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Lessons for reformers: how to launch, implement, and sustain regulatory reform
Gokhan Akinci & Peter Ladegaard
Source of the information:
Governments base their economic development and poverty reduction strategies on efforts to expedite and expand reforms that improve their countries’ business environments. The inefficiencies constraining growth must be addressed mainly at the micro-economic level, through broad legal and regulatory reforms.
Successful reform requires overcoming vested interests in the public and private sectors, fears of change, and the complexities and uncertainties of change in dynamic economic and social environments. This paper focuses on core aspects of the political economy of reform, drawing on case studies of Hungary, Republic of Korea, Mexico, Australia, Italy, and United Kingdom.
The purpose of the paper to:
Identify so-called drivers of reform among successfully reforming countries
Explore how a reform strategy can make optimal use of the opportunities provided by the drivers of change
Suggest how these lessons can be proactively used by other reformers in both developing and high-income countries to design and guide reforms.
Its findings suggest that success is influenced by the following seven drivers: globalisation or competitiveness; crisis; political leadership; unfolding reform synergies; technocrats; changes in civil society; and external pressure. The case studies suggest the following sequence of drivers of change were sequenced to define the reform path:
Step 1: A sense of impending crisis was important at the start of reforms.
Step 2: The first wave of reforms came only when politicians set reform agendas without regard for traditional insider interests.
Step 3: The first wave of bold reforms increased momentum for further change by creating new pressures and allies, and new institutions were built that gave technocrats more power and influence.
Step 4: Reforms became sustainable only when they were institutionalised into the machinery of government, and constituencies for change were mobilised and included in policy processes.
The paper concludes with the following recommendations:
Use a crisis to stimulate reform through political leadership and bipartisan political support through formal agreements, legislation, international agreements, and new institutions.
More successful governments invest simultaneously in strategies such as managing the reform programme, ongoing public-private dialogue, and results monitoring.
Active management and support of the reform process are essential, through dedicated, day-to-day leadership in the public administration.
Implementation is stronger when there is continuous learning through assessing, piloting, innovating, and learning from past experiences.
Aim for systemic change, using one-off reforms to build momentum.
Put transparency at the heart of the process and reform contents.