Sustainable Governance Indicators 2014 and Policy Coherence for Development

Home , Governance

11.03.2014

Dr. Daniel Schraad-Tischler Senior Project Manager Bertelsmann Stiftung

Structure of presentation and guiding questions 2

1. How do we define “sustainable governance”? What are the elements needed?

2. What has been the experience with the new “PCD sensitive” questions in SGI 2014?

3. What do the results tell us in terms of governments’ capacities to act coherently?

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Sustainable Governance Indicators – What is the SGI project? 3

. Indicator-based cross-national comparison of all OECD & EU countries

• Major international index project conducted on a periodical basis • Next edition to be published in spring 2014

. Measuring Sustainable Governance

• 140 qualitative and quantitative indicators • Based on an international network of more than 100 renowned experts • Detailed country reports • Full and free access to all data, indicators and composite indices via the project‘s website

www.sgi-network.org

How do we measure sustainable governance? 4

The SGI’s underlying guiding questions

• How successful are the countries of our sample in achieving sustainable policy outcomes?

• How well-developed are the governance capacities of these countries in terms of long-term-oriented political steering capacities?

• What is the quality of their democratic order?

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SGI 2014: Three analytical pillars 5

Policy Performance Quality of Democracy Governance

• Three classical dimensions of • Addressing four key • Executive capacities (steering, sustainability (economic, dimensions of democracy implementation, learning) social, environmental) • Substantive and procedural • Executive accountability: • Measuring policies and criteria government interaction with outcomes • Focus on quality of institutions societal actors • Distinguishing domestic and and processes • Institutions and processes international activities

Strengths and weaknesses Framework conditions for Reform capacities (need for reform) long-term system stability

Sustainable Policy Performance - Overview 6

Economy Education Environmen- tal Policy

Social Inclusion Labor Market

Health Care

Taxes Families

Pensions Budgets

Integration

Research and Safe Living Innovation Conditions

Stable Global Global international Socioecono- Environmen- Financial mic Fairness tal Protection Markets Regimes

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Quality of Democracy - Overview 7

Governance Index - Overview 8

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Preliminary results for the composite indices „Policy Performance“ and „Governance9 “

Policy Performance Governance

Rank Rank

1 - 11 1 - 11

… …

Rank Rank 25 - 41 25 - 41

PCD sensitive indicators in the SGI 2014 10

Assessments on four key aspects:

1. tackling global social inequalities

2. fostering stable international financial markets

3. promoting global environmental protection regimes

4. international coordination capacities to foster global public goods

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PCD sensitive indicators 11 1) Tackling global social inequalities

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries? 12

Rank Rating

ParagraphParagraph from Luxembourg from Estonia report report:

SinceParagraph 2000,(…) the In country’sJanuary from New 2011,development Zealand the Estonian agency, report: Government Luxembourg approvedDevelopment the Cooperation Strategy (Lux- Development),of Estonian Developmenthas as part of its Cooperation efforts exceeded and the U.N. target for industrializedHumanitarian nations Aid of earmarking 2011 – 2015, 0.7% which of GDP takes toward the development UN MDGs projects. as a After NewNorway Zealand (1.02%) is and highly Sweden committed (1%), Luxembourg to tackling spent global 0.97% of GDP (€317 million)socioeconomic indeparting public development point inequalities.. The assistance strategy Its aid incontains program2012. objectives is and main fields Luxembourgmanagedof activities, plays by an theimportant as Ministrywell roleas major in of micro Foreign partner-financing, Affairs countries. hosting and firms The that priority offer a full range

of microTrade.-partnersfinancial It is products arecoherent former and support andcommunist efficient more than countries in 50% prioritizing of inglobal Eastern funds. Europe From 2013 (i.e., to 2015 …. LuxembourgeconomicMoldova, will be development aUkraine) non-permanent and (…).the member Caucasus of the U.N.region Security (i.e., Council,Georgia); elected and in part

on its strong contributions to cooperation policies. Luxembourg’s development assistance Afghanistan. 26 focuses on training, health care, water treatment, sewage, local development and infrastructureFree access projects, to with global a focus markets on local initiativefor developing through offering education and training programs.countriesEstonia Some 15% isis high activeof the on cooperation in its various agenda. budget fields, The is given governmentbut forspecial humanitarian efforts help, are which includesopenly madeemergency argues in transferring assistance for its anddevelopment knowledge reconstruction inprogram aid, the based fields to on beEUof educationand OECD guidelines.usedpolicy, Since for diplomatic health1992, Lux system-Development and reformtrade has outcomes, and been e responsible-government. and not for the design and implementationsolelyDissemination development of two-thirds of of domesticoutcomes.the country’s expertise development in budget. implementing Furthermore, ICT 20% in of the budget ispublic reserved administration for projects in cooperation and education with 97 approved are the NGOs, areas which in which work in concert with the cooperation and humanitarian action government minister. In 1992 LuxembourgGeographicallyEstonia joined is the acting ,Development New asZealand a trend Assistance focuses-setter. Committee on Generally, countries (DAC) however,in of the the OECD, the supportingAssociationgovernment’s bilateral cooperationof Southeast approach and Asian monitoring is to Nationsfollow aid international flows, (ASEAN) allowing and strategiesLuxembourg in and to work often thewithpolicy Southother Europeanguidelines Pacific, countries. although on development Luxembourg significant assistance. hasfunding also implemented is In parallel guidelines to set by the OECDchanneledgovernment, and the throughEuropean NGOs multilateral Union and to private stop and tax enterprisesevasioninternational from developingwork in the countries. field of The recent DACinternational peer review development. recommended Awareness the promotion raising of policy campaigns coherence in overthe developmentagencies issues. (…) and the improvement of coordination between state fair trade movement is one example of NGO activity (…). departments and Lux-Development for more positive results.

The In January 2011, the Estonian Government approved the Strategy of Estonian Development indicator measures how often 7rms from a given country are alleged to Cooperation and Humanitarian Aid 2011 – 2015, which takes the UN MDGs as a departing point. engage in dumping and related activities. The vertical axis in Figure 5.4 plots The strategy contains objectives and main fields of activities, as well as major partner countries. the log number of antidumping measures taken against 7rms located in that The priority partners are former communist countries in Eastern Europe (i.e., Moldova, Ukraine) country. The data are from the same data source and, too, are based on averages and the Caucasus region (i.e., Georgia); and Afghanistan. Estonia is active in various fields, but over the 200692010 period. special efforts are made in transferring knowledge in the fields of education policy, health system reform and e-government. Dissemination of domestic expertise in implementing ICT in public administration and education are the areas in which Estonia is acting as a trend-setter. http://mark-kayser.com/papers/AnheierStanigKayser2013.pdf Generally, however, the government’s approach is to follow international strategies and policy 6 guidelines on development assistance. In parallel to government, NGOs and private enterprises work in the field of international development. Awareness raising campaigns in the fair trade movement is one example of NGO activity (…). The fourth dimension (vertical axis of Figure 5.5b) is mainly about tensions between advanced countries and developing and underdeveloped countries, and deal substantively with issues of international economic equity, i.e. fairness.

11.03.2014

PCD sensitive indicators 2) fostering stable international financial markets 13

To what extent does the government actively contribute to the effective regulation and supervision of the international financial architecture? 14

Rank Rating

Paragraph from Germany report:

(…) Domestically, the regulatory framework for banks and financial markets is being comprehensively overhauled. The Restructuring Law (Restrukturierungsgesetz) has introduced rules allowing insolvent banks to be closed. This law has become a model for a similar EU regulation, which was under negotiation at the time of writing. Germany was among the first EU countries to introduce a legal obligation for banks to produce “testaments” that define plans in case of the bank’s collapse.

Internationally, Germany pushed strongly for coordinated, international steps to reform the global financial system. It helped the G-20 summit develop into a 24 first-class forum for international cooperation. (…) Although skeptical at first, the German government ultimately revised its position regarding the implementation of an European-Union-level financial-transaction tax (EU FTT). The European Commission proposed to introduce an FTT within the European Union by 2014. The proposal won mixed reviews among experts and policymakers. However, for 11 EU member states including Germany, the FTT’s political benefits of reducing risky derivatives transactions, raising revenues and promoting justice outweigh the probable economic costs, such as a slightly negative effect on growth.

As a euro-area country, Germany has assumed a leading role in the fight against the sovereign debt crisis in Europe. Its maximum financial guarantee for the European Stability Mechanism amounts to €190 billion (…). Moreover, tax havens have become a prime concern for German policymakers. In February 2013, Germany, along with Britain and France, set itself in the vanguard of countering global tax evasion at the G-20 summit in Moscow.

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PCD sensitive indicators 3) global environmental protection regimes 15

To what extent does the government actively contribute to the design and advancement of global environmental protection regimes? 16

Rank Rating

Paragraph from Germany report:

Germany is a driving force in international climate policy, in the development of renewable energies, and in efforts to improve energy and resource efficiency. Since 1994, nature conservation has been enshrined as a national objective in Article 20a of the Basic Law.

The Fukushima meltdown in 2011, the largest nuclear disaster since Chernobyl in 1986, resulted in a highly controversial change in environmental policies. In May 2011, Chancellor Angela Merkel announced that nuclear power would be phased out in Germany by the end of 2022, completely reversing her previous policy. At the global level, the German government actively promotes strategies fostering environmental and climate-friendly development. Since 1990, Germany has reduced its greenhouse-gas emissions by almost 24%. Germany achieves high economic- performance levels with a relatively modest energy consumption by international standards. The World Climate Summit in December 2011 in Durban, South Africa, showed Germany to be one of the prime advocates and architects of a new, post-Kyoto climate order, despite ongoing difficulties in reaching compromise on the specific design of an international climate regime.

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PCD sensitive indicators 4) international coordination capacities 17

To what extent is the government able to collaborate effectively in 18 international efforts to foster global public goods?

Rank Rating

ParagraphParagraph from from Finland Estonia report: report:

TypicallyEngagement, global in public international goods are development best addressed is mainlycollectively the onresponsibility a multilateralof the Ministry basis, of with Foreign cooperation Affairs. in Differentlythe form of internationalfrom EU affairs, laws, here is agreementsany appropriate and protocols. interministerial Finland coordinationis a partner to group several with such leadership modes of cooperationfrom centers and of thusgovernment. contributes actively to the implementation of global frameworks. Finland is committed to and has ratified the Kyoto ProtocolAs in other to the areas, United Estonia Framework is good Convention at adhering on to Climate international Change commitments that came intobut effect rarely in takes 2005. the The lead. Ministry Likewise, of the Estonia Environment is not isvery responsible good at for coordinatingassessing thefurther impact climate of nationalnegotiations. policies Specifically, on the globalwithin thechallenge framework of ofhuman the European development. Union, FinlandAssessment is committed takes placeto bringing in some its national policy areasaverage annual(e.g., environment,emissions down energy, to their IT), 1990 but levels integrated by 2008 coordination – 2012. The andFinnish governmentmonitoring also across adopted policy a foresight fields is reportnon-existent. on long- term climate and energy policy in 2009. In 2012, the government signed a Memorandum of Understanding,Given that policy through collaboration which Finland is still inand its theinfancy, United one States cannot agree speak to about continuesystematic their communication cooperation in betweenpreventing government the proliferation and stakeholders. of weapons ofYet, mass in destruction.some specific Still, areas,Finland such is not as to development be regarded a aid main or orcombatting even an important playerHIV/AIDS, in efforts various to foster interest the provision groups areof global active public partners goals. of Given government a . relatively high level of knowledge and research in Finland as well as adequate(…) existing frameworks for policy coordination and monitoring, several relevant institutional capacities for fostering global governance do exist. They are, however, not utilized to their fullest extent.

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Conclusion – What do the results tell us? 19

High policy 10 coherence/ Sweden global commitment 9 Norway Denmark Finland 8 Estonia Germany Switzerland UK Luxembourg Lithuania 7 France USA Canada Netherlands New Zealand Australia Mexico Iceland Ireland Israel 6 Japan Slovakia Turkey Belgium South Korea Austria Czech Italy Romania Chile Spain Poland 5 Malta Republic Croatia Portugal Slovenia Bulgaria Latvia 4 Hungary Cyprus

3 Greece

Low policy 1 1 2 3 4 5 6 7 8 9 10 coherence/ global Weak international Strong international commitment coordination coordination capacities capacities