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Creating the Right Policies for National Success

Published on: July 2008​
Genre: Governance/Public Sector Management​ Category: Op eds​

Why is it that some countries flourish while others languish in the doldrums? Why do some countries seem to have it all, while others have nothing? Why is one part of the world rich and the other part so desperately poor?

There are, of course, many answers to these kinds of questions, natural resources, geography, and history all undoubtedly play a part. But leave aside factors based on things like chance or heritage, and you are left with a stark conclusion: some countries are quite simply governed better than others. Their leaders and governance frameworks are more capable and reliable, and the needs and aspirations of their people are more likely to be addressed than elsewhere. In short, public policy and public administration in these countries are more effective.

Take Singapore, for example: a small city-state with negligible natural resources and a small population, yet one of the richest countries in the world per capita. Or the United Arab Emirates, a country that has transformed itself from a small desert country into a global financial centre. Or Ireland: not so long ago a poor country reliant on agriculture, and now one of the wealthiest nations in Europe. The same general principle applies to other countries, such as Japan, Switzerland, Norway, and Denmark.

What are the kinds of public policies and administration that underpin the prosperity of places like these? Business-friendly policies, for a start.

In this era of globalisation, there is intense competition for inward investment. Sometimes a company is forced to locate in a particular country if, for example, a scarce natural resource is available there. But in the absence of that or some other compelling factor, any business that is mobile will gravitate towards countries with the most business-friendly policies.

Companies locate themselves in countries where regulations are effective, but not too heavy-handed; where the process of setting up a company and doing business is simple and quick; where infrastructure is of high quality; and where they will reap rewards if they perform well.

One example of a business-friendly policy is the low corporate tax rates offered by many central and eastern European countries, which have attracted extensive foreign direct investment. Yet it is not only corporate incentives that are needed. A country that wants strong inward investment needs to lure people as much as businesses. The employment location needs to be a pleasant place to live and a financially attractive one too. The fact that the UAE has no income tax, for example, is an obvious draw for the legions of expatriates who arrive every year, and is one of the reasons why its economy is booming.

But foreigners and foreign companies are only part of the story. If a country is to achieve high levels of economic growth, promote entrepreneurship and avoid a brain drain, it must also address the population’s needs, such as having high quality roads, public transport and other types of infrastructure. And effective education policies, in particular, are widely acknowledged to be a key factor in a country’s economic performance. A nation that ensures effective education at all levels – primary, secondary and higher – will reap the economic benefits.

What are some of the ways to ensure effective public policies and efficient public administrations and, by extension, economic success? First, having a stable, safe society is vital. High crime rates deter economic activity, whether indigenous or foreign, and if a legal system is perceived to be unfair or inefficient, that will also drive away business and stunt innovation and competition.

Furthermore, if public policies are to be effective, the civil servants who help formulate and implement policy must be appointed or promoted on merit and be capable, honest and efficient. It is telling that while public officials in some countries act as a catalyst for economic dynamism, in others they are seen as an obstacle to be surmounted if the society is to flourish.

Finally, it is vital for a country’s leaders to be attuned to what people want and need. Some countries have opted for western-style democracy to try to ensure that this happens. Others use different methods, such as the majlis, to listen to grievances and address requests. Public opinion surveys, e-government, and a vibrant press: these are all ways that governments have tried to ensure that they listen and deliver what their populations are seeking.

In the final analysis, the method is not so important. What is crucial is to find an appropriate outlet for people to express their views and contribute to the shaping of public policies, while holding their public servants accountable.

If a country gets its public policies wrong, the result is usually economic stagnation, poisoned politics and emigration of the most talented. But if a country gets them right, it can attract talent, boost its economic growth and gain a competitive advantage over other countries. To complete the virtuous circle, its citizens and residents are likely to be richer and more content than elsewhere.

Ultimately, no country can afford to have poor public policies and inefficient public administration. A credible, efficient and accountable governance structure that truthfully reflects the society’s cultural norms and values provides a solid foundation for lasting and sustainable success.

Hafed Al-Ghwell is the Director of External Affairs and Communication at the Dubai School of Government.

This article was originally printed in The National. It can be accessed here.

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