Understanding Policy-making in Lebanon: An Application of the Multiple Streams Framework to the 2012 Wage Hike. Lea Bou Khater (American University of Beirut, Lebanon) and Robert Hoppe (University of Twente, Enschede, and American University of Beirut, Lebanon) Abstract This paper is a critical empirical application of the Multiple Streams Framework (MSF) as one of the most frequently used theories in the 'western canon', to a recent case of wage policymaking in Lebanon. In 2011, after more than a decade of agenda denial, wage policy reemerged on the public policy agenda of the Lebanese government. In January 2012, the monthly minimum wage for private sector workers was raised for the first time in many years. Using as primary interpretative focus Multiple Streams Theory (MST), this paper seeks answers to two questions: (1) how and why did the wage issue reemerge on the government agenda in Lebanon at this particular time?; and (2) why were comprehensive, innovative solutions to the wage increase problem rejected in favor of a very modest, incremental wage hike? In terms of research design, this study relies on conventional process tracing and the construction of a detailed timeline of major process events through content analysis of governmental documents and articles and op-eds in the major media, and elite interviews with pivotal policy actors from government, trade unions and issue experts. More importantly, conceptually, this empirical case study of public policymaking in Lebanon provides a unique opportunity for studying the specific characteristics of public policymaking in countries of the Middle East - the Arab world being as good as invisible in comparative policy work. But moreover, it is an application of one of the 'canon' policy process theories in a different political system context. Lebanon is widely still considered an example of consociational democracy, relying on power-sharing and confessional 'federalism' to manage continuous conflicts between its sectarian communities. Events during and since the 1975-1990 civil/proxy war on its territory have thrown the system into severe domestic and international instability. Lebanon's national formal institutions and informal power-sharing arrangements proved to be highly vulnerable to external (regional and even global) conflicts. The use of MST is critical in a double sense. On the one hand, we show how an unquestioned, tacit assumption of 'issue logic' in consolidated, stable democracies pervades both interpretative schemes as typical 'western canon' theorizing. On the other hand, by showing how and why the 'issue logic' of the wage hike policy problem in Lebanon is in fact trumped by a 'regime logic', it becomes possible to amend and enrich the MSF particularly. Understanding Policy-making in Lebanon: An Application of the Multiple Streams Framework to the 2012 Wage Hike Acknowledgment This publication was made possible in part by a grant from the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut. The Civil Society and Policy-making in the Arab World Program is funded by a grant from the Foundation to Promote Open Society. 2 Understanding Policy-making in Lebanon: An Application of the Multiple Streams Framework to the 2012 Wage Hike TABLE OF CONTENT INTRODUCTION ....................................................................................................................................................................... 5 1. METHODOLOGY ........................................................................................................................................................... 6 2. REGIME PROPERTIES OF LEBANESE POLITICS .......................................................................................... 7 3. THE DEVELOPMENT OF WAGE INCREASE AS A POLICY ISSUE .......................................................... 9 4. KINGDON’S MULTIPLE STREAMS FRAMEWORK ..................................................................................... 12 FIRST STREAM: PROBLEMS ..................................................................................................................................................................... 12 SECOND STREAM: POLICY PROPOSALS ............................................................................................................................................... 14 THIRD STREAM: POLITICS ....................................................................................................................................................................... 16 POLICY ENTREPRENEURS AND GODFATHERS ................................................................................................................................... 17 POLICY WINDOW: “PROBLEM POLITICS” AND REGIME LOGIC .................................................................................................... 18 5. DISCUSSIONS AND CONCLUSIONS ................................................................................................................... 26 ANNEX – TIMELINE KINGDON'S MULTIPLE STREAMS AND THE 2012 WAGE HIKE ......................... 29 3 Understanding Policy-making in Lebanon: An Application of the Multiple Streams Framework to the 2012 Wage Hike LIST OF ACRONYMS BTI Bertelsmann Transformation Index CoM Council of Ministers CPI Consumer Price Index GCWL General Confederation of Workers in Lebanon MOL Ministry of Labor MSF Multiple Streams Framework MST Multiple Streams Theory PIC Price Index Committee UCC Union Coordination Committee 4 Understanding Policy-making in Lebanon: An Application of the Multiple Streams Framework to the 2012 Wage Hike INTRODUCTION The majority of Lebanese workers are salaried employees (49%), out of which 19% are informal wage earners1. According to Article 44 of the Code of Labor, “the minimum pay must be sufficient to meet the essential needs of the wage-earner or salary-earner and his family.” According to Article 46, “the minimum pay assessed shall be rectified whenever economic circumstances render such review necessary.” Law No. 36 of 1967 stipulates that the government is to periodically set a minimum wage and to define the increase of living costs and its implementation, while Law No. 2000/138 stipulates an annual wage adjustment. Nevertheless, since the 1990’s the 1967 Law was not applied and the average wage was low when compared to the cost of living while significant inflation has lowered the real wages of employees2. In January 2012 Decree No. 7426 was adopted increasing the monthly minimum wage for private sector employees from $333 USD to $450 USD and providing for a living cost increase of up to $200 USD. This paper seeks to answer two questions: First, what led the wage issue to become prominent on the policy agenda, with decree No.7426 viewed as the solution? Second, what other solutions were considered but decided against, and why? In answering these questions, this paper aims to critically analyze the wage hike using John Kingdon’s theoretical approach of the Multiple Streams Framework (MSF) as an instrument to consider the agenda setting and decision-making processes, as well as the role of policy entrepreneurs. In his work Agendas, Alternatives, and Public Policies, John Kingdon focuses on processes that shape what issues rise to the public agenda and what solutions are likely to be adopted. The choice of Kingdon’s heuristic as an analytical framework for the study of the 2012 wage increase policy in Lebanon hinges on the main underlining assumption of Kingdon’s framework which is a policy process approach that “deals with policy-making under conditions of ambiguity and focuses on the “dynamic, complex, and chaotic nature of political life” which “other frameworks simply assume away”3. In line with the focus of this research on the role of policy entrepreneurs, Kingdon’s framework provides the analytical tools to examine how and under what conditions entrepreneurs manipulate the policy process to push for certain policies, initiate action, and create policy windows. The central argument of Zahariadis’s book Ambiguity and Choice in Public Policy is that policy entrepreneurs play a key role in manipulating factors in the political system to produce public policies in an environment full of ambiguity. Finally, only scant analysis of the 2012 wage hike policy has been done despite its controversial process and political context. Moreover, to date, Kingdon’s approach has not been applied to the analysis of any policy domain in the Arab region. Around 1,900 peer-reviewed journal articles have mentioned or applied 1 The World Bank, “Lebanon. Good Jobs Needed: The Role of Macro Investment, Labor, Education and Social Protection Policies”, Washington DC: The World Bank, 2012. According to the World Bank study, “around 20 percent of the labor force is informal wage employment lacking access to social insurance and labor regulations. Another 30 percent is self‐employed in low productivity activities and is also not covered by the mandatory programs”. According to the International Labour Organization, “Employers, [are those] who hold self-employment jobs (i.e., whose remuneration depends directly on the (expectation of) profits derived from the goods and services; wage-earners or ‘employees, [are those] who get a basic remuneration not directly dependent on the revenue of the employer - among whom countries may need and be able to distinguish ‘employees with stable contracts’ (including "regular employees"); self-employed