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Homemade regulatory reform policy

M S Siddiqui
25 Jan 2023 00:01:35 | Update: 25 Jan 2023 00:01:35
Homemade regulatory reform policy

The issues of governance are at the center of many of the most pressing challenges confronting countries throughout the Asian and Pacific region today, although there is a consensus that the rule of law and good governance are the foundation for achieving sustainable development goals. Nations cannot expect economic development without proper functioning institutions of governance based on the rule of law.  At the core of our dark experience lies the ugly truth that there was an absence of transparency, accountability, public interest, and public responsibility.

Economies in transition in Asia are grappling with redefining the role of the state, shifting the balance between central and local power, and providing civil service employees with appropriate skills for managing a market economy.

Recognizing the importance of rule of law and good governance, many Countries have taken up legal and judicial reforms, including judicial training, development of new laws and legal institutions, and capacity-building. . Each nation’s path to good governance is different, depending on culture, geography, political and administrative traditions, economic conditions, and many other factors.

The then policy makers of Bangladesh started reform in late 80s and the major reforms in the early years include reduction of subsidy in agriculture; some measures in exchange rate adjustment, massive monetary reform to reduce inflation and some more de-regulatory measures to enhance the role of private enterprise. The reduction of subsidy of agricultural is a debatable issue.

Bangladesh came out as implementation of a package of structural adjustment policies under the auspices of the World Bank and the IMF in 1980s and early 1990s. Bangladesh is one of the first 35 countries which adopted Bretton Woods institution sponsored Structural Adjustment

Program (SAP). It started with World Bank structural and sectoral adjustment loans (SALs and SECLs) in 1980. IMF introduced three-year structural adjustment facility (SAF) in 1986 in Bangladesh.

The Korean government abolished 5,958 regulations and revised 2,981 regulations in 1998 and 1999. This means that more than half of a total of 11,125 regulations were eliminated or rationalised during these two years.

The recent goal of Korean government in areas of regulatory reforms is improving and enhancing the regulatory quality and also raising national competitiveness at the level of advanced countries. With this goal, it reoriented the reform process away from simply reducing the number of regulations to a greater focus on regulatory quality.

The local business community regards corruption as the second most important impediment to growth, after poor electricity supply. Lack of confidence in the legal system is the main concern of investors in Bangladesh. It can definitely help accelerating economic growth as well as poverty reduction by reducing corruption in government bodies.

What is important to note in the above analysis is that it was not the mere availability of legislation that ensured economic growth, but the ‘institutions’ which helped enforce them. Generally, the success of a legislation can be gauged on the following areas:

(i) Design i.e. developing the law in a participatory manner,

(ii) Implementation i.e. mechanism for application or enforcement of the law,

(iii) Monitoring i.e. system of reviewing the performance of law, and

(iv) Revision i.e. modification of law where necessary to achieve the objectives of legislation.

In most countries, while there is understandable enthusiasm in the design phase, the real challenge is the other three areas – most notably in implementation or enforcement. This is then the real challenge which countries face and on which depends their success or failure.

Sustainable Economic Growth is a product of both process and content of legislation. It demands accountability, transparency, certainty, competitiveness, continuous improvement, efficiency, innovation, integration, evidence -based decision making, and shared responsibility. Economic legislation should hence facilitate these.

UK has Economic Development and Finance Act 1967 for facilitate the registration, regulating and development of infrastructures and finance etc. This law indicate importance of law and regulation for development of a country.

The rule of law is fundamental to democratic order. Aristotle said more than two thousand years ago, "The rule of law is better than that of any individual." Lord Chief Justice Coke quoting Bracton said in the case of Proclamations (1610): "The King himself ought not to be subject to man, but subject to God and the law, because the law makes him King".

The ‘rule of law’ means that the laws enacted transparently and are enforced justifiably. In fact, the

World Justice Project, an organization specializing in the promotion of Rule of Law, bases its definition as, consisting of 16 factors and 68 sub-factors, organized under the following set of four principles, or bands:

1. The government and its officials and agents are accountable under the law;

2. The laws are clear, publicized, stable and fair, and protect fundamental rights, including the security of persons and property;

3. The process by which the laws are enacted, administered and enforced is accessible, fair and efficient;

4. Access to justice is provided by competent, independent, and ethical adjudicators, attorneys or representatives, and judicial officers who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.

The focus on the linkage between regulatory issues and economic growth is relatively new. Economic or market regulation is that subset which governs economic transactions and interactions between the various stakeholders in a market place.

The importance of competitiveness and competition due to globalization in the global market place create a need for establishing the incentive and regulatory framework which would provide the enabling environment for the market forces to thrive. Liberalization and deregulation provide the necessary environment for the private sector to function efficiently.

A country’s citizenry and resources depends in large part on the quality of that country’s social, political, and economic institutions.

The donor driven economic, social and political reform policy are halfhearted and faces obstacle in each and every stops. All stakeholders must have consensus on reform policy and implementation.

Bangladesh has donor driven and funded research projects for policy reforms but unfortunately almost no indigenous policy research.

The writer is a legal economist and non-government adviser, Bangladesh Competition Commission. He can be contacted at [email protected]