Competitiveness:
The role of governance
JP Fabri
Global scenario
•
Changing global economic landscape
•
New economic management challenges
•
Today’s volatility underscores the importance of
a competitiveness supporting environment
•
Need to be resilient to external shocks which are
becoming more frequent
Competitiveness
•
It reflects a nation’s ability to provide rising
prosperity to its citizens
•
Competitiveness can be defined as the set of
institutions, policies and factors that determine
the level of productivity of a country
Competitiveness
•
Static component
•
•
Determines a nation’s ability to sustain a high level of
income
Dynamic component
•
It determines the returns to investment hence an
economy’s growth potential
Macroeconomic competitiveness
Microeconomic competitiveness
Firm strategy,
structure &
rivalry
Factor
conditions
Institutions
Demand
conditions
Related &
supporting
industries
Institutions
•
Framework within which individuals, firms and
governments interact to generate income and
wealth in the economy
•
Strong bearing on competitiveness and growth
(Acemoglu et al 2001; Rodrik et al 2002)
Institutions: issues
•
Increase of actors in policy-making process
•
Disappearing boundary between national and
international politics
•
Government is only one actor and not always
the leading one (Rhodes, 1996)
•
Rules without rulers and governing without
government - Governance
Governance
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Universal acceptance of its importance
•
Differences prevail in:
•
•
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Conceptualisations of the subject
Theoretical formulations
Policy prescriptions
Governance - propositions
•
Governance refers to a complex set of
institutions and actors that are drawn from but
also beyond government
•
It transcends formal institutions and rests on the
importance of informal rules too
•
It the blurring of boundaries and responsibilities
for tackling social and economic issues
Governance - propositions
•
It identifies the power dependence involved in
the relationships between institutions involved in
collective action
•
Governance is about autonomous self-governing
networks of actors
•
It sees government as able to use new tools and
techniques to steer and guide
Governance: a working definition
•
Governance refers to the formulation and
stewardship of the formal and informal rules that
regulate the public realm, the arena in which state
as well as economic, social and global actors
interact to make wide-ranging decisions to further
broad-based and sustainable economic growth
and social development as a means to greater
human development
Analysing governance
Governance effort
..will boost GDP by a
factor of close to 3
A 1 standard deviation
increase
in governance effort….
Governance performance
..will boost GDP by a
factor of over 3
A 1 standard deviation
increase
in governance
performance….
Governance is important
for competitiveness, growth
& resilience
Issues & challenges
•
Corruption
•
Urban population growth
•
Lack of national identity
•
Transnational crime
•
Natural disaster management
Critiques to the present model
•
Western blueprint of the good governance
agenda
•
Good governance seen as a technocratic
agenda
•
It may lack realism & feasibility
Key lessons from debate
•
•
•
•
•
•
Importance of local context
‘Best fit’ over ‘best practice’
Realism on reforms
Sequencing of reforms
Refocusing on leadership
‘Good enough’ governance
Pillars of a new framework
The new governance framework should have 3
main pillars
•
•
•
Principles & values as a foundation
Strengthening partnership through inclusion
Learning to adapt & assure quality
Strategic priorities
Strategic priorities
1.
2.
3.
4.
5.
Start from the local context
Promoting responsive institutions
Fostering a resilient society
Supporting inclusive politics
Strengthen strategic partnerships
Making it happen
The role of the centre
Centre of Government
•
It remains indispensable pillars of effective
strategic decision-making for two reasons:
•
•
Provides advice and guidance to prime minister,
government or cabinet
Involved in translating decisions into actionable
‘orders’ for ministries and departments and monitors
implementation
Strategic roles
•
•
•
•
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Ensure holistic policy making
Streamline policy with strategic documents
Ensure budgetary dimension
Ensure work plans reflect strategic priorities
Brief Prime Minister or President
implementation and developments
on
Challenges of CoG
•
Budget cuts: how to innovate & motivate?
•
Complexity in government action
•
The challenge & opportunity of social media
•
Governing in multiple crisis mode
Conclusions
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Institutions and good governance do matter for
competitiveness and development
•
Top priority on reform agendas
•
No one-size-fits-all approach but tailor made
•
Important role of centre of government
THANK YOU