The Economic Governance Index and Investment Promotion ......EGI Video (8 minutes) 3. EGI...
Transcript of The Economic Governance Index and Investment Promotion ......EGI Video (8 minutes) 3. EGI...
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The Economic Governance Index and Investment
Promotion in Asia
V. Bruce J. Tolentino, Ph.D. Chief Economist and Director, Economic Reform and Development Programs
The Asia Foundation, San Francisco, USA [email protected]
ASEAN-OECD Investment Policy Conference ASEAN Secretariat, Jakarta
November 2010
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Outline 1. The Asia Foundation
2. EGI Video (8 minutes)
3. EGI Definition, History and Goals
4. EGI in Asia Foundation Programs
5. EGI and Trade and Investment
Issues
6. Overview of EGI Methodology (if
there is time)
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Promotes peaceful, prosperous, just and open Asia-Pacific region,
Non-profit, non-governmental organization organized in 1954,
18 offices across Asia, San Francisco HQ,
Key program areas:
- Economic reform and development,
- Governance, law and civil society,
- Women’s empowerment,
- Environment, and
- International relations.
The Asia Foundation
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Economic Governance Index (EGI)
Research and surveys
Public-Private Dialogue for Reform
Regulatory Impact Assessment
One-Stop Shops
Strengthened Local Fiscal Management
Key TAF ERD Tools
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TAF EGI Video
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The Economic Governance Index (EGI) is a country-specific
index for measuring the quality of economic governance across sub-national units (provinces, districts, municipalities, cities).
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Philippines: Cities Governance Index 2002-2004 Indonesia: Cities and Regencies Index, since 2001. Vietnam: Provincial Competitiveness Index, since 2005. Cambodia: Provincial Business Environment Scorecard, since 2006.
Sri Lanka: Economic Governance Index, since 2007.
India: Tamil Nadu District Economic Environment Index, since 2009 (implemented by IFMR). Bangladesh: Economic Governance Index, since 2009. Malaysia: Business Environment Index, by 2011.
EGI History 1
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EGI Goals 1. To enable aggregate voice of MSMEs.
• Representative sample, avoids selection bias.
2. Measures economic GOVERNANCE, not development.
Allows comparison of sub-national units on equal basis.
3. Measures performance of districts against best-governance practices in the country
Not an idealized, and perhaps unattainable notion of good governance.
4. Identifies actionable policies to local and national leaders.
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EGI in Asia Foundation Programs
Local Governments
Business
Community National
Government
Accountability
Dialogue for
Reform
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Recent literature suggests links between trade facilitation measures and prevailing business environment (Duval & Utokthan, 2009; Hoekman, 2008).
Behind-the-border (BtB) business environment and trade issues
Source: Duval & Utokthan, 2009
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EGI and Trade Issues EGI provides clear metrics on the sub-
national business environment.
• Infrastructure
• Start-up and transaction costs
• Enables tracking of progress over time
Mix-and-Match Components:
• firms’ investment location decisions.
• Access to finance,
• trade facilitation.
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Governments of Cambodia, Indonesia, Vietnam have adopted EGI as instrument to monitor progress in provincial economic governance.
Provincial governments in Vietnam and Cambodia have progressed into customized diagnostic analyses, resulting in important specific reform initiatives by provincial governments.
In Bangladesh the Commerce Minister outlined a series of EGI-based reforms, including licensing, access to information, and reaching out to women entrepreneurs.
Provincial diagnostic in An Giang, Vietnam
How EGI has influenced policy
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EGI as part of broader governance The government of Indonesia is interested in
measuring local government performance
more comprehensively;
TAF is working with World Bank to construct
a “Local Governance Performance Measure”
which will include components on fiscal
performance, financial management, and
service delivery, in addition to the EGI;
This broader indicator will be linked to the
intergovernmental fiscal transfer mechanism.
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EGI and incentives for good governance at local level
EGI helps provide an incentive for good local governance by:
Giving the electorate a benchmark by which to judge the performance of their district leadership, and
Giving the central government a tool with which to assess and incentivize performance.
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KPPOD Awards Ceremony
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Overview of EGI Methodology
Sub-Index 1
Sub-Index 2
Indicator
Indicator
Indicatorsinclude both firm
survey perceptions and
“hard” data from published
sources
Indicator
Weights
Indicator
Indicator
Indicator
Indicator
Indicator
Indicator
Sub-Index 10
W
W
W
ConstructionCollection Calibration
EGI
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EGI construction: Selection of Sub-Indices
1. Entry costs,
2. Access to land and security of tenure,
3. Transparency,
4. Time costs of regulatory compliance,
5. Informal charges,
6. Participation,
7. Law and order,
8. Tax administration,
9. Dispute resolution, and
10.Local infrastructure.
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EGI Construction: Bangladesh Sub-Index Dimensions
Sub-Index 2:
Land Access and
Security of Tenure
Dimension 1:
Access to Land
Dimension 2:
Security of Tenure
Indicator 1:
% of firms with a
registered Dalil
(land title)
Indicator 2: % of firms saying it
was difficult/very
difficult to register
Dalil
Indicator 3:
% of firms rating
expropriation risk
high or very high
Indicator 4:
% of firms that
deem rental contract
changes a risk
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EGI Construction: Final Sub-Indices
Cambodia 2006 Land Access and Property Rights Sub-Index
0 2 4 6 8Land Access and Property Rights Sub-Index(2 Dimensions)
Banteay Meanchey
Siem Reap
Sihanoukville
Kampot
Phnom Penh
Svay Rieng
Kandal
Battambang
Kampong Chhnang
Kampong Cham
Soft Data Hard Data
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Rankings and Tiers: Vietnam 2008
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2010 Bangladesh Final Composite Index
0 10 20 30 40 50 60 70 80 90 100
RAJSHAHI
BARISAL
CHITTAGONG
TANGAIL
NOAKHALI
PABNA
BOGRA
KHULNA
JESSORE
DHAKA
PATUAKHALI
RANGPUR
COMILLA
MYMENSINGH
COX'S BAZAR
SYLHET
KUSHTIA
DINAJPUR
FARIDPUR
Entry Costs
Land Access & Security of Tenure
Transparency
Time Costs of Regulatory Compliance
Informal Charges
Participation
Law & Order
Tax Administration
Dispute Resolution
Infrastructure
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For further detailed information
on Economic Governance Index ,
including country reports,
methodology and country data,
see EGI page at
www.asiafoundation.org
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Thank You!