial, and regulatory information, to ensure project implementation.

1999 WB US$ 250million

Policy Reform Support Loan Project (PRSL) Targeted Thematic Outcomes Judicial and other dispute resolution mechanismsRegulation and competition policyPublic expenditure, financial management and procurementHealth system performance Supporting this Broader Dev't Goal Investment climate (CAP) Investment climate (CAP) Public sector governance (CAP) Health (CAP)

1992-1994

DFID ??? Good Government


31

Annex 4: Selection of Governance Activities in the Arab Region

Time frame


2004/5-2007

OECD UNDP

POGAR

17 million US $

Good Governance for Development (GfD) in the Arab Countries The participating Arab countries (Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Mauritania, Morocco, Oman, Palestine, Sudan, Syria, Tunisia, UAE and Yemen) agreed to lay down the six foundation pillars for reform pertinent to the following areas:

1. Civil Service and Integrity 2. Role of the Judiciary and Enforcement 3. E-Government, Administrative

Simplification and Regulatory Reform 4. The Role of Civil Society and Media in the

Reform of the Public Sector 5. Governance of Public Finance 6. Public Service Delivery

Four phases of implementation

1. Stock Taking 2. Designing the National Action Plans 3. Implementation Strategy and Capacity

Building 4. Programme Evaluation

2004 EU € 7 million European Initiative for Democracy and Human Rights (EIDHR) Sub-region: Middle East and South Mediterranean

EU MEDA Regional Programs ENHANCING THE RULE OF LAW AND GOOD GOVERNANCE Good Governance and Improvement of the Rule of Law was launched in late 2002. With a budget of €6 million it includes three areas of action: 1) training of magistrates, lawyers and clerks and constitution of a permanent Euro-Mediterranean network of legal training; 2) training of police officers and other officials with relevant specialisations for better regional police co-operation; 3) creation of a permanent system of collection of data, of observation and analysis of the migratory phenomena between the Euro-Mediterranean Partners.

Timeframe “Donor” Funds Description Started

2000 UNDP / POGAR

3.6 million US$

The Programme on Governance in the Arab Region To strengthen governance institutions in the Arab states, UNDP launched the Programme on Governance in the Arab Region (POGAR). As a UNDP-funded initiative, POGAR is rooted in


32

national needs and was developed at the request of Arab governments themselves. The programme works in partnership with key governance institutions, including legislatures and judiciaries, as well as with civil society organizations. It furthers the triple pillars of good governance�rule of law, participation, and transparency and accountability�through the following services:

• Rendering policy advice and technical support

• Promoting and brokering policy dialogue

• Creating strategic partnerships • Building the capacity of individuals

and institutions • Developing pilot projects to test

policy options • Networking and sharing knowledge

among government officials and policymakers, members of civil society, academics, donor agencies, and the interested public.

SERVICE LINES

• Improving legislative processes • Making electoral systems more

effective • Expanding access to justice • Making public institutions

accountable • Widening access to information

1999-2000 UNDP US$

3,772,415 Regional Program for Governance This project aims to contribute to the economical and social development of the countries of the region through the creation of an environment in the Arab region where good governance and public resources management are practiced and advocated through partnerships between Governments (central and local), civil society and the private sector.


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Weede, Eric (1986) “Rent-Seeking or Dependency As Explanation for Why Poor People Stay Poor” International Sociology 1:4 (December), p. 421-41. UNDP & Arab Fund for Economic and Social Development (2002) Arab Human Development Report. New York: UNDP. Wurzel, Ulrich 2003 “Meso-level Structures as Preconditions for Collective Action and Social Integration” in: Politics From Above, Politics From Below. Eberhard Kienle ed. London: Saqi, pp. 98-117. Selected Links USAID General: Asia and the Near East, Democracy and Governance http://www.usaid.gov/locations/asia_near_east/sectors/democracy/index.html Egypt: http://www.usaid-eg.org/ Jordan: http://www.usaid.gov/locations/asia_near_east/countries/jordan/jordan.html USAID Strategic Objective 278-009: Social Sector Development and Governance http://www.usaid.gov/policy/budget/cbj2005/ane/pdf/278-009.pdf http://www.usaidjordan.org/


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Morocco: http://rabat.usembassy.gov/Services/USAID/direct.HTM DFID General: Middle East and North Africa, Regional Assistance Plan September 2003 http://www.dfid.gov.uk/pubs/files/rapmenadenglish.pdf Egypt: Kontakt über die Botschaft Jordan: http://www.britishembassy.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=1064571049445 Morocco: Kontakt über die Botschaft

Worldbank: http://www.worldbank.org/wbi/governance/pubs.html.

http://www.worldbank.org/wbi/governance/data.html

http://www.worldbank.org/wbi/governance/govdata2002

http://www.worldbank.org/wbi/governance/data.html#unofficial

http://www.worldbank.org/wbi/governance/data.html#in-country

http://www.worldbank.org/wbi/governance/data.html#datagroup

http://www.worldbank.org/wbi/governance/data.html#generalresearch

http://www.worldbank.org/wbi/governance/data.html#prem (on institutional indicators)

http://www.worldbank.org/wbi/governance/data.html#otherdata (Data Links worldwide)

http://www.worldbank.org/wbi/governance/data.html#surveys

http://www.developmentgateway.org/node/204685/

UNDP: General: http://www.undp.org/regions/arabstates/


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The United Nations Development Programme (UNDP), Regional Bureau for Arab States (RBAS): http://www.undp.org/rbas/ Programme on Governance in the Arab Region (POGAR): http://www.pogar.org/ Egypt: http://www.undp.org.eg/ Jordan: http://www.undp-jordan.org/ Morocco: http://www.pnud.org.ma/

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