need for ria and public consultation in turkey

tepav türkiye ekonomi politikaları araştırma vakfı

Need for RIA and Public Consultation in Turkey

Sibel Güven, Ph. D.Istanbul - November 20, 2007

Need for RIA and Public Consultation in Turkey Slide 2

Agenda The Need for RIA in Turkey

The ‘Transformation Process’ in Turkey

‘Second Generation Reform’ agenda

‘RIA’ as a ‘Better Regulation’ tool

The importance of ‘Consultation’

RIA & Consultation experiences in EU

RIA experience of TEPAV

Lessons learned and Recommendations


A new era for Turkey

Two very general questions… Why is today different from yesterday? And how can tomorrow be different from today?

Reform agenda Macroeconomic reforms are under way However, there are ‘winners’ and ‘loosers’ of the

reform process The new role of state: regulatory state The need for second generation reforms EU accession process


Drastic change in Turkey’s economic environment since 2001

Industrial production, interest rates and inflation in Turkey, 1999-2006

Source: Central Bank of Turkey

Inflation

Benchmark bond's interest rate

Industrial production

0

50

100

150

200

250

Apr-98 Aug-99 Jan-01 May-02 Oct-03 Feb-05 Jul-06 Nov-07


Turkey’s total trade volume (in billion USD) and trade/GDP ratio: 2000-2006

Source: Undersecretariat of Foreign Trade

Rapid integration into the global economy

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005 2006

40%

42%

44%

46%

48%

50%

52%

54%

56%

58%Trade Volume (in billion USD)

Trade / GDP (right axis)

Need for RIA and Public Consultation in Turkey Slide 6Slide 6

1 1 1

2 2 2 2

3

4

5 5 5

7 7

15

0

2

4

6

8

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14

16

Azerb

aija

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Jord

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Yemen

Croat

ia

Moro

cco

Oman

Tunisi

a

Bulgar

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Greec

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Slove

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Ukrai

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Isra

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Roman

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Turkey

2000 2005

Number of export destinations with a volume over 1 billion USD

Turkish economy becomes increasingly diversified in the regionin terms of markets..

Source:COMTRADE, TEPAV’s calculations


Turkish economy becomes increasingly diversified in the region

in terms of products..

1 1 1

2

3 3 3 3

4 4

5 5 5

7

10

16

0

5

10

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20

Azerb

aija

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Jord

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Yemen

Bahra

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Bulgar

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Moro

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Oman

Tunisi

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Saudi A

rabi

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Greec

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Slove

nia

Ukrai

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Roman

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Isra

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Turkey

2000 2005

Number of export items with a volume over 1 billion USD

(SITCrev2 classification in 2 digits)

Source:COMTRADE, TEPAV’s calculations


Turkey’s global storyline: - An investment hub, with access to markets of 1 billion people.- Two centers of growth: the strongest private sector and institutional infrastructure between EU and China


Second Generation Reform Agenda

First generation reforms Second generation reforms

Reform areas Drastic budget cuts and tax reform Price liberalization (inl. Exchange rate Trade and foreign investment liberalization Private sector deregulation Privatization

Labor market reform Public administration reform Decentralization Judicial reform Upgrade regulatory capacities Sectoral restructuring Education reform Health reform Social security reform

Current reform agenda is more complex. Contentious issues untouched before 2007

(judiciary, education, health, social security) Need for consensus building New constitution

Need for RIA and Public Consultation in TurkeySlide 10

The need for RIA

We need RIA as an important ‘better regulation’ tool Second generation reforms Harmonization of EU acquis

Turkey can not afford another lost decade as in 90’s


Stage 1: Identify the problem Is regulation the appropriate response?

Regulation avoidedYES NO

Regulation abandoned or consultation

exercise repeatedYES NO

Are all those likely to be affected included in the consultation?

Stage 2: Consultation

Stage 3: Preparation of the legislation

Regulation abandoned or legislation redraftedYES NO

Regulation abandoned or

legislation redraftedYES NO

Does the legislation reflect the evaluation undertaken and does it adequately address the problem?

Stage 4: Re-evaluation of the regulation legislation during Parliamentary passage

Does the legislation still meet the objectives as originally intended?

Is the regulation still achieving its intended benefits and without

unanticipated costs?

Stage 5: Monitoring existing regulation

Abolish the regulation or

amend itYES NO

Regulation remains appropriate – but still re-assess periodically

The RIA Process

Source: Kirkpatrick, 2007


Regulation has many stakeholders:

Households, investors, government, CSOs

Each has its own set of objectives/demands, and each one may be affected differently

How do we decide between them?

A closer look at consultation (1)



The need for consultation State as the balancing actor

• Transparency

• Accountability

• Consistency

Maximizing social welfare

Consultation as a compliance toolSource: Kirkpatrick, 2007


Dangers of regulation: Regulatory capture

Political capture

How do regulators retain ‘independence’?

To what extent should regulators be ‘independent’?

What about regulatory accountability? Accountable to whom?

• Parliament, Minister, Competition Authority, Other?




Consultation Mechanisms (1) Basic questions

Why consult?• Learning• Collective Learning• Advocacy - Compliance

What do we want to talk about?• Values and principles• Problem justification

Who do we want to talk with?• Engage with people who have information

– Evidence– Enriched understanding

When should we talk?• An ongoing process for different purposes (learning vs.

advocacy) How should we communicate?

• Multiple ways might be employed simultaneouslySource: Milligan, 2003


Consultation Mechanisms (2)1. Adopt RIA at the highest political levels – build commitment

2. Establish explicit standards for assessing regulatory quality and regulatory decision making.

3. Develop ownership of the RIA method at the departmental level.

4. Establish procedures to ensure RIA is built into the process of regulatory appraisal. RIA must not be seen as either a “burden” or irrelevant “add on”.

5. Establish procedures for systematic public consultation.

6. Establish methods for prioritizing where detailed RIAs should be applied.



Consultation criteria in UK1. Timing of consultation should be built into the planning process

2. It should be clear who is being consulted, about what questions, in what timescale and for what purpose.

3. A consultation document should be as simple and concise as possible. It should include a summary, in two pages at most, of the main questions it seeks views

on. It should make it as easy as possible for readers to respond, make contact or complain.

4. Documents should be made widely available, with the fullest use of electronic means, and effectively drawn to the attention of all interested groups and individuals.

5. Sufficient time should be allowed for considered responses from all groups with an interest. Twelve weeks should be the standard minimum period for a consultation.

6. Responses should be carefully and open-mindedly analyzed The results made widely available, with an account of the views expressed, and reasons

for decisions finally taken.

7. Departments should monitor and evaluate consultations designating a consultation co-ordinator who will ensure the lessons are disseminated.

Source: OECD, 2002


Consultation procedures in EU (1) Aim

ensuring transparency enhancing workability and legitimacy

for all

Consultation plan ongoing consultation throughout all

analytical steps of RIA the objective of the consultation relevant target groups appropriate consultation tool consultation time consultation document

Analytical Steps of RIA

1. Identify the problem

2. Define the objectives

3. Develop main policy options

4. Analyze their impacts

5. Compare the options

6. Outline policy monitoring and evaluation

Source: EC, 2005


Consultation procedures in EU (2) Consultation tools

consultative committees expert groups open hearings ad hoc meetings consultation via Internet questionnaires focus groups seminars/workshops Interactive Policy Making (IPM)

Source: EC, 2005


Appropriate public consultation tool

Structured, close ended consultation might be over simplistic

On the other hand, consultation fatigue should be avoided

Intensive consultation for prioritized RIAs, whereas simpler techniques for others

Thus, an independent auditory body is needed for prioritization


TEPAV’s interest on RIA (1) The Economic Policy Research Foundation of

Turkey (TEPAV) is an independent, non-governmental and non-partisan think-tank, established in October

2004

TEPAV intends to increase the knowledge content of policy

discussions in Turkeyremove the gap between academic research and

policy implementation.


TEPAV’s RIA experience (1) Thus, TEPAV also have common objectives

with RIACapacity building for RIA and Better Regulation Enhancing coordination and consultation

between the stakeholder organizations

Studies conducted by TEPAV on RIA TEPAV | MOD Computable General Equilibrium

(CGE) Model Studies EU funded project on impact assessment

• Strengthening the capacity of impact analysis, • awareness raising and a micro implementation on

environment in the EU accession process


TEPAV’s RIA experience (2) Objectives

Raising awareness on impact assessment among the decision-makers in public and civil society organizations

Educating officials from the corresponding organizations

Strengthening impact assessment capacity through a micro model application

Micro model Impact assessment on the harmonization of LCP Directive

(2001/80/EC) in lignite-fired power plants in Turkey

Pioneering the consultation process among the stakeholder organizations


Problem definition (1)Fiscal discipline

Privatization

Security of supply

Import Dependence

EU acquis

Better Quality of Life

Treasury, MoFinance, SPO

Limit investment

MoEnergy

Produce energy

MoEnvironment

Limit emissions

EÜAŞ


Problem definition (2)


Not a simple problem

Needs a comprehensive consultation process

Stakeholders Chamber of Environment

Engineers Chamber of Electrical

Engineers Electricity Generation Co.

Inc. Energy Market Regulatory

Authority Ministry of Agriculture Ministry of Health Ministry of Industry and

Trade

Problem definition (3)

Ministry of Industry and Trade Ministry of Energy and Natural

Resources Ministry of Environment and Forestry State Planning Organization Turkish Coal Enterprise Turkish Treasury Union of Chambers and Commodity

Exchanges of Turkey Union of Turkish Doctors United Nations Development

Programme


Consultation: Design Conflict of interest

Allocation of scarce resources

Insufficient communication & consultation among the stakeholders

Two important bodies Steering Commitee

Working Group


Consultation: Steering Committee Shared reasoning instead of conflict of

interests… Steering committe,

Enhancing the institutional commitment for cooperation and share of data

Monitoring the studies of the working group

Controlling and approving the outputs of the project


Consultation: Working Group They are intended to be the pioneers of

impact assessment in their organizations

Working group;

Trained on RIA at the beginning of the project

Will be the agents of the cooperation

Sharing institutional data, expertise and knowledge


better regulation is essential for competitiveness more informed policy-making is necessary to avoid potentially

adverse social and environmental impacts of rapid change smoother passage of laws through cabinet and parliament a catalyst for reform and strengthening of the entire administrative

structure develops individuals as effective policy-makers

RIA as an opportunity

RIA: A threat or an opportunity?


RIA as a threat increased workload changes of responsibility need for new skills transparency of decision-making


Lessons learned 1. The problems start from the ‘problem definition’ stage

2. Government organizations are reluctant for data and information sharing, even within their governmental institutions

3. Technical skills for RIA implementation is very poor

4. RIA seen as either a ‘burden’ or irrelevant ‘add on’

5. The scope of compulsory RIA must be broadened including all costly legislations and secondary regulation

LCPD Directive


Recommendations for Turkey1. The idea of ‘shared reasoning’ instead of ‘conflict of interests’ has to become

widespread

Political commitment

Bureaucratic support

Technocrat capacity

Data availability and transparency

2. Coordinator RIA Body

Prioritization and process determination

Quality assurance, transparency check

Technocrat capacity

3. RIA awareness within CSOs

Regulation monitoring

RIA skills

Cultural change within government

Public administration reform

Active role in decision making


Türkiye Ekonomi Politikaları Araştırma Vakfı

Söğütözü Cad. No:43 TOBB-ETÜ Yerleşkesi TEPAV Binası06560 Söğütözü – AnkaraTel: 312 – 292 5500Fax: 312 – 292 5555www.tepav.org.tr

Dr. Sibel Güven - [email protected]