International Workshop on Public Private Dialogue February 1 & 2, 2006 Paris

1. The Architecture of Private Public Dialogue: Insights from OECD Countries’ ExperiencesNicolas Pinaud International Workshop on Public Private Dialogue February 1 & 2, 2006 Paris

2. Successful PPD in OECD countries • Japan: the MITI and Japanese corporations until the early 90's • France: the "Trente Glorieuses" (from the 50's to the 70's) • Scandinavian neo-corporatist & “negotiated economies” • Mexico: from 1987 onwards (Economic Pacts, COECE, Economic Deregulation Council) • Korea: the Park Chong Hee era & the Federation of Korean Industry (FKI) ☞

3. Issues • What are the institutional prerequisites of a successful and sustainable PPD? • Is there a most appropriate institutional architecture for PPD processes? • How must PPD arrangements evolve over time to accommodate changes? • What lessons from OECD countries' experiences?

4. The PPD Interaction: Components "Quality" of PPD Interaction Institutional Mechanisms Nature of PPD Participants

5. The PPD Interaction: Objectives Concrete decisions & Policy reforms Strengthening of business sector Durable trust between Business & the State Institutional Mechanisms "Quality" of PPD Interaction Nature of PPD Participants

6. The nature of PPD actors • A developmental State • Autonomy of the State and political elites / private interests & a Vision for economic development • France in the 50's – 60's: the "Keynesian modernizing State“ & “public focal monopoly” (Meisel, 2004) • Korea: "long Korean Confucian tradition of meritocratic civil service” (Fields, 1997) • Japan/MITI: "without doubt the greatest concentration of brainpower in Japan" (Johnson, 1982) And … the World Bank 1993 East Asian Miracles report.

7. The nature of PPD actors • A developmental State • Autonomy of the State and political elites / private interests & a Vision for economic development • Proximity with the private sector: Korea, Japan / India ☞Embedded Autonomy (Evans, 1995) = Connectedness without Capture

8. The nature of PPD actors • An organised private sector and “strong” business associations • Representativeness (voluntary vs. compulsory & State chartered membership) • Analytical capabilities & Ability to feed the process of policy-making • In OECD industrialized countries: private sector think-tanks • Also Mexico in the early 90’s (e.g. NAFTA negotiations, also the Business Coordinating Council)

9. The nature of PPD actors • An organised private sector and “strong” business associations • Representativeness (voluntary vs. compulsory & State chartered membership) • Analytical capabilities & Ability to feed the process of policy-making • Capacity of sectoral private regulation and decision enforcement • Willingness to engage in PPD (other channels of State – Biz interaction) • Benefits expected by the BA (welfare maximising vs. rent-seeking) ☞ Complex strand of literature on the political economy of business associations

10. The Nature of PPD actors Institutional Mechanisms Connectedness without Capture Balance of power "Quality" of PPD Interaction Nature of PPD Participants Developmental State Organized private sector Welfare-maximizing B.A.

11. PPD: Institutional Mechanisms • The PPD “device”: Who? Both a top-down&bottom-up process • High level meetings “Policy champions”, continuity in political leadership, political resolve and commitment at top of State apparatus • Mexico in the 90’s, Korea in the Park’s era. • Permanent working groups at the technical level ... feeding into the policy-making process at the higher levels of government – business interactions • Japan & MITI; Mexico & the Economic Deregulation Council

12. PPD: Institutional Mechanisms • The PPD “device”: How? • Consultative / Deliberative councils with functional authority over certain policy areas • Measurable objectives & targets, clear deadlines • Selective benefits and ‘rewards’ (confidential information, tenders, subsidies & tax allowances, etc.) • Substantial contribution by each participant • Mexico in the 90’s: NAFTA, struggle against inflation / Public tenders, information on government’s policy orientations

13. PPD: Institutional Mechanisms • The PPD “device”: What for? • Specific, limited, and concrete agenda • Mexico in the 90’s: Productivity vs. NAFTA & Disinflation • Timeliness of issues, i.e. associated with contextual incentives (situation of crisis, economic imbalances, strategic decisions to be made, etc.) • e.g. need for reforms: New Zealand Business Round Table in the 80’s • Time-bound discussions

14. Formal PPD and beyond Formal PPD Personal Networks Lobbying Congress Campaigns &Elections Corruption • State – Business interactions: a “portfolio” approach (Schneider, 2005) State Bureaucracy & Political Elites Business Sector

15. Formal PPD and beyond • Fruitful PPD often associated to informal State – Business interactions. • Same background (education,kinship bonds, sociological, etc) • ‘Rub shoulders’ in social networks • From civil service to corporate boardrooms & vice-versa • Numerous examples in OECD countries: • France: “Pantouflage” & “Grandes écoles” • Japan : “Amakaduri” & “Todai-Yakkai-Zaikai” • Korea: “Tuk Chae” & “Taegu-nothern Kyonsang” Mafia • Mexico : « lunch regulation » & governmental participation (Fox government)

16. PPD: the Dynamics • The very nature of PPD is unstable Institutional Mechanisms "Quality" of PPD Interaction Nature of PPD Participants

17. PPD: the Dynamics • Capture (Korea in the 90’s) • Irrelevance • Sidelining democracy (New Zealand in the late 80’s and 90’s) • Ad-hoc and time-bound • Flexible (Mexico in the 90’s) • Inclusive Risks ☞ Case for

18. PPD in OECD Countries: Conclusions Top down & Bottom-up Measurable objectives Clear timeline & Incentives Concrete, timely & limited agenda Concrete decisions & Policy reforms Strengthening of the business sector Durable trust between Business & the State Institutional Mechanisms "Quality" of PPD Interaction Connectedness without Capture Balance of power Nature of PPD Participants Developmental State Organized private sector Welfare-maximizing B.A.

19. PPD in OECD Countries: Conclusions • OECD experiences are no “textbook” patterns of PPD! • Imbalance of power: Korea, France • Japanese bureaucracy: large pockets of inefficiencies • Mexico: Developmental State ??? Pocket of efficiencies instead… • Incestuous State – Business relationship: Korea and Japan, France to a lesser extent • Still, various combinations of these elements have turned out to be a recipe for success ☞ Room for experiment, pragmatism and action