Economic Society

Governance Issues in Economic Society “how transparent rules are, how reliable they are, and what results they encourage make a lot of difference to investment as well as other related indicators of economic Development”

Economic Society “Economic society” refers to state-market relations. This arena is constituted by the rules that apply to these relations.

It is different from civil society in that economic society is made up of actors engaged in the pursuit of monetary gain. Thus, a private corporation or a small, one-person business is part of this arena. Any organization that speaks on behalf of businesspersons, e.g. a Chamber of Commerce, carries out its activities in civil society.

Economic Functions by the State Formulating economic policy Regulating the economy Providing economic infrastructure and services Providing public goods Revenue generation Dealing with other market failures

Economic Regime The rules that apply to economic society are often referred to as the economic regime of a country.

Factors shaping Economic Regime Liberalization (economic and financial markets)

Political democratization Globalization

Specific Issues relevant to Economic Society and Governance (1)information sharing (2)property rights (3)competition, regulation and corruption (4) global influences

Assessment Indicators relevant to Governance and Economic Society

Respect for Property Rights Those in positions of public authority have a vital role in ensuring that property rights, whether private, common or public, are respected and enforced. These rules are very important for material progress, both at micro and macro levels.

Equal Application of Regulations The extent economic regulations are applied equally to firms in the economy. Applying and enforcing regulations equally is important in providing a positive business climate.

Wherever regulations are applied in an ad hoc manner or where special treatment is given to cronies of those in power, the credibility of the rules governing economic society is very much in doubt. “Cost of doing business”

Corrupt Transactions Whether a business license can be obtained in a straightforward and transparent manner or it involves a number of other transactions that go contrary to the stated rules and regulations. This gives us a sense of the extent to which respondents see corruption prevailing in state-market relations.

State-Private Sector Consultation The extent to which there is consultation on policy issues between public and private sector actors. Such consultation is a measure of the trust and cooperation that exists between state and market actors. What do the rules allow in terms of such consultation?

New Global Economic Rules International economic interactions (trade, finance and technology flows) have become an increasingly significant factor in national development. The challenge is how to manage these processes so as to enhance the benefits and reduce the negative effects upon people.

How well do state and market actors respond to this challenge by establishing and enforcing rules that are perceived as helpful to their country?

CORPORATE GOVERNANCE

CORPORATE SOCIAL RESPONSIBILITY "Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.“ (World Business Council for Sustainable Development)

Triple Bottom Line Any idea?

(John Elkington, co-founder of the business consultancy SustainAbility, in his 1998 book 'Cannibals with Forks: the

Triple Bottom Line of 21st Century Business'.)

FACTOR 4 It refers to a hypothetical fourfold increase in 'resource productivity', brought about by simultaneously doubling wealth and halving resource consumption. (1998L. Hunter Lovins and Amory Lovins of the Rocky Mountain Institute, and Ernst von Weizsäcker, founder of the Wuppertal Institute for Climate, Environment & Energy)

FACTOR 10

In the long term, resource use in developed countries needs to be slashed tenfold if we are to approach sustainability.

COMMENTS/REACTIONS: How can we enhance the role of economic society in governance at the same time assuring equity of benefits to all sectors or public?