Transcript Role of Regulatory and Institutional Framework in Meeting the

United Nations Economic Commission for Europe
Role of Regulatory and
Institutional Reforms in Meeting
the Challenges of Globalization
Paolo Garonna
Officer-in-Charge
Outline
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Increasing demand for better regulation in the
context of globalization
Fighting Red Tape: the need for institutional
reforms
From global to local and from local to global:
different levels and directions in regulatory reform
The new tools of the information society: soft
regulation, peer pressure, benchmarking
The role of civil society and the private sector
for good governance and institutional reform
United Nations Economic Commission for Europe
Increasing Demand for Regulatory Frameworks
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Appropriate institutional and regulatory frameworks
are needed in order to reap the full benefits of
globalization
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Examples:
- Health: prevent contagion and react to pandemics
- Security: fight against terrorism
- Transition to the market economy: institution
building and public administration reform
- Standards for Transport and the Environment
(UNECE)
- Financial sector reforms
United Nations Economic Commission for Europe
Fighting Red Tape and Over-regulation:
the Need for Institutional Reforms
Barroso to launch Brussels’ biggest deregulation
campaign: more than 60 draft proposals set to be
scrapped (Financial Times, 14 Sept 2005)
United Nations Economic Commission for Europe
The Quality of Regulation
in the ECE Region
(Economic Freedom of the World Indicators, 2005)
9
8
7
6
North. A.
5
EU-25
4
EECA
3
2
1
0
Price controls
Starting
a new
business
Irregular
payments
Other
Business
Regulations
(i.e. P.A.
ef f iciency)
Regulation (i.e.
Credit and
Labour market
regulations,
Trade rules)
United Nations Economic Commission for Europe
The Transition to the Market Economy:
the Key to Success
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What has determined the different patterns and
quality of regulatory reforms in the formerly
centrally planned economies?
- The interplay between reforms and economic
development
- The natural resources curse: success stories in
overcoming the curse
- Regional economic integration (e.g. EU
accession)
United Nations Economic Commission for Europe
Progress on Reforms and
Economic Development
ECE
8
Average annual GDP growth
(1992-2004)
6
4
2
0
-2
-4
1
1.5
2
2.5
3
3.5
4
Reform s progress since 1992
Note: Progress on reforms in ECE member countries is measured by the average of the EBRD Transition
Indicators Scores, 2004.
United Nations Economic Commission for Europe
Life Expectancy and Regulatory Quality
Global
ECE
85
90
Life expectancy at birth (years)
Life expectancy at birth (years)
80
70
60
50
40
30
20
10
80
75
70
65
60
55
0
-3
-3
-2
-1
0
1
Regulatory quality
2
3
-2
-1
0
1
Regulatory quality
United Nations Economic Commission for Europe
2
3
Poverty Reduction
and Regulatory Quality
Global
ECE
Poverty headcount (% of total population)
Poverty headcount (% of total population)
90
80
70
60
50
40
30
20
10
0
-3
-2
-1
0
1
Regulatory quality
2
3
80
70
60
50
40
30
20
10
0
-3
-2
-1
0
1
2
Regulatory quality
United Nations Economic Commission for Europe
3
Schooling and Regulatory Quality
Global
Secondary school enrollment (% of age-group)
Secondary school enrollment (% of age-group)
120
100
80
60
40
20
0
-20
-3
-2
-1
0
ECE
100
1
Regulatory quality
2
3
95
90
85
80
75
70
65
60
55
50
-3
-2
-1
0
1
2
Regulatory quality
United Nations Economic Commission for Europe
3
From Local to Global and from Global to Local:
Different Levels in Regulatory Reform
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At the national level: many examples of best
practice (Hungary, Baltic States, Canada, Iceland,
Finland, Australia, etc.*)
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At the regional level: role of UNECE norms and
standards
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At the global level: MDGs, Monterrey Consensus,
Agenda 21
* Based on the EBRD transition and governance indicators, the World Bank Worldwide
Governance Research Indicators Dataset, and the index of Economic Freedom of the World.
United Nations Economic Commission for Europe
Different Directions in Regulatory Reform
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From global to regional: MDGs, UN Convention
against Transnational Organized Crime
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From regional to global: Fundamental
Principles of Official Statistics, Vehicle
Regulations
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From region to region: TIR Convention, central
bank independence, technological standards
from Asia
United Nations Economic Commission for Europe
Tapping the New Tools of the Information Society:
The Role of Soft Regulation
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Advantages: flexibility, adaptability, userfriendliness, transparency, capacity to mobilize
public opinion
Examples :
- Environmental Performance Reviews
- MDGs
- OECD peer review mechanism
- The Open Method of Coordination in connection
with the EU Lisbon Strategy
A field where regional commissions have
greatly contributed and can contribute more
United Nations Economic Commission for Europe
The Role of Civil Society
and the Private Sector
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Self-regulation in a vibrant democracy and a wellfunctioning market mechanism: stock exchanges,
corporate social responsibility, codes of ethics
Contribution of private sector to government
regulations: e.g. CEFACT, customs regulations
Risks and possible distortions
- Big players versus small & medium enterprises
- The ‘outsiders’: consumers, future generations,
the most vulnerable groups, etc
- Vested interests resisting reforms
United Nations Economic Commission for Europe
• Enhance the role of private players in
national, regional and global governance
• Catalytic function of UNECE and other
regional commissions in:
- bridging national and global reforms
- providing a forum for soft regulation
and dialogue with business and civil
society
United Nations Economic Commission for Europe