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Public-Private Cooperation for Good Governance: View from a Transition Country


Presented by Mr. Boyko Todorov

Program Director, Center for the Study of Democracy

at the 2000 OECD Forum Partnerships in the New Economy , 26-28 June 2000

1. Establishing good governance mechanisms has been the key challenge of the institution building efforts of transition countries in Central and Eastern Europe for the past ten years. The difficulties stem from the enormous task of rapid transition from closed societies with total state control over the economy to open political democracies and market economies.

2. The experience of Coalition 2000 , a public-private partnership for combating corruption in Bulgaria, suggests that a combination of public-private cooperation in setting an anti-corruption agenda for society and a system for monitoring the level of corruption of public administration are prerequisites both for designing the long term assistance strategy and for evaluating its impact. The experience of the Coalition has also highlighted the key role to be played by civil society organizations in promoting efficient and transparent public services. NGOs emerge to promote a certain public interest or provide a certain public service, which cannot be provided efficiently or at all by markets or by the state. Thus civil society institutions are a mediator between the individual and the state. In this sense, NGOs bear a certain responsibility for the quality of governance provided by the public administration, as well as for the quality of their own public services.

3. Furthermore, as corruption is the negation of the rule of law and an impediment to efficient law enforcement and effective functioning of public institutions, concerned NGOs need to find a common platform with the institutions of the state to work to prevent it. Reducing corruption requires not only the relevant institution-building measures but also creating the social preconditions for establishing the rule of law.

4. The desired result of such measures, however, should be not just public policy reform for better governance but also a fundamental institutional change in society, politics and the economy. Traditional approaches are, therefore, inadequate in this context. A society in transition needs unconventional mechanisms to reform itself - after all, it is old convention that has to be transformed. In a context of profound transformation of institutions and attitudes, it is necessary to find mechanisms that will help root out vested interests and ensure public support. In Bulgaria, building "unusual" alliances turned out to be one of them, probably the most successful one.

5. The public-private partnership process is based on the notion that since corruption occurs at the interface of the public and the private domains only a coalition of institutions of the public and private sectors could effectively tackle it. Awareness building efforts not backed by anti-corruption policies and regulatory reform only feed the vicious circle of cynicism among the public. On the other hand, political commitment will not translate into efficient and transparent public governance mechanisms unless public support is ensured.

6. The logic of public-private cooperation is particularly applicable in the process of structural reform of the economy. In the absence of sufficiently clear, detailed, transparent rules and the necessary civic control, the privatization process is particularly vulnerable to corruption and public officials are able to achieve personal gain to the detriment of the public interest. Also, the lack of control gives free rein to the various forms of illegal activities making up the shadow economy.

7. In general, privatization is fraught with bad governance and corruption risks because state property transformation and market economy development are taking place under the inherited government-dominated models of economic regulation. Therefore, a cooperation between the public sector and government could work towards shedding more light on regulations and procedures would make more transparent the conditions under which the state is selling its property, and help clarify both the intentions and commitments of the buyers. Furthermore, it is necessary to involve civil society structures in the process of elaborating business interaction rules and minimizing the discretionary power of the administration.

8. Liberalization, on the other hand, generally promotes good governance. Consistent economic reforms, which promote free and fair competition and private enterprise, also limit corruption in the private sector.

9. A number of studies have provided evidence that there is a direct link between the level of government intervention in the economy and corruption in society. A consistent economic policy aimed at liberalization and deregulation of private enterprise, macro-economic stabilization and privatization of state-owned property would greatly limit the opportunities for corruption. Thus, as a result of privatization, private owners are forming political pressure groups aimed at restricting government intervention in business and reducing the cost of business transactions.

10. Thеre are three components of the structure of the public-private cooperation approach: a) defining the objectives: building a consensus around a national anti-corruption action agenda; b) promoting public awareness through dissemination and advocacy; c) implementing a regular corruption monitoring system (the basic function of process monitoring is to assess the effectiveness of policy change efforts and to serve as a "watchdog" tool).

11. Bad governance pressures could also appear on a cross border basis. A succession of regional conflicts in the past nearly ten years in Southeast Europe have brought these countries to the pressing necessity to rethink their strategies for development and relations with neighboring countries.

12. On the basis of the history of reforms in the region, it could be summarized that reform efforts will not succeed unless both governments and NGOs participate actively in the design and implementation of a common reform agenda. This is especially valid in areas such as the provision of public services and citizens rights. Corruption, therefore, should be a priority area where regional public-private cooperation needs to be established. Such partnerships are rare in any field in SEE while their fostering is a key to the success and sustainability of reforms. Thus, joining public institutions and civil society organizations in a common effort in designing policy and monitoring democratic developments will be the projects main contribution to the stabilization and democratization of the region of SEE.

13. To this end, the Center for the Study of Democracy and the International Development Law Institute (IDLI), an inter-governmental organization based in Rome, launched the Southeast European Legal Development Initiative (SELDI) (www.seldi.net). The overall goal of SELDI is to contribute to the building of the rule of law and democratic institutions in the countries of SEE. The major methodological pillar of SELDIs implementation activities is the institutionalization of regional public-private cooperation in anti-corruption, judicial reform and the legal aspects of international trade. It will be realized through an open process ensuring the input of all stakeholders in the region.

14. International assistance efforts should emphasize and seek to promote public-private cooperation in introducing good governance standards to transition countries. Often, these efforts focus exclusively on administrative reform. The design of anti-corruption measures by the international community in transition countries should further take into account that corruption is bred and good governance is sustained by wider societal mechanisms than simply the level of capacity of public administration.

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