Add to Wishlist. USD Sign in to Purchase Instantly. Overview There is now considerable unanimity that international organizations such as the United Nations, the World Trade Organization WTO , Bretton Woods Institutions and the international economic architecture need to be reformed in order to achieve greater democratic governance to tackle the myriad of challenges facing the world. A multi-actor socio-political, global movement for global democratic governance.
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The World Social Forum WSF has become the focus for a diverse array of movements advancing alternative visions of globalisation. The numerous WSF's have helped to connect activists in an increasingly dense network of advocates for radical social change. Delivered to advanced candidates at The Chicago Institute for Psychoanalysis in , The Chicago Institute Lectures reveal a Kohut in transition, a Kohut wrestling with the creative tension in psychoanalysis between tradition and innovation, between continuity and change, even as Institutions, Incentives and Electoral Participation in Japan:.
In short, new forms may emerge but they frequently lack functionality: what you see is not what you get. I argue that these reform limits fester across the developing world because institutional reforms are commonly adopted to signal the intent to reform, not as efforts to actually change governments. The problem with reforms as signals is that they are frequently not capable of being implemented.
They are devised with little attention to the contextual realities that actually shape and constrain change opportunities, promise overly demanding "best practice" solutions that look impressive but are commonly impossible to reproduce, and are negotiated with narrow sets of champions who seldom have enough influence to make change happen especially with the distributed groups of agents who ultimately have to live with and implement new rules of the game.
There are examples of institutional reforms that are not limited to new forms without function, however. These reforms are not the product of signalling but emerge rather from a creative and endogenous process of change which Lant Pritchett, Michael Woolcock and I call problem-driven iterative adaptation. This type of change notes that more successful reforms are sparked by problems that people cannot ignore not best practice solutions that outsiders say are important.
The reforms emerge as groups of agents address these problems, in an iterative process of experimentation, learning and adaptation not as singular champions commit to pre-designed reform models. Each step in the reform process allows reformers to learn more about how to solve their problem, build political support for the change process they are advocating, and establish new capacities required to implement this change.
Rwanda's Imihigo performance management initiative emerged through such process. This reform emerged after in response to a specific problem: the lack of service delivery in local governments and the way such had stoked inequality in the country before the genocide.
The World Bank needs deep reforms to reflect a changing world order
Spurred by common concern about this, groups began meeting in the late s. These included the president, the minister of local government, other national government officials, and international development specialists. They built on lessons from previous failed efforts to establish local governments and, in , started experimenting. In this context, the validity of legal reforms became subject to an intense self-assessment from the perspective of the Law and Development discipline as a whole, which began to take a different form after the crisis of the liberal paradigm of the s.
Memorandum on Reforming Developing-Country Status in the World Trade Organization
Amartya Sen, in one of the most influential works regarding the redefinition of development following the liberal crisis, argued that the mere perspective of accumulation of wealth and economic growth cannot be treated as an end in itself Sen In contrast, if basic values such as freedom and equality became objectives together with income and economic standards, then the relevance of legal variables would become effectively tangible Santos , Law and Development studies had to be liberated from a purely western debate reflecting western issues and concerns and, although the modernization of law remained necessary, this could not be seen as a sufficient condition for attaining economic development.
Such a revival of the rule of law ideology has clearly dictated much of the policies prescribed by the World Bank in the legal reforms proposed across Africa, Eastern Europe, Asia, and Latin America. While the definition of rule of law itself has remained controversial from a theoretical perspective Pereenboom ; Santos , in practice it has become understood as an institutional regime in which rules are publicly known, clear in meaning, of equal application among all individuals, and where the government and its officials are especially constrained by such laws in order to protect the individual rights of the citizens to which the government must be accountable Carothers , All these elements — transparency, accountability, and clarity — became part of the formal concept of rule of law that the World Bank progressively advocated in developing countries Craig Moreover, given the idea of multiple institutional patterns historically followed by each country or region, it seems that the Bank also has incorporated the idea that a minimum threshold of legal reform later would demand the adoption of specific policies that would not necessarily be interchangeable between each other Pistor ; Davis and Trebilcock In fact, while some scholars point out that the Bank has been far from being a monolithic institution, even with respect to its most fundamental principles Santos , , such a lack of consistency evidently reflected on how they eventually would be translated into the legal reform projects to be carried out in developing countries.
At the same time, such a concept of governance emphasized that the ultimate if not exclusive goal of institutional reforms would be to promote economic growth and to improve the living conditions of the population Shihata , First, governance was characterized by the existence of legal rules that are known in advance by citizens and that must effectively be in force. Likewise, any attempts to modify or remove these rules must follow procedures that are themselves established and known in advance Santos , Second, the application of these legal rules must be performed in accordance with established mechanisms and procedures, while conflicts in their application and interpretation should be settled by an independent judicial body.
Third, good governance means that there should be a strong stance against corruption, here understood as the misuse of public power, office, or authority, with the intent of obtaining private benefit United Nations Development Programme In sum, the promotion of good governance according to the World Bank reform projects meant that economic development became fundamentally dependent on values such as accountability and transparency, under which government officials cannot stand above the law.
As a result of this renewed justification of foreign assistance to institutional change, the World Bank began to carry out its legal reform projects through four main practice groups. The first body, the Legal and Judicial Reform Group, has served as the official discourse of the World Bank on legal reform activities and has supervised their design and implementation throughout the different regions of the globe.
The second branch, the Public Sector Unit, has been responsible for overseeing specific projects on the reform of courts and judicial institutions. The Private Sector Development Group, as it is best known, was formed from a cooperation between three of the main agencies of the World Bank 4 and has been responsible for coordinating policies, programs, and projects toward the development and expansion of private businesses, as well as collaborating more effectively with other international institutions on private sector projects, being ultimately responsible for advising on the design and reform of laws aimed at improving the investment climate in developing countries World Bank It not only allows the measurement of such effects over a fundamental indicator of economic growth — the health and conditions of private businesses and their role in the reduction of poverty World Bank , ix — but also provides a clear common ground for performing a meaningful comparison between macro-regions of the world that seem oppositely different, such as Asia and Latin America.
The Doing Business is an initiative of the World Bank that seeks to encourage institutional reforms by providing objective benchmarks to policymakers. While such reforms can be rather comprehensive and may allow governments a wide degree of discretion in choosing the appropriate means according to their circumstances, many of such benchmarks seek to specifically address legal aspects such as legislation, judicial systems and procedures Davis and Trebilcock For no other reason, a large part of the appeal of the Doing Business emerged from its capacity to mobilize the private sector to lobby for reforms, under the assumption that they were the ultimate catalyst of economic growth Davis and Kruse Perhaps more interestingly, although the previous movement was criticized for disregarding the problem of institutional diversity, the Doing Business remarkably insisted on the idea that all countries can be compared, thus challenging many of the theories of relativism that gained strength during the crisis of the Law and Development scholarship.
As one can note, this assumption seems problematic in the context of the intended global scope of the Doing Business methodology, as some experiences carried out in Asia suggested that soft authoritarianism may often be a contributing factor for achieving stable economic development Tan , Critics to the Doing Business approach are often skeptical that a soft law model based on benchmarks would differ from the previous Law and Development methods, since all countries must conform to a given paradigm assumed to be better, in the same fashion as with the U. Nevertheless, these criticisms tend to ignore that the change of perspective from a U.
More interestingly, under the Doing Business hypothesis, these best practices performed by developing countries may even be replicated in the developed countries, or even recommended to them World Bank , Despite the controversy concerning the global reach of the Doing Business project, the most remarkable innovation of its approach was the concept of benchmark, a change in methodology that put a greater emphasis on the empirical and quantitative aspects of institutions, many of them related to legal and judicial aspects Jensen and Heller , This clear-cut attitude was not only a consequence of the view that all countries are comparable, but also that any initiative to reform a local institution should conform to the empirical realities of the proposed legal model.
Also linked to this philosophy is the greater emphasis that the Doing Business model placed on the periodical evaluation of impacts, as well as on the elaboration of progressive rankings that are ultimately meant to be objective in nature and reflect the dynamic comparability of countries. In this section, the ways in which this approach has been effectively implemented will be analyzed through a comparison between two regions: Asia and Latin America.
According to the data provided by the Doing Business project, Asia seems to be one of the most successful regions concerning the degree and impact of legal reforms among developing countries, together with Central European countries. However, it is not only the intensity and reach of the reforms that have placed the region at the top of the rankings, but especially their continuity and regularity, which indicate a significant degree of commitment and consistent strategy in terms of long-term policymaking.
International Economic Organizations, Developing Country Reforms, and Trade
Nevertheless, it would be misleading to keep this first impression as definitive, since the size and diversity of the region conceals several difficulties faced by some Asian countries. Best practices. The Asian countries that generally are considered as following the best practices are those standing in the top quartile in the Doing Business rankings.
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In general, these countries can be characterized as engaging in broad reforms especially aimed at protecting investors through market-oriented policies, such as the clarification of property rights mainly through reliable registration mechanisms , better contract enforcement and creditor protection, as well as the facilitation of the conditions for foreign and domestic trade. Moreover, regulations regarding tax obligations were all intensively reformed in these countries by targeting the reduction in the burden for private business and procedural simplifications.
These are all strategies that have long been fiercely advocated by the World Bank Burki and Perry , The scale of the reforms promoted by these two countries has been so wide and impacting that it ranged from investor protection to business registration and tax system restructuring. For example, Thailand reported several reforms in the Securities and Exchange Act in order to secure investor rights, especially by enhancing the accountability of directors under civil and criminal liabilities.
In Malaysia, there were major amendments to its Companies Act in order to simplify business registration and allow the use of online systems. With regard to tax reforms, Thailand facilitated the compliance with tax obligations by eliminating a great deal of red tape and introducing online systems for filing and payments.
Reforming International Institutions towards a Global Deal
Perhaps more importantly, it created incentives for avoiding tax evasion by reducing rates for new filing companies, as well as by exempting smaller companies. Tax burdens were also lowered for individuals, to the extent that the cost of transferring property was substantially reduced. The importance of tax reorganization, in the fashion often recommended by the World Bank World Bank , , has also been on the agenda of Malaysia, since this country has strongly reduced corporate income taxes and eliminated several taxes on real property gains.
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All these reforms seem to have been continuously advocated by the World Bank, in part due to the previous success of a paradigm that has long been followed by one country: Singapore, which has been widely admired for its commitment to simplifying the processes for starting up new businesses Tan Not surprisingly, this country stands at the very top of the Doing Business rankings, given its well-known commitment to market-oriented reforms that, each year, seem concerned with different sectors of its economy.
For instance, in the Doing Business Report praised the Singaporean reformers for improving the economic conditions of the construction sector, by making construction permits more flexible. Curiously, the importance given to the construction sector was also shared by another region famous for its business-oriented policies. Hong Kong, which has been assessed by the World Bank as a distinct entity from China, engaged in a strong strategy to improve the speed of permits and remove a considerable number of environmental and labor regulations required for constructing in the region — although this private sector reform might have adverse implications in terms of safety and social risks Klein , Nonetheless, Hong Kong also increased its efforts of improving an aspect of its business environment that is undoubtedly beneficial: the requirements for closing a business.
In this sense, Hong Kong granted trustees more power in bankruptcy proceedings, which would facilitate the liquidation of companies World Bank , Catch-up group. Although Asia has been praised for its commitment to legal reforms in comparison with other macro-regions, it is obvious that this continent cannot be seen as a monolithic group of successful experiences. Indeed, some countries have been clearly struggling in the process of legal reforms, either because they have just passed through a period of human or economic disaster — so that any institutional reform becomes meaningless in comparison with other more urgent local issues — or because their pace of reforms simply has been disappointing.
The latter explanation seems to be the case of the Philippines. Little advance has been made in this country despite its relative political stabilization and efforts to curb corruption. According to the Doing Business report, the Philippines have only improved the electronic system for customs, without any substantial reform in terms of institutional design.
Similarly, Vietnam made some progress with regard to the protection of investors by giving them more information of prospective borrowers. However, in none of these countries, any judicial reform has been significantly achieved — not to mention those in which no reform has been pursued at all Quah , Occasionally, the difficulties in promoting legal reforms are not without reason, as the case of Indonesia illustrates. Plagued with a well-known history of corruption Taylor , the Indonesian government has succeeded fairly in making the country more business friendly in aspects that are relatively immune from corrupt activities, such as improving credit data systems.
However, in areas where corruption constitutes a strong barrier, the country has notably faced problems, especially in clearing hurdles for investments and reducing the capital requirements for new businesses Harding Furthermore, what often seems to prevent any noticeable impact of legal reforms in some Asian countries is their long history of internal conflict and poverty, so that any degree of success or failure becomes difficult to measure. The examples of Cambodia st and Mongolia 64 th are illustrative in this sense.
Cambodia has remarkably engaged in numerous reforms devoted to private sector development, including the enactment of two new laws: a bankruptcy law — the first ever in its history — and a new law for creditor protection. Similarly, although Mongolia in principle could be regarded as an average model of legal reform according to the Doing Business criteria, the transition from a communist government to a market-based economy seems to make most of these efforts ineffective.
Mongolian lawmakers promoted several reforms for facilitating international trade by reducing tax burden on companies, simplifying customs procedures, creating a system of risk management and replacing ex ante with ex post regulations. Nonetheless, Mongolia still lags in its transition to a capitalist economy, when compared to other post-communist countries in Eastern Europe. Although these cases indicate that Asia is far from being a perfect model of legal reform, what distinguishes this region from others in the developing world is that most of its countries maintain a continuous effort to implement the recommendations of the World Bank.
The analysis of the Latin American performance under the Doing Business methodology provides some understanding about the issues faced by this region, when compared to the experience of Asian countries. The best illustration of this contrast is that no single Latin American country managed to stand at the top tier of the ranking, while most of these local governments have failed to promote any significant change in their institutional structures in order to encourage private sector development World Bank Most notable, however, is the fact that several countries seem to even have gone backwards in this effort by making private businesses much more difficult to take off, as the famous cases of Venezuela and Bolivia demonstrate.