Policy coherence for Development from Bertelsman Foundation

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Published on March 5, 2014

Author: OECDdev

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5 March 2014, Dr. Daniel Schraad-Tischler, Senior Project Manager at Bertelsmann Stiftung (Bertelsmann Foundation) presented 'Sustainable Governance Indicators 2014 and Policy Coherence for Development'. He answered the questions 'What are the key features of “sustainable governance” that matter for assisting and adapting to global development and transformational change? How well are OECD countries integrating these objectives into their policy systems?'

1 Sustainable Governance Indicators 2014 and Policy Coherence for Development Dr. Daniel Schraad-Tischler Senior Project Manager Bertelsmann Stiftung

Structure of presentation and guiding questions 2 1. How do we define “sustainable governance”? What are the elements needed? 2. What has been the experience with the new “PCD sensitive” questions in SGI 2014? 3. What do the results tell us in terms of governments’ capacities to act coherently?

Sustainable Governance Indicators – What is the SGI project?  Indicator-based cross-national comparison of all OECD & EU countries • •  3 Major international index project conducted on a periodical basis Next edition to be published in spring 2014 Measuring Sustainable Governance • • • • 140 qualitative and quantitative indicators Based on an international network of more than 100 renowned experts Detailed country reports Full and free access to all data, indicators and composite indices via the project‘s website www.sgi-network.org

How do we measure sustainable governance? The SGI’s underlying guiding questions • How successful are the countries of our sample in achieving sustainable policy outcomes? • How well-developed are the governance capacities of these countries in terms of long-term-oriented political steering capacities? • What is the quality of their democratic order? 4

SGI 2014: Three analytical pillars 5 Policy Performance Quality of Democracy Governance • Three classical dimensions of sustainability (economic, social, environmental) • Measuring policies and outcomes • Distinguishing domestic and international activities • Addressing four key dimensions of democracy • Substantive and procedural criteria • Focus on quality of institutions and processes • Executive capacities (steering, implementation, learning) • Executive accountability: government interaction with societal actors • Institutions and processes Strengths and weaknesses (need for reform) Framework conditions for long-term system stability Reform capacities

Sustainable Policy Performance - Overview Economy Labor Market Education 6 Environmental Policy Social Inclusion Health Care Taxes Families Pensions Budgets Integration Research and Innovation Stable international Financial Markets Safe Living Conditions Global Socioeconomic Fairness Global Environmental Protection Regimes

Quality of Democracy - Overview 7

Governance Index - Overview 8

Overall results for the composite indices „Policy Performance“ and „Governance“ Policy Performance 9 Governance Rank 1 - 11 Rank 1 - 11 … … … … Rank 25 - 41 Rank 25 - 41

PCD sensitive indicators in the SGI 2014 Assessments on four key aspects: 1. tackling global social inequalities 2. fostering stable international financial markets 3. promoting global environmental protection regimes 4. international coordination capacities to foster global public goods 10

PCD sensitive indicators 1) Tackling global social inequalities 11

To what extent does the government demonstrate an active and coherent commitment 12 to promoting equal socioeconomic opportunities in developing countries? Rank Rating Paragraph from Estonia Paragraph from Luxembourg report report: …. 26 Since 2000, the country’s 2011, the Estonian Government approved the (…) In January development report: Paragraph from New Zealandagency, Luxembourg Development Cooperation (Lux-Development), Development Cooperation and U.N. target Strategy of Estonian has as part of its efforts exceeded the for industrialized nationsAid 2011 – 2015, which takes the UN MDGs as a Humanitarian of earmarking 0.7% of GDP toward development projects. After New Zealand is highly committed to tacklingspent 0.97% of GDP (€317 Norway (1.02%) and Sweden (1%), Luxembourg global departing point. The strategy contains socioeconomic inequalities. Its aid 2012. objectives and main fields million) in public development assistance in program is of activities, as well as of Foreign countries. Luxembourg playsby the Ministryin micro-financing, hosting firms that offer a full range managed an important rolemajor partnerAffairs andThe priority partners coherent communist countries global of micro-financial products and support more than 50% of in Eastern Europe (i.e., 2015 Trade. It is are formerand efficient in prioritizingfunds. From 2013 to Luxembourg will be a non-permanent member of the U.N. Security Council, elected in part Moldova, Ukraine) and the economic development (…).Caucasus region (i.e., Georgia); and on its strong contributions to cooperation policies. Luxembourg’s development assistance Afghanistan. focuses on training, health care, water treatment, sewage, local development and Free access to global markets for developing infrastructure projects, with a focus on local initiative through offering education and training Estonia is of the cooperation budget is but special countries is high on its agenda. Thegiven for humanitarian help, which programs. Some 15% active in various fields, governmentefforts are includes made in transferring knowledge program to be education emergency assistance development in the fields of openly argues for its and reconstruction aid, based on EU and OECD guidelines. Sincediplomatic and reform and e-government. design and policy, 1992, Lux-Development has been responsiblenotthe used for health system trade outcomes, and for implementation of two-thirds of domestic expertise inbudget. Furthermore, 20% of the Dissemination of the country’s development implementing ICT in solely development outcomes. budget ispublic administration and education are the areas in which reserved for projects in cooperation with 97 approved NGOs, which work in concert with the cooperation and humanitarian action government minister. In 1992 Estonia the New as a Assistance Committee (DAC) of the Geographically,Developmenttrend-setter. Generally, in the OECD, Luxembourg joinedis acting Zealand focuses on countrieshowever, the government’s approach is to follow flows, allowing Luxembourg to work supporting bilateral cooperation andAsian Nations (ASEAN) and in Association of Southeast monitoring aidinternational strategies and policy guidelines on development assistance. often the South Pacific, countries. Luxembourg has also implemented guidelines set by with other European although significant funding is In parallel to the OECD and the through multilateral andenterprises work in the field of The government, NGOs and stop tax international channeled European Union toprivate evasion from developing countries. recent DAC peer review recommended the promotion of policy coherence over international agencies. (…) development. Awareness raising campaigns in the development issues and the improvement of coordination between state fair trade movement is one example of NGO activity (…). departments and Lux-Development for more positive results.

PCD sensitive indicators 2) fostering stable international financial markets 13

To what extent does the government actively contribute to the effective regulation and supervision of the international financial architecture? Rank 14 Rating Paragraph from Germany report: (…) Domestically, the regulatory framework for banks and financial markets is being comprehensively overhauled. The Restructuring Law (Restrukturierungsgesetz) has introduced rules allowing insolvent banks to be closed. This law has become a model for a similar EU regulation, which was under negotiation at the time of writing. Germany was among the first EU countries to introduce a legal obligation for banks to produce “testaments” that define plans in case of the bank’s collapse. 24 Internationally, Germany pushed strongly for coordinated, international steps to reform the global financial system. It helped the G-20 summit develop into a first-class forum for international cooperation. (…) Although skeptical at first, the German government ultimately revised its position regarding the implementation of an European-Union-level financial-transaction tax (EU FTT). The European Commission proposed to introduce an FTT within the European Union by 2014. The proposal won mixed reviews among experts and policymakers. However, for 11 EU member states including Germany, the FTT’s political benefits of reducing risky derivatives transactions, raising revenues and promoting justice outweigh the probable economic costs, such as a slightly negative effect on growth. As a euro-area country, Germany has assumed a leading role in the fight against the sovereign debt crisis in Europe. Its maximum financial guarantee for the European Stability Mechanism amounts to €190 billion (…). Moreover, tax havens have become a prime concern for German policymakers. In February 2013, Germany, along with Britain and France, set itself in the vanguard of countering global tax evasion at the G-20 summit in Moscow.

PCD sensitive indicators 3) global environmental protection regimes 15

To what extent does the government actively contribute to the design and advancement of global environmental protection regimes? Rank 16 Rating Paragraph from Germany report: Germany is a driving force in international climate policy, in the development of renewable energies, and in efforts to improve energy and resource efficiency. Since 1994, nature conservation has been enshrined as a national objective in Article 20a of the Basic Law. The Fukushima meltdown in 2011, the largest nuclear disaster since Chernobyl in 1986, resulted in a highly controversial change in environmental policies. In May 2011, Chancellor Angela Merkel announced that nuclear power would be phased out in Germany by the end of 2022, completely reversing her previous policy. At the global level, the German government actively promotes strategies fostering environmental and climate-friendly development. Since 1990, Germany has reduced its greenhouse-gas emissions by almost 24%. Germany achieves high economicperformance levels with a relatively modest energy consumption by international standards. The World Climate Summit in December 2011 in Durban, South Africa, showed Germany to be one of the prime advocates and architects of a new, post-Kyoto climate order, despite ongoing difficulties in reaching compromise on the specific design of an international climate regime.

PCD sensitive indicators 4) international coordination capacities 17

To what extent is the government able to collaborate effectively in international efforts to foster global public goods? Rank 18 Rating Paragraph from Finland report: Paragraph from Estonia report: Typically, globalin international development is mainly the on a Engagement public goods are best addressed collectively responsibility multilateral basis,of Foreign Affairs. Differently international laws,here is of the Ministry with cooperation in the form of from EU affairs, agreements and protocols. Finland coordination group with leadership of any appropriate interministerial is a partner to several such modes cooperation and thus contributes actively to the implementation of from centers of government. global frameworks. Finland is committed to and has ratified the Kyoto Protocol to the United Framework Convention on Climate Change that came As in other areas, Estonia is good at adhering to international commitments into effect in 2005. The Ministry of the Environment is responsible for but rarely takes the lead. Likewise, Estonia is not very good at coordinating the impact of national policies on the global the framework assessing further climate negotiations. Specifically, within challenge of of the European Union, Finland is committed place in some policy areas human development. Assessment takes to bringing its national average annual environment, energy, IT), but integrated coordination and (e.g., emissions down to their 1990 levels by 2008 – 2012. The Finnish government also adopted a foresight report on long-term climate and energy monitoring across policy fields is non-existent. policy in 2009. In 2012, the government signed a Memorandum of Understanding, through which Finland in its the United States agree to about Given that policy collaboration is still and infancy, one cannot speak continue their cooperation inbetween government and stakeholders. of mass systematic communication preventing the proliferation of weapons Yet, in destruction. Still, areas, such as developmentaaid or or even an important some specific Finland is not to be regarded main combatting player in efforts to foster the provision are active partners ofGiven a HIV/AIDS, various interest groups of global public goals. government. relatively high level of knowledge and research in Finland as well as adequate existing frameworks for policy coordination and monitoring, (…) several relevant institutional capacities for fostering global governance do exist. They are, however, not utilized to their fullest extent.

Conclusion – What do the results tell us? High policy coherence/ global commitment 19 10 Sweden 9 Finland 8 Estonia Switzerland 7 Canada Iceland 6 5 Malta Czech Republic Bulgaria 4 Italy Croatia Slovenia Denmark Germany UK Luxembourg Lithuania France Netherlands New Zealand Australia Ireland Israel Slovakia Belgium Austria Chile Spain Poland Portugal Latvia Hungary Cyprus 3 Greece 2 1 Low policy coherence/ global commitment 1 2 Weak international coordination capacities 3 4 5 6 7 8 9 10 Strong international coordination capacities

20 www.sgi-network.org

SGI: Five stages of data review (qualitative indicators) 21 1. Data Collection 2. Review 3. Regional calibration 4. Inter-regional calibration 5. Results validated The 1st expert establishes a first country report, a combination of a written assessment and personal scores. The 2nd expert reviews and edits the country report and provides his own personal scoring. The regional coordinator evaluates and establishes a final report upon the provided data. All regional coordinators meet to compare and calibrate the results for each region. The SGI Board evaluates and approves the final results.

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