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Public-Private Dialogue
Fragility
Source:       Cumulative GDP decline
OECD 2011     from 2007/8 ceiling to
              2009/10 floor
Ireland       -14.6%
Finland       -10.2%
Greece        -8.9%
Italy         -7.0%
Germany       -6.6%
Austria       -5.4%
Netherlands   -5.3%
Spain         -4.9%
Belgium       -4.2%
Portugal        Greece during
              -3.9%
France        -3.9%
                the economic
                crisis of 2007-09
Greece during
Haiti unemployment
  the economic
rate rises from 70%
pre-quake to 80%
  crisis of 2007-09
post-quake
Japan’s car production fell
  Greece during
60.1% after the March
  the economic
earthquake, a reduction of
439,828 (Source: Japan Car
  crisis of 2007-09
Manufacturers Association)
Newsweek, 2011
Public-Private Dialogue


         5th PPD Workshop
          June 1-2-3 2010
               Vienna




        Benjamin Herzberg
             World Bank Group
Sr. Private Sector Development Specialist
       PPD Global Product Specialist




                                            7
What is it, what does it look like?




Herzberg , 2011                                8
What it is


    PPDs are structured mechanisms,
    anchored at the highest practical level,
    coordinated by a light secretariat, and
    aimed at facilitating the discovery
    process by involving a balanced range of
    public and private sector actors in
    identifying, filtering, accelerating,
    implementing, and measuring
    competitiveness actions and policy
    reforms.
Herzberg , 2011                                9
When to use it


    1- As a growth discovery mechanism (whether at economy wide or industry
       level, whether at national or local level)

    2- As a crisis detection mechanism (to capture early warning signals and
       take defensive actions)

    3- As a post-crisis resolution platform (to quickly set up and implement
       mitigation strategies)




Herzberg , 2011                                                                10
What does it look like




Herzberg , 2011                     11
Herzberg , 2011   12
What is in it for me?




Herzberg , 2011                           13
1- Government can prioritize



                                        Competitiveness



 Labor Cost



                                           Corruption




Subramanian, 2006                                       14
2- Entrepreneurs face reduced red tape




Herzberg , 2011                                      15
3- All voices get heard in a structured and fair manner



                      GOVERNMENT


                           +




                       STAKEHOLDERS




Herzberg , 2011                                               16
… which increases chances for reform success

        Structured dialogue                   Workable reforms       Reforms that work



                                          Solution                                Monitoring &
                  Diagnostic                               Implementation
                                           Design                                 Evaluation

         • Engagement           • Consensus building   • Ongoing support • Watchdog
         • Definition           • Filtering            • Watchdog           • Feedback loop
         • Empowerment                                 • Resources



                           PPD contributes to all steps of reform process




Herzberg , 2011                                                                                  17
Zambia process for industrial policies



 Stakeholder Attendance: Private Sector, Government, Organised Labour, Civil Society, Donors
                                                                                                                     Additional
                                                                                   3 Selected Industries           Consultations to
                     Selection Criteria                                                   (and rationale)           Narrow Scope
                                                    Shortlist
                                                                                            Livestock
                       Zambia’s comparative                                        •   Comparative advantage
                                                   • Agro-
                           advantage                 processing &                  •   Growth potential             Beef & Dairy
                                                                      Attendee     •   Rural livelihoods
                         Growth potential            other manu-
                                                                     vote based    •   Linkages & value addition
                        (GDP contribution)           facturing      on selection
                                                   • Forestry
                     Potential for job creation,   • Gemstones
                                                                       criteria             Tourism
   Potential          especially in rural areas    • Horticulture                  • Comparative advantage            Tourism
   Zambian                                                            VOTE
                                                   • Livestock                     • Job creation, esp. rural
  Industries           Current and potential
                                                   • Maize                         • Linkages to other sectors
                       export contributions
                                                   • Minerals &
                         Linkages to other           Metals                               Minerals & Metals
                      sectors of the economy         Processing                              Processing
                                                   • Tourism                       •   Comparative advantage       Copper Mining
                         Amount of value
                                                                                   •   Export contribution          & Fabrication
                         addition involved
                                                                                   •   Value addition
                                                                                   •   Linkages to other sectors




Sheppard, Uy, 2011                                                                                                                  18
4- Population benefits from more good policies

                                                         Learning about
                                                          good practice




                                                          Discovery
                                                          Institution




                                     Capacity building         Reform management



 Source: WDR05.

Herzberg , 2011                                                               19
What is the impact of PPDs?




Herzberg , 2011                                 20
Evidence of development effectiveness

                                                          Aceh           2008
    2005:                                                 Albania        2008
                                                          Bangladesh     2007
    Independent evaluation of 5 Investors Advisory        Belarus        2007
                                                          Cambodia       1999
    Councils in Africa                                    Chad           2008
                                                          Cameroun       2008
                                                          CAR            2007
    2007:                                                 Ethiopia
                                                          Laos
                                                                         2008
                                                                         2005
    Independent evaluation of 3 Business Forums in        Liberia        2007
                                                          Nepal          2008
    Mekong                                                Pakistan       2008
                                                          Sierra Leone   2007
                                                          Romania        2006
                                                          Senegal        2002
    2009:                                                 North Sudan    2007
    Independent evaluation of 30 WBG-sponsored PPDs       South Sudan
                                                          Tanzania
                                                                         2007
                                                                         2002
                                                          Timor Leste    2008
    Over 400 reforms achieved in over 50 distinct areas   Tonga          2005
                                                          Uganda         2004
                                                          Vanuatu        2008
    Economic impact (private sector savings)              Vietnam        1997
                                                          Zambia         2007
    Conservative estimate: $500 millions                  Benin          N/A
                                                          Ghana          2002
                                                          Mali           2004
    Cost effectiveness
    Start-up investment of 100k-200k


Herzberg , 2011                                                                 21
Competitiveness payoffs - Cambodia Garment


•   Two reductions of Export Management Fee has
    saved GMAC members USD 2,2 millions (2008)
•   Reduction of bureaucracy and documentation
    required for import-export procedures;
•   Certificate of Origin now issued within 48 hrs, with reduced cost and
    documentation (2 GMAC staff are positioned at MoC to assist factories in C/O
    applications);
•   Introduction of the ASYCUDA system which has automated export
    documentation, saving time and money;
•   Export procedures made transparent and communicated
•   Reduced the employers’ contribution to the National Social Security Fund from
    1.8% to 0.8%
•   New Union Law established
•   Decade-long Night Shift dispute resolved (night rate from 200% to 130%)



Van Sou Leng, 2009                                                                  22
Cambodia’s garment exports results

                                                          Annual Export

                      $3,500.00

                      $3,000.00                                                                      $2,971.00 $2,982.00
                                                                                             $2,866.00
                                                                                     $2,651.00
                      $2,500.00
                                                                                                              $2,399.00
     In million USD




                                                                         $2,190.00
                      $2,000.00                                  $1,982.00

                                                       $1,609.00
                      $1,500.00
                                              $1,343.00
                                      $1,156.00
                      $1,000.00

                       $500.00

                         $0.00
                                  1        2       3         4        5          6        7       8       9       10
                                                                          Year


Van Sou Leng, 2011                                                                                                        23
Growth impact in Madagascar


  •      Local economic development analysis and sector
         selection through PPD in 3 sub-regions
  •      Mining, tourism, ICT, agribusiness, garments
  •      Collaborative actions on cross-cutting issues
         (investment climate, finance, promotion, MSME) and
         location-specific issues (infrastructure, utilities)
  •      New Investment Law adopted
  •      > 1200 new loans to MSMEs (>$30 mn)
  •      > 9000 new direct jobs
  •      > 3600 new firms registered
  •      > 2000 workers trained




Uy, 2011 (Madagascar Growth Pole project, FPD Africa)           24
PPD impact on road repair in Nosy Be & Fort Dauphin




     Nosy Be Pont cassé                                 RIP 118 : Soanierana –   Rue Camille Valentin
                                                        Ranomafana               Nosy Be
Uy, 2011 (Madagascar Growth Pole project, FPD Africa)                                                   25
Sector growth through PPD

Ethiopia Cut Flowers         Peru Asparagus                 Chile Salmon              South Africa Wine     Morocco Auto Parts    Andhra Pradesh ICT




   Uganda Fishing           Kenya Cut Flowers                Kenya Tea                   Sri Lanka Tea      Nigeria Computers       China Footwear




    China Textile          China HH Appliance          S. Africa HH Appliance       Costa Rica Ecotourism   Tanzania Ecotourism   Malaysia Electronics




Herzberg , Kassim, Majumdar, Sudan, Standford University research team, Watson, Zeng, 2011                                                        26
How to implement PPDs?




Herzberg , 2011                            27
Prerequisites
  Consider 4 dimensions to start it                                 CHAMPION

                                                                 Strong
 Public 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:                            BUSINESS                            Weak            PUBLIC
                                    COMMUNITY                                             AUTHORITIES
                                                 Strong                          Strong
 Needs credibility, expertise
 and the ability to get media
 attention

 Instruments:
 Need logistical facilities, seed
 funds (may also supplement
 champion in QA)

                                                               Strong


                                                                 INSTRUMENTS




Herzberg , 2011                                           28                                       28
Implementation
  Consider 12 dimensions to sustain it over the long run




Herzberg , 2011
Implementation framework: 12 key processes


     1. Mandate and Institutional Alignment
     2. Structure and participation                A number of
                                                   options to
     3. Champions                                  choose from
     4. Facilitator
     5. Outputs
                                                   A number of
     6. Outreach and communications                good and bad
     7. Monitoring and evaluation                  practice to
                                                   learn from
     8. Sub national relevance
     9. Sector-specificity
                                                   A number of
     10. Relevance to FDI
                                                   decisions to
     11. Post-conflict/disaster, crisis response   implement
     12. Development partners


Herzberg , 2011                                                   30
Ten practical tips
                    to get results




Herzberg , 2011                        31
How to get results ?

                                  -1-
                            A lot of work
                      Huge coordination and mediation business




Herzberg , 2011                                                  32
How to get results ?




          -2-
        Design
     consultations
       for PPD




Herzberg , 2011                   33
How to get results ?




                                -3-
                        Strong focus on
                            targeted,
                          measurable
                             refroms




Herzberg , 2011                           34
Several types of outputs




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                  Focusing on this
                  will bring the others




Herzberg , 2011                                                                                                                                                                                                                                                                       35
How to get results ?

                                -4-
                   Simple, explicit organization
                                 Public-Private Mandate

                                       Coordinating secretariat




 Working group 1     Working group 2        Working group 3       Working group 4    Working group 5




                     Private sector advocates, associations, government representatives, donors




Herzberg , 2011                                                                                    36
Work format of the Regional Consultative Council (RCC) to improve the business environment
             and investment climate of the Chairman of Khatlon region

            Meetings of the Regional Consultative Council (RCC) to improve the
            business environment and investment climate of the Chairman of                     Decision-making level
                                      Khatlon region




                      Secretariat of the Regional Consultative Council                  Coordination of activities of working
                                                                                                      groups




                                     Working Groups
               WG on attracting       WG on facilitation of   WG on water security
                investment for           tax payments,        of farmer households
               development of         especially for farmer   and timely payment
            enterprises engaged in        households             for water supply    Level of analysis and project development
                harvesting and                                       services                         solutions
                 processing of
             agricultural products




                                       Roundtables
                            (expanded private sector participation)
                                                                                      Level to identify problems and proposals


Sultanova, Rahmonov, 2011
How to get results ?




          -5-
      A unique,
  transparent and
   disciplined way
  to collect reform
      proposals


Herzberg , 2011                   38
How to get results ?


           -6-
       A filtering
      process that
        ensures
       quality of
       proposed
        reforms


Herzberg , 2011                   39
How to get results ?




Herzberg , 2011                   40
How to get results ?

                                             -7-
                                   A lot of work (again)
                  Simple criterias to ensure quick processing and transparency of process
                                                                                        Propositions
                                                       Propositions     Propositions
                                        Propositions                                    correspondan                          Proposition
                       Propositions                    finalisees par   correspondan
                                            pre-                                           tes aux      Propositions votees   s retenues
      Forum            collectees par
                                        selectionees
                                                          les GT et        tes aux
                                                                                          standards     en séance pleniere     pour plus
                           les GT                      presentees au     criteres de
                                         par les GT                                    internationnau                             tard
                                                         secretariat      fesabilite
                                                                                              x

Groupe de
travail 1                   40              16               6               4               3                  2                 1
Groupe de
travail 2                   40              16               6               4               3                  2                 1
Groupe de
travail 3                   40              16               6               4               3                  2                 1
Groupe de
travail 4                   40              16               6               4               3                  2                 1
Total                      160              64              24              16              12                  8                 4
Ratio                      100%           40%             15%              10%            7.5%                 5%



Herzberg , 2011                                                                                                                       41
How to get results ?

                                                                  -8-
                                                             Good planning
         Bulldozer Committee         Bulldozer Committee                                                                               Bulldozer Committee
                                                                                           Bulldozer Committee                                                                  Reform
         1st Plenary Session         2nd Plenary Session                                                                                 50 REFORMS
                                                                                           3rd Plenary Session                                                                Enactment
          Vetting 8 reforms          Vetting 15 reforms                                                                                   PUBLISHED
                                                                                           Vetting 27 reforms                                                                      by
                                                                                                                                            IN PRESS
                                                                                                                                                                                   3
                                                                                                                                                                              Parliaments

                                                                                                                                                            Joint
                                    BC                                                  BC                                  BC presents                  Parliament     3 Govts
                               Public meeting                                      Public meeting                           50 reforms to                Meeting in     give their
                                 MOSTAR                                              ZENICA                                CoM, RS, FBiH                  National    amendments
                                                                                                                              in JOINT                    Theatre       package
                                                                                                                           GOVERNMENT                      with BC       to PAs
                         BC                                                    BC                                            SESSION                                      under
                    Public meeting                                        Public meeting
                                                                                                                                                                         “urgent
                      TUZLA                                                 BRCKO
                                                                                                                                                                       procedure”

       BC                                                              BC
  Public meeting                                                  Public meeting
  BANJA LUKA                                                        ORASJE

                                                    HR meeting Young                                      HR Press Conf.
                                                     Entrepreneurs                                        To Present BC
                                                       TRAVNIK                                             50 reforms




Nov 12      Dec 17 Jan 16        Jan 27    Jan 29       Feb 07    Feb 12 Feb 13      Feb 20      Feb 25          Mar 03       Mar 12        Mar 24           Mar 25      Apr 3       Apr 22




 Herzberg , 2011                                                                                                                                                                         42
How to get results ?

                            -9-
                  Strong convincing power




Herzberg , 2011                             43
How to get results ?




Azhar, 2010                      44
How to get results ?


          -10-
       Monitoring
      process and
       evaluating
        impacts
                                  Issue           1.0   2.0   3.0   4.0   5.0   6.0   7.0   8.0   9.0   10.0   11.0   12.0   13.0   Average
                                            1.0   -     -     1.0   2.0   1.0   2.0   2.0   3.0                 2.0    2.0    1.0         1.5
                                            2.0   -     -     1.0   1.0   1.0                     -      -      -      2.0    -           0.5
                                            3.0   -     -     1.0   2.0   2.0   2.0   1.0   3.0   1.0    2.0                  1.0         1.4
                                            4.0   -     1.0   1.0   1.0   1.0   2.0   1.0   2.0   2.0    -      -      1.0    -           0.9
                                            5.0   -     1.0   1.0   2.0   2.0   3.0   2.0   2.0   -      1.0    -      2.0    -           1.2
                                            6.0   -     -     -     2.0   1.0   2.0         3.0   -      2.0    -      3.0    -           1.1
                                  Average         -     0.3   0.8   1.7   1.3   2.2   1.5   2.6   0.6    1.0    0.4    2.0    0.3         1.1




Herzberg , 2011                                                                                                                                 45
Tools and techniques for monitoring + evaluation




Herzberg , 2011                                               46
How to start and exit PPD?




Herzberg , 2011                                47
PPDs are risky business but risk is manageable

     Reinforcing vested interest                  (e.g. Mongolia)

                       Be open and transparent – Publicize quality control – Broad based

     Over and under representation                       (e.g. Tanzania, 18%)

                         Strengthening BMOS – Equal representation – Periodic review

     Sustainability issues            (e.g. Bolivia)

                      Clear agenda and proposals – Manage expectations – Live and let die

     One man shows             (e.g. Botswana)

                  Foster bottom-up support – Secure written commitment – Prepare transition

     Political risks      (e.g. Bosnia)

                        Depoliticize through outreach – Woo parliamentarians – Go local

     Institutional misalignments                   (e.g. Uganda NF)

                  embrace institutions – Use technical ministerial staff – Transfer competencies

Herzberg , 2011                                                                                    48
Initiative or institution?




                  Public authorities    Private sector




Herzberg , 2011                                          49
Life and death of a PPD mechanism

                          Phase 1           Phase 2                   Phase 3


  Results         Trust                  HIGH
                                                                            Institutions
                  Education             IMPACT
                  Discovering what     RESULTS
                  works / What                                                  BMOs
                  doesn’t                                      Exit

                  Setting up
                  production         More capacity
                                                                            Permanent brokering
                  process            Better production
                                     Better product

                           EARLY     More conflict
                          RESULTS
                                                         Ownership without capacity


                                                                                           Time
                     1 to 3 years     1 to 3 years
Herzberg , 2011                                                                               50
Linking the PPD to other reforms processes




                                                                                                                                                       Reform Unit
        SEZ                                                                                                                       Value
                                                                                                                                  chain
                                                                                                                   Clusters


             Regulatory
             simplification
                                          Process Mapping: An Illustration
                                                                                                                              RIA and regulation review process
                                        Office No. 1                               Office No. 2    Office No. 3


          Applicant        Clerk 1        Clerk 2       Clerk 4      Clerk 5       Clerk No. 3      Inspector



                           Reviews        Receives
          Files request   application    application
          for approval       and            and
                          documents      documents



              Pays
                                                                                   Accepts fee
              fee




            Provides
            copy of
            Receipt                        Assigns
                                                                                  Issues Receipt
                                          Inspector



           Receives                                                               Forwards fee
          Approval or                                                             for deposit to
           Deficiency                                                               municipal
            Letter                        Receives                                   account
                                        and reviews
                                         Inspection
                                           Report
                                                        Receives                                      Contacts
                                                       Request for                                    Applicant
                                                       Approval or
          Municipal                                     Deficiency
           Official                      Prepares &      Letter
                                          Transmits
                                         Request for                                                  Conducts
           Signs &                       Approval or
           Returns                                                                                   Inspection
                                          Deficiency
          Approval or                       Letter                    Mails
           Deficiency                                   Prepares     Approval
            Letter                                     Approval or      or
                                                       Deficiency    Deficiency
                                                                      Letter                          Prepares
                                                         Letter
                                                                                                       Report


                                                       Transmits
                                                        Signed
                                                       Approval or
                                                                                                   Sends copy to
                                                       Deficiency
                                                                                                      Clerk 2
                                                         Letter




Herzberg , 2011                                                                                                                                                   51
How to share
                  experiences, get
                   good practice
                  material, tools?



Herzberg , 2011                      52
www.publicprivatedialogue.org
Community of practice
KM Website                          Workshops                            Donor partnerships
Charter of good practice            2006 PPD Workshop                    OECD
Lessons learned papers
                                    (Paris, 30 countries represented)    (on implementation guidelines)
                                    2007 PPD Workshop                    DFID
Interactive PPD handbook
                                    (Douala, 7 countries represented)    (co-funding of KM and projects)
50 case studies                     2008 PPD Workshop                    GTZ
Operational documents               (Dakar, 8 countries represented)     (co-implementation of PPD projects)
Templates
                                    2009 PPD Workshop                    EBRD
                                    (Vienna, 20 countries represented)   (co-implementation of PPD projects)
M&e Tools
                                    2010 PPD Workshop                    USAID
Workshop materials                  (Vienna, 23 countries represented)   (our PPD training to their PSD staff)
                                    2011 PPD Workshop                    Catalonia ACC10
                                    (Vienna, 20 countries represented)   (research partnership)

Tools
Implementation             Diagnostic tool              M&E Tools for PPD secretariats
  guidelines




Herzberg , 2011                                                                                           53
http://www.facebook.com/publicprivatedialogue




Herzberg , 2011                                           54
Thank you!



                   Benjamin Herzberg
                    World Bank Group
             bherzberg@worldbank.org




                                   55
Fragility
agility
Public-Private Dialogue

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Public-Private Dialogue

  • 3. Source: Cumulative GDP decline OECD 2011 from 2007/8 ceiling to 2009/10 floor Ireland -14.6% Finland -10.2% Greece -8.9% Italy -7.0% Germany -6.6% Austria -5.4% Netherlands -5.3% Spain -4.9% Belgium -4.2% Portugal Greece during -3.9% France -3.9% the economic crisis of 2007-09
  • 4. Greece during Haiti unemployment the economic rate rises from 70% pre-quake to 80% crisis of 2007-09 post-quake
  • 5. Japan’s car production fell Greece during 60.1% after the March the economic earthquake, a reduction of 439,828 (Source: Japan Car crisis of 2007-09 Manufacturers Association)
  • 7. Public-Private Dialogue 5th PPD Workshop June 1-2-3 2010 Vienna Benjamin Herzberg World Bank Group Sr. Private Sector Development Specialist PPD Global Product Specialist 7
  • 8. What is it, what does it look like? Herzberg , 2011 8
  • 9. What it is PPDs are structured mechanisms, anchored at the highest practical level, coordinated by a light secretariat, and aimed at facilitating the discovery process by involving a balanced range of public and private sector actors in identifying, filtering, accelerating, implementing, and measuring competitiveness actions and policy reforms. Herzberg , 2011 9
  • 10. When to use it 1- As a growth discovery mechanism (whether at economy wide or industry level, whether at national or local level) 2- As a crisis detection mechanism (to capture early warning signals and take defensive actions) 3- As a post-crisis resolution platform (to quickly set up and implement mitigation strategies) Herzberg , 2011 10
  • 11. What does it look like Herzberg , 2011 11
  • 13. What is in it for me? Herzberg , 2011 13
  • 14. 1- Government can prioritize Competitiveness Labor Cost Corruption Subramanian, 2006 14
  • 15. 2- Entrepreneurs face reduced red tape Herzberg , 2011 15
  • 16. 3- All voices get heard in a structured and fair manner GOVERNMENT + STAKEHOLDERS Herzberg , 2011 16
  • 17. … which increases chances for reform success Structured dialogue Workable reforms Reforms that work Solution Monitoring & Diagnostic Implementation Design Evaluation • Engagement • Consensus building • Ongoing support • Watchdog • Definition • Filtering • Watchdog • Feedback loop • Empowerment • Resources PPD contributes to all steps of reform process Herzberg , 2011 17
  • 18. Zambia process for industrial policies Stakeholder Attendance: Private Sector, Government, Organised Labour, Civil Society, Donors Additional 3 Selected Industries Consultations to Selection Criteria (and rationale) Narrow Scope Shortlist Livestock Zambia’s comparative • Comparative advantage • Agro- advantage processing & • Growth potential Beef & Dairy Attendee • Rural livelihoods Growth potential other manu- vote based • Linkages & value addition (GDP contribution) facturing on selection • Forestry Potential for job creation, • Gemstones criteria Tourism Potential especially in rural areas • Horticulture • Comparative advantage Tourism Zambian VOTE • Livestock • Job creation, esp. rural Industries Current and potential • Maize • Linkages to other sectors export contributions • Minerals & Linkages to other Metals Minerals & Metals sectors of the economy Processing Processing • Tourism • Comparative advantage Copper Mining Amount of value • Export contribution & Fabrication addition involved • Value addition • Linkages to other sectors Sheppard, Uy, 2011 18
  • 19. 4- Population benefits from more good policies Learning about good practice Discovery Institution Capacity building Reform management Source: WDR05. Herzberg , 2011 19
  • 20. What is the impact of PPDs? Herzberg , 2011 20
  • 21. Evidence of development effectiveness Aceh 2008 2005: Albania 2008 Bangladesh 2007 Independent evaluation of 5 Investors Advisory Belarus 2007 Cambodia 1999 Councils in Africa Chad 2008 Cameroun 2008 CAR 2007 2007: Ethiopia Laos 2008 2005 Independent evaluation of 3 Business Forums in Liberia 2007 Nepal 2008 Mekong Pakistan 2008 Sierra Leone 2007 Romania 2006 Senegal 2002 2009: North Sudan 2007 Independent evaluation of 30 WBG-sponsored PPDs South Sudan Tanzania 2007 2002 Timor Leste 2008 Over 400 reforms achieved in over 50 distinct areas Tonga 2005 Uganda 2004 Vanuatu 2008 Economic impact (private sector savings) Vietnam 1997 Zambia 2007 Conservative estimate: $500 millions Benin N/A Ghana 2002 Mali 2004 Cost effectiveness Start-up investment of 100k-200k Herzberg , 2011 21
  • 22. Competitiveness payoffs - Cambodia Garment • Two reductions of Export Management Fee has saved GMAC members USD 2,2 millions (2008) • Reduction of bureaucracy and documentation required for import-export procedures; • Certificate of Origin now issued within 48 hrs, with reduced cost and documentation (2 GMAC staff are positioned at MoC to assist factories in C/O applications); • Introduction of the ASYCUDA system which has automated export documentation, saving time and money; • Export procedures made transparent and communicated • Reduced the employers’ contribution to the National Social Security Fund from 1.8% to 0.8% • New Union Law established • Decade-long Night Shift dispute resolved (night rate from 200% to 130%) Van Sou Leng, 2009 22
  • 23. Cambodia’s garment exports results Annual Export $3,500.00 $3,000.00 $2,971.00 $2,982.00 $2,866.00 $2,651.00 $2,500.00 $2,399.00 In million USD $2,190.00 $2,000.00 $1,982.00 $1,609.00 $1,500.00 $1,343.00 $1,156.00 $1,000.00 $500.00 $0.00 1 2 3 4 5 6 7 8 9 10 Year Van Sou Leng, 2011 23
  • 24. Growth impact in Madagascar • Local economic development analysis and sector selection through PPD in 3 sub-regions • Mining, tourism, ICT, agribusiness, garments • Collaborative actions on cross-cutting issues (investment climate, finance, promotion, MSME) and location-specific issues (infrastructure, utilities) • New Investment Law adopted • > 1200 new loans to MSMEs (>$30 mn) • > 9000 new direct jobs • > 3600 new firms registered • > 2000 workers trained Uy, 2011 (Madagascar Growth Pole project, FPD Africa) 24
  • 25. PPD impact on road repair in Nosy Be & Fort Dauphin Nosy Be Pont cassé RIP 118 : Soanierana – Rue Camille Valentin Ranomafana Nosy Be Uy, 2011 (Madagascar Growth Pole project, FPD Africa) 25
  • 26. Sector growth through PPD Ethiopia Cut Flowers Peru Asparagus Chile Salmon South Africa Wine Morocco Auto Parts Andhra Pradesh ICT Uganda Fishing Kenya Cut Flowers Kenya Tea Sri Lanka Tea Nigeria Computers China Footwear China Textile China HH Appliance S. Africa HH Appliance Costa Rica Ecotourism Tanzania Ecotourism Malaysia Electronics Herzberg , Kassim, Majumdar, Sudan, Standford University research team, Watson, Zeng, 2011 26
  • 27. How to implement PPDs? Herzberg , 2011 27
  • 28. Prerequisites Consider 4 dimensions to start it CHAMPION Strong Public 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: BUSINESS Weak PUBLIC COMMUNITY AUTHORITIES Strong Strong Needs credibility, expertise and the ability to get media attention Instruments: Need logistical facilities, seed funds (may also supplement champion in QA) Strong INSTRUMENTS Herzberg , 2011 28 28
  • 29. Implementation Consider 12 dimensions to sustain it over the long run Herzberg , 2011
  • 30. Implementation framework: 12 key processes 1. Mandate and Institutional Alignment 2. Structure and participation A number of options to 3. Champions choose from 4. Facilitator 5. Outputs A number of 6. Outreach and communications good and bad 7. Monitoring and evaluation practice to learn from 8. Sub national relevance 9. Sector-specificity A number of 10. Relevance to FDI decisions to 11. Post-conflict/disaster, crisis response implement 12. Development partners Herzberg , 2011 30
  • 31. Ten practical tips to get results Herzberg , 2011 31
  • 32. How to get results ? -1- A lot of work Huge coordination and mediation business Herzberg , 2011 32
  • 33. How to get results ? -2- Design consultations for PPD Herzberg , 2011 33
  • 34. How to get results ? -3- Strong focus on targeted, measurable refroms Herzberg , 2011 34
  • 35. Several types of outputs The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again. Focusing on this will bring the others Herzberg , 2011 35
  • 36. How to get results ? -4- Simple, explicit organization Public-Private Mandate Coordinating secretariat Working group 1 Working group 2 Working group 3 Working group 4 Working group 5 Private sector advocates, associations, government representatives, donors Herzberg , 2011 36
  • 37. Work format of the Regional Consultative Council (RCC) to improve the business environment and investment climate of the Chairman of Khatlon region Meetings of the Regional Consultative Council (RCC) to improve the business environment and investment climate of the Chairman of Decision-making level Khatlon region Secretariat of the Regional Consultative Council Coordination of activities of working groups Working Groups WG on attracting WG on facilitation of WG on water security investment for tax payments, of farmer households development of especially for farmer and timely payment enterprises engaged in households for water supply Level of analysis and project development harvesting and services solutions processing of agricultural products Roundtables (expanded private sector participation) Level to identify problems and proposals Sultanova, Rahmonov, 2011
  • 38. How to get results ? -5- A unique, transparent and disciplined way to collect reform proposals Herzberg , 2011 38
  • 39. How to get results ? -6- A filtering process that ensures quality of proposed reforms Herzberg , 2011 39
  • 40. How to get results ? Herzberg , 2011 40
  • 41. How to get results ? -7- A lot of work (again) Simple criterias to ensure quick processing and transparency of process Propositions Propositions Propositions Propositions correspondan Proposition Propositions finalisees par correspondan pre- tes aux Propositions votees s retenues Forum collectees par selectionees les GT et tes aux standards en séance pleniere pour plus les GT presentees au criteres de par les GT internationnau tard secretariat fesabilite x Groupe de travail 1 40 16 6 4 3 2 1 Groupe de travail 2 40 16 6 4 3 2 1 Groupe de travail 3 40 16 6 4 3 2 1 Groupe de travail 4 40 16 6 4 3 2 1 Total 160 64 24 16 12 8 4 Ratio 100% 40% 15% 10% 7.5% 5% Herzberg , 2011 41
  • 42. How to get results ? -8- Good planning Bulldozer Committee Bulldozer Committee Bulldozer Committee Bulldozer Committee Reform 1st Plenary Session 2nd Plenary Session 50 REFORMS 3rd Plenary Session Enactment Vetting 8 reforms Vetting 15 reforms PUBLISHED Vetting 27 reforms by IN PRESS 3 Parliaments Joint BC BC BC presents Parliament 3 Govts Public meeting Public meeting 50 reforms to Meeting in give their MOSTAR ZENICA CoM, RS, FBiH National amendments in JOINT Theatre package GOVERNMENT with BC to PAs BC BC SESSION under Public meeting Public meeting “urgent TUZLA BRCKO procedure” BC BC Public meeting Public meeting BANJA LUKA ORASJE HR meeting Young HR Press Conf. Entrepreneurs To Present BC TRAVNIK 50 reforms Nov 12 Dec 17 Jan 16 Jan 27 Jan 29 Feb 07 Feb 12 Feb 13 Feb 20 Feb 25 Mar 03 Mar 12 Mar 24 Mar 25 Apr 3 Apr 22 Herzberg , 2011 42
  • 43. How to get results ? -9- Strong convincing power Herzberg , 2011 43
  • 44. How to get results ? Azhar, 2010 44
  • 45. How to get results ? -10- Monitoring process and evaluating impacts Issue 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 Average 1.0 - - 1.0 2.0 1.0 2.0 2.0 3.0 2.0 2.0 1.0 1.5 2.0 - - 1.0 1.0 1.0 - - - 2.0 - 0.5 3.0 - - 1.0 2.0 2.0 2.0 1.0 3.0 1.0 2.0 1.0 1.4 4.0 - 1.0 1.0 1.0 1.0 2.0 1.0 2.0 2.0 - - 1.0 - 0.9 5.0 - 1.0 1.0 2.0 2.0 3.0 2.0 2.0 - 1.0 - 2.0 - 1.2 6.0 - - - 2.0 1.0 2.0 3.0 - 2.0 - 3.0 - 1.1 Average - 0.3 0.8 1.7 1.3 2.2 1.5 2.6 0.6 1.0 0.4 2.0 0.3 1.1 Herzberg , 2011 45
  • 46. Tools and techniques for monitoring + evaluation Herzberg , 2011 46
  • 47. How to start and exit PPD? Herzberg , 2011 47
  • 48. PPDs are risky business but risk is manageable Reinforcing vested interest (e.g. Mongolia) Be open and transparent – Publicize quality control – Broad based Over and under representation (e.g. Tanzania, 18%) Strengthening BMOS – Equal representation – Periodic review Sustainability issues (e.g. Bolivia) Clear agenda and proposals – Manage expectations – Live and let die One man shows (e.g. Botswana) Foster bottom-up support – Secure written commitment – Prepare transition Political risks (e.g. Bosnia) Depoliticize through outreach – Woo parliamentarians – Go local Institutional misalignments (e.g. Uganda NF) embrace institutions – Use technical ministerial staff – Transfer competencies Herzberg , 2011 48
  • 49. Initiative or institution? Public authorities Private sector Herzberg , 2011 49
  • 50. Life and death of a PPD mechanism Phase 1 Phase 2 Phase 3 Results Trust HIGH Institutions Education IMPACT Discovering what RESULTS works / What BMOs doesn’t Exit Setting up production More capacity Permanent brokering process Better production Better product EARLY More conflict RESULTS Ownership without capacity Time 1 to 3 years 1 to 3 years Herzberg , 2011 50
  • 51. Linking the PPD to other reforms processes Reform Unit SEZ Value chain Clusters Regulatory simplification Process Mapping: An Illustration RIA and regulation review process Office No. 1 Office No. 2 Office No. 3 Applicant Clerk 1 Clerk 2 Clerk 4 Clerk 5 Clerk No. 3 Inspector Reviews Receives Files request application application for approval and and documents documents Pays Accepts fee fee Provides copy of Receipt Assigns Issues Receipt Inspector Receives Forwards fee Approval or for deposit to Deficiency municipal Letter Receives account and reviews Inspection Report Receives Contacts Request for Applicant Approval or Municipal Deficiency Official Prepares & Letter Transmits Request for Conducts Signs & Approval or Returns Inspection Deficiency Approval or Letter Mails Deficiency Prepares Approval Letter Approval or or Deficiency Deficiency Letter Prepares Letter Report Transmits Signed Approval or Sends copy to Deficiency Clerk 2 Letter Herzberg , 2011 51
  • 52. How to share experiences, get good practice material, tools? Herzberg , 2011 52
  • 53. www.publicprivatedialogue.org Community of practice KM Website Workshops Donor partnerships Charter of good practice 2006 PPD Workshop OECD Lessons learned papers (Paris, 30 countries represented) (on implementation guidelines) 2007 PPD Workshop DFID Interactive PPD handbook (Douala, 7 countries represented) (co-funding of KM and projects) 50 case studies 2008 PPD Workshop GTZ Operational documents (Dakar, 8 countries represented) (co-implementation of PPD projects) Templates 2009 PPD Workshop EBRD (Vienna, 20 countries represented) (co-implementation of PPD projects) M&e Tools 2010 PPD Workshop USAID Workshop materials (Vienna, 23 countries represented) (our PPD training to their PSD staff) 2011 PPD Workshop Catalonia ACC10 (Vienna, 20 countries represented) (research partnership) Tools Implementation Diagnostic tool M&E Tools for PPD secretariats guidelines Herzberg , 2011 53
  • 55. Thank you! Benjamin Herzberg World Bank Group bherzberg@worldbank.org 55