Although much of our attention is at present focused on the political dimension of the events unfolding in Libya, the future of the country will most certainly be shaped not so much by what is happening now as by what happens next.
While the government will change, and Gaddafi will fall, the underlining fundamental economic and social issues and internal challenges that have led Libya to this moment have not yet changed. It is only through new governance structures and a new social contract that Libya can seize the moment and the opportunity that this historical juncture offers.
It is governance, in the broad and sometimes vague sense of the term, which is really at the heart of the recent events sweeping much of the Arab World, Libya included. These momentous events can be traced to three fundamental pillars of what is called “Governance:” 1.) rules and restraints, 2.) voice and social accountability, and 3.) transparency and openness in governing.
In essence, governance provides the rules and process that organize the political, economic, and social aspects of life in any given society. It represents the general rules that members of society have collectively agreed to rely upon to manage public relationships and institutions in a transparent, equitable, and inclusive way. From getting a driver’s license in Tripoli toreceiving health care in Ben-Ghazi, the relationship of citizens to their public institutions manifests itself in almost every situation. That implicit “social contract” underlies how individuals and groups interact with and through their governments to each other, society and the world at large.
The challenge for a new government and people throughout Libya now, as they embark on a promising future, is how to organize and develop interactions that are fair and productive and to minimize the ones that are frustrating and wasteful — as they move toward “good” governance where authority is exercised in ways that respect the integrity, rights, and needs of everyone within the society.
What is good governance?
First, a good governance framework is inclusive, maintaining the right set of mechanisms to define and to protect the basic rights of everyone, while at the same time providing remedies and recourse guaranteed by a rule of law. Second, good governance incorporates representation, a notion as old as the first caliphs. Representation, when translated into governance, means that those selected to act on behalf of people are answerable to the people for their failures and credited for their successes. In short, they are accountable to the people. Third, good governance requires knowledge and information upon which accountability to the people can be based—and so “transparency” within governance mechanisms is absolutely essential.
Improving the inclusiveness and accountability of governance mechanisms in the new Libya can help in three ways. It will: 1.) reduce the scope for persistently arbitrary or distorted policies; 2.) improve the delivery of public services to businesses and citizens that will consequently improve productivity and social responsibility; and, 3.) improve bureaucratic performance and thus reduce the uncertainties and costs of doing business.
Economic research shows conclusively that good governance has a major impact on the economic life of a society. Ensuring public accountability of politicians and bureaucrats has been shown to contribute toward effective implementation of economic policies conducive to growth. Transparency and contestability, key principles in terms of accountability, in addition to inclusiveness in the governance process, are essential checks against an emerging leadership and policies that may favor less-efficient economic activities. Indeed, in the medium term, the transition to a better governance framework has the potential to significantly boost economic growth and raise living standards in Libya.
With greater inclusiveness, accountability and transparency in governance, nations remove key constraints to their economic growth and steer capital and human resources more effectively toward productive uses while reducing unproductive rent-seeking behavior. It follows too that good governance mechanisms must include the participation of civil society, including a free media and independent academic institutions , and ensure vibrant public debate on the effects of government policies -- a process that helps countries to minimize persistent policy distortions.
Better governance also makes it easier to start new businesses and to run and expand existing ones. For example, accountable and capable bureaucracies help lower transaction costs (for entry, operation, and exit). Furthermore, transparency and inclusiveness reduce the information asymmetries between business and governments, and this in turn reduces uncertainties and unpredictability in the application of government rules and regulations.
Businesses rely upon and operate in a commercial environment that depends on the satisfactory, timely, and equitable delivery of key public goods and on efficient and equitable enforcement of necessary public regulations. Including the participation of business, labor, and consumer interests in defining new priorities for public services and monitoring how well governments perform those services is key to providing the proper environment. Equally as important are accountability mechanisms that help keep officials, administrators, or other providers of public services honest and able.
Whether men or women, young or old, street vendors, public sector workers, college graduates or promising entrepreneurs, those marching and fighting in the streets of Libyan cities are voicing the simple and universal demand for equal treatment, freedom to choose their government, greater voice in their country’s affairs, credible ways to hold their government accountable, and the opportunity to participate in the process by which they are governed. They want to impact their own economic and social lives. How far they go in achieving these noble goals will certainly reveal what kind of future Libya will have.
While the government will change, and Gaddafi will fall, the underlining fundamental economic and social issues and internal challenges that have led Libya to this moment have not yet changed. It is only through new governance structures and a new social contract that Libya can seize the moment and the opportunity that this historical juncture offers.
It is governance, in the broad and sometimes vague sense of the term, which is really at the heart of the recent events sweeping much of the Arab World, Libya included. These momentous events can be traced to three fundamental pillars of what is called “Governance:” 1.) rules and restraints, 2.) voice and social accountability, and 3.) transparency and openness in governing.
In essence, governance provides the rules and process that organize the political, economic, and social aspects of life in any given society. It represents the general rules that members of society have collectively agreed to rely upon to manage public relationships and institutions in a transparent, equitable, and inclusive way. From getting a driver’s license in Tripoli toreceiving health care in Ben-Ghazi, the relationship of citizens to their public institutions manifests itself in almost every situation. That implicit “social contract” underlies how individuals and groups interact with and through their governments to each other, society and the world at large.
The challenge for a new government and people throughout Libya now, as they embark on a promising future, is how to organize and develop interactions that are fair and productive and to minimize the ones that are frustrating and wasteful — as they move toward “good” governance where authority is exercised in ways that respect the integrity, rights, and needs of everyone within the society.
What is good governance?
First, a good governance framework is inclusive, maintaining the right set of mechanisms to define and to protect the basic rights of everyone, while at the same time providing remedies and recourse guaranteed by a rule of law. Second, good governance incorporates representation, a notion as old as the first caliphs. Representation, when translated into governance, means that those selected to act on behalf of people are answerable to the people for their failures and credited for their successes. In short, they are accountable to the people. Third, good governance requires knowledge and information upon which accountability to the people can be based—and so “transparency” within governance mechanisms is absolutely essential.
Improving the inclusiveness and accountability of governance mechanisms in the new Libya can help in three ways. It will: 1.) reduce the scope for persistently arbitrary or distorted policies; 2.) improve the delivery of public services to businesses and citizens that will consequently improve productivity and social responsibility; and, 3.) improve bureaucratic performance and thus reduce the uncertainties and costs of doing business.
Economic research shows conclusively that good governance has a major impact on the economic life of a society. Ensuring public accountability of politicians and bureaucrats has been shown to contribute toward effective implementation of economic policies conducive to growth. Transparency and contestability, key principles in terms of accountability, in addition to inclusiveness in the governance process, are essential checks against an emerging leadership and policies that may favor less-efficient economic activities. Indeed, in the medium term, the transition to a better governance framework has the potential to significantly boost economic growth and raise living standards in Libya.
With greater inclusiveness, accountability and transparency in governance, nations remove key constraints to their economic growth and steer capital and human resources more effectively toward productive uses while reducing unproductive rent-seeking behavior. It follows too that good governance mechanisms must include the participation of civil society, including a free media and independent academic institutions , and ensure vibrant public debate on the effects of government policies -- a process that helps countries to minimize persistent policy distortions.
Better governance also makes it easier to start new businesses and to run and expand existing ones. For example, accountable and capable bureaucracies help lower transaction costs (for entry, operation, and exit). Furthermore, transparency and inclusiveness reduce the information asymmetries between business and governments, and this in turn reduces uncertainties and unpredictability in the application of government rules and regulations.
Businesses rely upon and operate in a commercial environment that depends on the satisfactory, timely, and equitable delivery of key public goods and on efficient and equitable enforcement of necessary public regulations. Including the participation of business, labor, and consumer interests in defining new priorities for public services and monitoring how well governments perform those services is key to providing the proper environment. Equally as important are accountability mechanisms that help keep officials, administrators, or other providers of public services honest and able.
Whether men or women, young or old, street vendors, public sector workers, college graduates or promising entrepreneurs, those marching and fighting in the streets of Libyan cities are voicing the simple and universal demand for equal treatment, freedom to choose their government, greater voice in their country’s affairs, credible ways to hold their government accountable, and the opportunity to participate in the process by which they are governed. They want to impact their own economic and social lives. How far they go in achieving these noble goals will certainly reveal what kind of future Libya will have.
nice perspective.
ReplyDeleteCalling for good governance on a national level, maybe for the first time in generations if ever, in Libya is pretty obvious. How do you propose accomplishing it in the Libyan context? What are you suggesting the West, the Libyan diaspora and those in the east who are now able to speak, do or not do, since its ultimately up to the Libyan people to assume this responsibility for their future. What is your roadmap Hafed?
ReplyDeleteYou have a unique perspective and window of opportunity to begin publicly laying out recommendations as both the Libyan people and the rest of the world is grappling with this very question. Don't wait until the tyrant has fallen to begin complaining about missed opportunities. Start laying the groundwork now, start a dialog for all Libyans to begin actually planning how they can build these institutions of governance.