Benjamin Herzberg World Bank PSD Vice-Presidency

1. PPD Workshop Paris, 2006 Public-Private Dialogue Engaging Stakeholders through Competitiveness Partnerships Benjamin Herzberg World Bank PSD Vice-Presidency 1

2. Going through the maze Infrastructure (transport, energy, waste) Innovation, R&D Training and labor information Logistics & Trade facilitation Contract enforcement Regulatory improvement Corruption Competition Innovation Access to finance

3. Racing to Competitiveness Competitiveness Labor Cost Corruption Red Tape Poor Productivity Costly and unreliable Utilities Logistics.

4. A variety of binding constraints Leading constraints identified by over 24,000 firms in 58 countries Source: Investment Climate Surveys.

5. A variety of investment climate reform policies Learning about good practice Capacity building Reform management Source: WDR05.

6. + But how to structure that engagement? Reform sustainability relies on engaging stakeholders GOVERNMENT STAKEHOLDERS 6

7. Public-private dialogue mechanisms Vietnam, Cambodia, South Africa, Mexico, Bosnia, Ghana, Nigeria, Uganda, Malaysia, Botswana, Japan, Bolivia, Indonesia, Senegal, Tanzania, Bulgaria, Turkey, Cameroon, Cook Islands, Germany, Hungary, Ireland, Kosovo, Malta, Mozambique, Thailand, Mauritius, Etc. Economic Council, Social Council, Gender Coalition, National Competitiveness Committee, Annual Forum, Private Sector Forum, Regional Forum, Deliberation Council, Business Forum, Competitiveness Review Group, High Level Consultative Council, Better Business Initiative, Bulldozer Committee, Investors Advisory Council, Etc. 7

8. Coordinating secretariat Working group 1 Working group 2 Working group 3 Working group 4 Working group 5 Private sector advocates, associations, government representatives, donors Types of structure Vietnam Turkey Bosnia Nigeria 8

9. Types of engagement National forums Series of working groups Regional/local initiatives Investors councils Government-endorsed Time-bound agreements

10. Benefits of umbrella process M&E Diagnostics Solution Design Implementation • Engagement • Definition • Empower stakeholders • Watchdog • Feedback loop • Consensus building • Filtering • Ongoing support • Watchdog • Resources 10

11. Regulatory payoffs 11

12. CHAMPION Strong PUBLIC AUTHORITIES BUSINESS COMMUNITY Weak Strong Strong Strong INSTRUMENTS PPD dimensions Pubic Authorities: Engagement means sufficient capacity, political will and leadership. Business community: Needs to be somehow organized, led and feel a basic sense of security. Champion: Needs credibility, expertise and the ability to get media attention Instruments: Need logistical facilities, seed funds (may also supplement sponsor in QA) 12

13. Institution vs. initiative Selection of participants Credibility and legitimacy PPDs step-by-step Mapping to government structures Implementation follow-up Branding & Logos Secretariat and working groups Communication techniques Rhythm of meetings Types and form of proposals

14. Choosing the right battle Focusing on this will bring the others

15. Format does matter! • Example: • Collecting proposals • FOUR QUESTIONS • Issue at stake • Why is it a problem? • What is the proposed solution? • What are the action items?

16. 1 2 Review and analyze 1 2 3 Dialogue and process Enact and publish Implement and follow-up 1 2 3 4 Verify and measure 1 2 3 4 5 1 Transparency, legitimacy, accountability 16

17. Stakeholder management For • MOBILIZE • Identify them • Assign and coordinate roles • Build consensus • LEVERAGE • Communications • Education • Empowerment • CO-OPT or NEUTRALIZE • Information • Consultation • Diversion • Compensation • Disempowerment • Confrontation Level of support • BYPASS or STEAMROLL • Communications Against Influence Low High

18. Communicating on reform ideas Bosnia Bulldozer initiative, “50 reforms in 150 days” Nigeria PPD Georgia legal and judicial reform From the Protocols for Prosperity... To the Prosperity Garden (Bosnia) Accountability gets specific in Bosnia (corporate governance reform) Cambodia SME credit reform – TV shows on location (SMEs) + Experts Philippines procurement reform 18

19. Issues summary

20. Strategies for challenges 1/3 CHALLENGES Too much influence to a small and unrepresentative group Create opportunities for rent-seeking Reinforce the power of existing elites Be open and transparent Reinforcing vested interest Strong quality control Create a broad base Mongolia CHALLENGES Gives big/FDI businesses a more powerful voice than local SMEs Strengthen associations Over and under representation Reach out equally to entrepreneurs Revisit structure & participants Tanzania, 18% 20

21. Strategies for challenges 2/3 CHALLENGES Becomes ineffective after a promising start. Descends into a talking shop from which little substantive action results. Participants become disillusioned, wasting time and energy. Credibility of public policy suffers. Clear agenda, concrete proposals Sustainability issues Manage expectations Live and let die Bolivia, Nigeria CHALLENGES Rests too heavily on the personal involvement of a senior government figure. Looses impetus when that person leaves. Cannot resist shift in political will Generate bottom up support One man shows Secure written commitment Prepare in advance Botswana 21

22. Strategies for challenges 3/3 CHALLENGES Too closely aligned with political factions Deemed to die with government change Instumentalized by opposition Depoliticize through outreach Political risks Woo parliamentarians Woo local politicians Bosnia CHALLENGES New mechanisms for consultation duplicate the work of existing mechanisms, causing confusion and overburdening participants Include existing institutions Institutional misalignments Use technical ministerial staff Quickly transfer competencies Uganda NF 22

23. The way forward Funding mechanisms (gov. p.s., donors) Sub-national programs Integration to specific country context Clusters / Product markets Post conflict 23