Assessment of the Quality of Public-Private Dialogue in Drafting Normative Acts - 2020-2021

News | Research | Economics and Social Policy | Report 25 May 2022

Cooperation between the public and private sectors is of crucial importance for the timely and effective resolution of economic challenges facing the country. The public-private dialogue will facilitate the development of inclusive, evidence-based policies and legislation. It also ensures the effective enforcement of normative acts.


The purpose of this report is to assess the quality of involvement of the private sector in the drafting of laws and regulations having a significant economic impact. The report includes an assessment of the quality of dialogue between the public and private sectors in the process of drafting 18 laws and regulations adopted between January 2020 and September 2021. 8 laws and 8 subordinate normative acts were selected for evaluation at the central level, along with 2 normative acts adopted by local self-government bodies. The selected municipalities were Ozurgeti and Zugdidi.

 

Main Findings

 

The survey of the 18 selected normative acts revealed the following findings:

 

- The policy development phase is the weakest link in public-private dialogue. Only a third of public agencies ensured comprehensive dialogue with the private sector at the initial stage.


- Prior to the drafting of almost all normative acts, the representatives of state agencies claimed that they had studied the challenges and/or international best practices in the area. These studies, however, were not formulated as a document and were oftentimes not available to the private sector.

 

- The dialogue between the public and private sectors prior to working on the text of a normative act carried a predominantly general character. The public sector would submit conceptual issues to the private sector, while the private sector would limit itself to generalized comments.

 

- Public institutions formed working groups with the participation of the private sector only in the process of drafting bills. For example, working groups have been set up in the Investors' Council and the Private Law Reform Advisory Board of the Ministry of Justice.

 

- In the case of subordinate normative acts, the initial versions were prepared primarily by public agencies with the assistance of international and local experts, while the representatives of the private sector became involved in the process of discussing the draft version.

 

- Public institutions identify representatives of the private sector (mainly companies and NGOs) in advance for the purposes of sharing the text of the normative act and inviting them to discussions.

 

- At the stage of working on the text of almost all normative acts, the private sector was involved through sharing commentary and remarks. In many cases, public agencies were open to communication and made decisions accepting/rejecting comments based on communication with the private sector. However, the public entities were less inclined to take into consideration such comments in the cases of several normative acts.


- In order to ensure publicity, all public institutions have introduced or are in the process of introducing the practice of publishing a draft version of a normative act on their website. Additionally, final versions are sent to the private sector via email.


- Almost every public agency organized at least one public-private dialogue to discuss the final version of a normative act. Several agencies, however, were notable due to additional, proactive measures.

 

- Public institutions used both oral and written methods for receiving feedback. Justifications by the public sector were not always satisfactory for the private sector. In many cases, instead of detailed feedback, the private sector received already updated versions of documents.


- The private sector positively assessed the openness of the public sector during the review process of normative acts. In some cases, however, it negatively assessed the willingness to take feedback into consideration.


- Private sector involvement and interest varied by topic. In some cases, despite the proactivity of the public sector, the private sector became more actively involved only after the entry into force of the normative act.


- Regulatory impact assessments were prepared on three laws and three subordinate normative acts. The main reason for the lack of RIAs was the obligation to approximate Georgian legislation with European legislation. The obligation removed the issue of adoption/non-adoption of a normative act from the agenda.


- A small number of public institutions held a dialogue between the private and public sectors across the whole country, while the rest was concentrated in Tbilisi. The specifics of a normative act sometimes restrict the ability of the public from the regions to become involved, although normative acts that concern all citizens of the country necessitate that they are kept informed.


- Decision-makers were involved in the public hearings of all evaluated acts; this could have been senior management or middle management with a decision-making mandate. From the private sector, the stakeholders mainly involved in the dialogue were companies, industry associations, and experts. Academic circles, students were less involved in the dialogue.


- Existing challenges were analyzed in the selected municipalities based on the results of communication with the local private sector. The private sector was less involved, however, in the process of working on the text of the normative acts of the local self-government body.


- In municipalities, the documents most often discussed publicly are the draft local budget and its accompanying resolutions, while in the case of other local normative acts, little dialogue is held.

 

- The development period of the assessed normative acts varies between 0-8 years.

 

Recommendations

 

- The public sector should initiate a dialogue with the private sector at the policy planning stage. Legislative reforms/amendments are often based on the strategic goals of the country, which is why it is important for the private sector to be involved in planning policy and developing strategies and guidelines.


- It is necessary to assess the regulatory impact of acts that will have a significant socio-economic impact. This also applies to legislation to be harmonized within the framework of the Association Agreement, as the agreement provides for the harmonization of Georgian legislation with European laws, which allows the legislation to be adapted to the Georgian reality.

 

- Additionally, the regulatory impact assessment should be prepared prior to working on the text of the normative act so as to establish the basic principles of the normative act based on the RIA.


- Analytical documents prepared by public institutions (RIA, Problem Analysis Document, surveys of international practice, etc.) should be public and accessible to all representatives of the private sector.


- In order to ensure inclusivity, at the policy planning stage, public agencies should identify and inform the stakeholders in the private sector that are directly or indirectly affected by the legislative reform/amedments.


- In order to conduct high-quality dialogue, the public sector should establish working groups with the participation of the public and private sectors, within the framework of which normative acts will be prepared. This will increase the responsibility and accountability of both sides.


- Public institutions should ensure the existence of a systematized process for receiving comments and feedback.


- Public agencies should proactively disseminate the final versions of normative acts and ensure awareness among a wide range of the public.


- Public discussions of normative acts should be held in Tbilisi as well as the regions.

 

- The public in regions should be informed about the benefits of public-private dialogue and importance of their participation in it.

 

- Awareness of the importance of involvement in dialogue should also be raised among academia, students, experts, and other communities.

 

-Normative acts should be prepared within reasonable timeframe so as to avoid waste of time and financial resources.

 

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