Regulatory Impact Assessment in Developing Countries Some Lessons from

Richard W addington 30 November 2005 Content of Paper

A.The benefits of RIA generally. B.The particular benefits of RIA for developing countries. C.How RIA systems might be modified so as to be more effective in developing country environments. D.The challenges of implementing RIA in such environments and more generally. A.The Benefits of RIA

• Improving the quality and efficiency of government interventions

• Enhancing competitiveness (and competition)

• Increasing transparency and accountability

• Reducing opportunities for corruption

• A tool for policy monitoring and evaluation B. The Benefits of RIA for Developing Countries

• Same benefits • Problems more acute – Higher level of regulatory burden – Importance of MSMEs – Greater levels of corruption – Ethnic diversity – Groups that are especially vulnerable High Regulatory Burden in Africa

94%

67%

Advanced countries Industrialising South Asia Central Europe

19.8% Africa

3%

Business Entry Costs as a Percentage of GDP/Capita MSMEs & The Informal Economy

8 0 7 0 6 7 .1 5 9 .4 6 0 5 8 .3 5 7 .9 5 0 4 2 4 1 4 0 3 3 .4 3 2 .8 3 0 1 9 .8 2 0 1 0 0 e a a a ca i ia n on ic ia le ri w n r a o r iv hi f b za e r e l A a n ig sw e m o C b a N t m A B im T o a Z B C in at L

Informal Economy as a Percentage of GDP

1999/2000 Source: World Bank Corruption Transparency International Corruption Perceptions Index, 2003

Country Rank Country 30 Botswana 41 Namibia 48 South Africa 70 Ghana 76 Senegal 78 Mali 83 Malawi 86 Mozambique 88 Madagascar 92 Tanzania Gambia Zambia Ethiopia 106 DRC Zimbabwe Sudan 113 Uganda Sierra Leone Cote D’Ivoire 118 Kenya Diversity in Uganda The Luo Kumam Banyoro Acholi Kakwa Bakonjo/Bamba Alur Iteso Batooro Japadhola Bagisu Banyankore Sebei Karimojong Lugbara Bachwezi Basoga Madi Basamia/ Metu Okebu Bagwere Langi Vulnerable Groups

‹ Micro, Small and Medium-sized Enterprises ‹ Civil Society & Non Governmental Organisations ‹ Children ‹ The different genders ‹ The very poor ‹ People living with HIV/AIDS etc C.Modifying RIA for developing country environments • Common components, different implementation • Capacity an issue • Different emphases (“filters”) • Must not be a burden itself • Collaboration not confrontation Core RIA Framework

1. Title of Proposal 2. Purpose and Intended Effect 3. The Policy Problem 4. Options 5. Impacts 6. Distribution of Impacts 7. (Results of) Consultation 8. Enforcement and Sanctions 9. Monitoring and Evaluation D.The challenges of implementing RIA

• Lack of awareness and acceptance of RIA. • Weak institutional capacity. • Problems of data availability. • Problems with wider policy process. Institutional Issues

New balances of power: • Institutions at the centre. • Centre and line Ministries. • Ministers and officials. Conclusion

• RIA brings benefits to developed and developing countries alike. • Developing countries stand to gain most. • Challenges should not deter adoption. • RIA at any level better than none. • Wider policy process needs attention too.