Need for RIA and Public Consultation in Turkey

1. tepav Need for RIA and Public Consultation in Turkey türkiye ekonomi politikaları araştırma vakfı Sibel Güven, Ph. D.Istanbul - November 20, 2007

2. Need for RIA and Public Consultation in Turkey Agenda • The Need for RIA in Turkey • The ‘Transformation Process’ in Turkey • ‘Second Generation Reform’ agenda • ‘RIA’ as a ‘Better Regulation’ tool • The importance of ‘Consultation’ • RIA & Consultation experiences in EU • RIA experience of TEPAV • Lessons learned and Recommendations

3. Need for RIA and Public Consultation in Turkey A new era for Turkey • Two very general questions… • Why is today different from yesterday? • And how can tomorrow be different from today? • Reform agenda • Macroeconomic reforms are under way • However, there are ‘winners’ and ‘loosers’ of the reform process • The new role of state: regulatory state • The need for second generation reforms • EU accession process

4. Need for RIA and Public Consultation in Turkey Drastic change in Turkey’s economic environment since 2001 Industrial production, interest rates and inflation in Turkey, 1999-2006 Source: Central Bank of Turkey

5. Need for RIA and Public Consultation in Turkey Rapid integration into the global economy Turkey’s total trade volume (in billion USD) and trade/GDP ratio: 2000-2006 Source: Undersecretariat of Foreign Trade

6. Turkish economy becomes increasingly diversified in the regionin terms of markets.. Need for RIA and Public Consultation in Turkey Slide 6 Number of export destinations with a volume over 1 billion USD Source:COMTRADE, TEPAV’s calculations

7. Turkish economy becomes increasingly diversified in the regionin terms of products.. Need for RIA and Public Consultation in Turkey Slide 7 Number of export items with a volume over 1 billion USD (SITCrev2 classification in 2 digits) Source:COMTRADE, TEPAV’s calculations

8. Turkey’s global storyline: - An investment hub, with access to markets of 1 billion people.- Two centers of growth: the strongest private sector and institutional infrastructure between EU and China Need for RIA and Public Consultation in Turkey Slide 8

9. Second Generation Reform Agenda Need for RIA and Public Consultation in Turkey Slide 9 • Current reform agenda is more complex. • Contentious issues untouched before 2007 (judiciary, education, health, social security) • Need for consensus building • New constitution

10. Need for RIA and Public Consultation in Turkey The need for RIA • We need RIA as an important ‘better regulation’ tool • Second generation reforms • Harmonization of EU acquis • Turkey can not afford another lost decade as in 90’s

11. Need for RIA and Public Consultation in Turkey Stage 1: Identify the problem Is regulation the appropriate response? Regulation avoided YES NO Are all those likely to be affected included in the consultation? Stage 2: Consultation Regulation abandoned or consultationexercise repeated YES NO Does the legislation reflect the evaluation undertaken and does it adequately address the problem? Stage 3: Preparation of the legislation Regulation abandoned or legislation redrafted YES NO Stage 4: Re-evaluation of the regulation legislation during Parliamentary passage Does the legislation still meet the objectives as originally intended? Regulation abandoned or legislation redrafted YES NO Is the regulation still achieving its intended benefits and without unanticipated costs? Stage 5: Monitoring existing regulation Regulation remains appropriate – but still re-assess periodically Abolish the regulation or amend it YES NO The RIA Process Source: Kirkpatrick, 2007

12. Need for RIA and Public Consultation in Turkey A closer look at consultation (1) • Regulation has many stakeholders: • Households, investors, government, CSOs • Each has its own set of objectives/demands, and each one may be affected differently • How do we decide between them?

13. Need for RIA and Public Consultation in Turkey A closer look at consultation (2) • The need for consultation • State as the balancing actor • Transparency • Accountability • Consistency • Maximizing social welfare • Consultation as a compliance tool Source: Kirkpatrick, 2007

14. Need for RIA and Public Consultation in Turkey A closer look at consultation (3) • Dangers of regulation: • Regulatory capture • Political capture • How do regulators retain ‘independence’? • To what extent should regulators be‘independent’? • What about regulatory accountability? • Accountable to whom? • Parliament, Minister, Competition Authority, Other? Source: Kirkpatrick, 2007

15. Need for RIA and Public Consultation in Turkey Consultation Mechanisms (1) • Basic questions • Why consult? • Learning • Collective Learning • Advocacy - Compliance • What do we want to talk about? • Values and principles • Problem justification • Who do we want to talk with? • Engage with people who have information • Evidence • Enriched understanding • When should we talk? • An ongoing process for different purposes (learning vs. advocacy) • How should we communicate? • Multiple ways might be employed simultaneously Source: Milligan, 2003

16. Need for RIA and Public Consultation in Turkey Consultation Mechanisms (2) • Adopt RIA at the highest political levels – build commitment • Establish explicit standards for assessing regulatory quality and regulatory decision making. • Develop ownership of the RIA method at the departmental level. • Establish procedures to ensure RIA is built into the process of regulatory appraisal. RIA must not be seen as either a “burden” or irrelevant “add on”. • Establish procedures for systematic public consultation. • Establish methods for prioritizing where detailed RIAs should be applied. Source: Kirkpatrick, 2007

17. Need for RIA and Public Consultation in Turkey Consultation criteria in UK • Timing of consultation should be built into the planning process • It should be clear who is being consulted, about what questions, in what timescale andfor what purpose. • A consultation document should be as simple and concise as possible. • It should includea summary, in two pages at most, of the main questions it seeks views on. • It shouldmake it as easy as possible for readers to respond, make contact or complain. • Documents should be made widely available, with the fullest use of electronic means, and effectively drawn to the attention of allinterested groups and individuals. • Sufficient time should be allowed for considered responses from all groups with aninterest. • Twelve weeks should be the standard minimum period for a consultation. • Responses should be carefully and open-mindedly analyzed • The results madewidely available, with an account of the views expressed, and reasons for decisionsfinally taken. • Departments should monitor and evaluate consultations • designating a consultationco-ordinator who will ensure the lessons are disseminated. Source: OECD, 2002

18. Need for RIA and Public Consultation in Turkey Consultation procedures in EU (1) • Aim • ensuring transparency • enhancing workability and legitimacy for all • Consultation plan • ongoing consultation throughout all analytical steps of RIA • the objective of the consultation • relevant target groups • appropriate consultation tool • consultation time • consultation document • Analytical Steps of RIA • Identify the problem • Define the objectives • Develop main policy options • Analyze their impacts • Compare the options • Outline policy monitoring and evaluation Source: EC, 2005

19. Need for RIA and Public Consultation in Turkey Consultation procedures in EU (2) • Consultation tools • consultative committees • expert groups • open hearings • ad hoc meetings • consultation via Internet • questionnaires • focus groups • seminars/workshops • Interactive Policy Making (IPM) Source: EC, 2005

20. Need for RIA and Public Consultation in Turkey Appropriate public consultation tool • Structured, close ended consultation might be over simplistic • On the other hand, consultation fatigue should be avoided • Intensive consultation for prioritized RIAs, whereas simpler techniques for others • Thus, an independent auditory body is needed for prioritization

21. Need for RIA and Public Consultation in Turkey TEPAV’s interest on RIA (1) • The Economic Policy Research Foundation of Turkey (TEPAV) is an • independent, • non-governmental and • non-partisan think-tank, established in October 2004 • TEPAV intends to • increase the knowledge content of policy discussions in Turkey • remove the gap between academic research and policy implementation.

22. Need for RIA and Public Consultation in Turkey TEPAV’s RIA experience (1) • Thus, TEPAV also have common objectives with RIA • Capacity building for RIA and Better Regulation • Enhancing coordination and consultation between the stakeholder organizations • Studies conducted by TEPAV on RIA • TEPAV | MOD Computable General Equilibrium (CGE) Model Studies • EU funded project on impact assessment • Strengthening the capacity of impact analysis, • awareness raising and a micro implementation on environment in the EU accession process

23. Need for RIA and Public Consultation in Turkey TEPAV’s RIA experience (2) • Objectives • Raising awareness on impact assessment among the decision-makers in public and civil society organizations • Educating officials from the corresponding organizations • Strengthening impact assessment capacity through a micro model application • Micro model • Impact assessment on the harmonization of LCP Directive (2001/80/EC) in lignite-fired power plants in Turkey • Pioneering the consultation process among the stakeholder organizations

24. Need for RIA and Public Consultation in Turkey Problem definition (1) Fiscal discipline Privatization Security of supply Import Dependence EU acquis Better Quality of Life Treasury, MoFinance, SPO Limit investment MoEnergy Produce energy MoEnvironment Limit emissions EÜAŞ

25. Need for RIA and Public Consultation in Turkey Problem definition (2)

26. Need for RIA and Public Consultation in Turkey Problem definition (3) • Not a simple problem • Needs a comprehensive consultation process • Stakeholders • Chamber of Environment Engineers • Chamber of Electrical Engineers • Electricity Generation Co. Inc. • Energy Market Regulatory Authority • Ministry of Agriculture • Ministry of Health • Ministry of Industry and Trade • Ministry of Industry and Trade • Ministry of Energy and Natural Resources • Ministry of Environment and Forestry • State Planning Organization • Turkish Coal Enterprise • Turkish Treasury • Union of Chambers and Commodity Exchanges of Turkey • Union of Turkish Doctors • United Nations Development Programme

27. Need for RIA and Public Consultation in Turkey Consultation: Design • Conflict of interest • Allocation of scarce resources • Insufficient communication & consultation among the stakeholders • Two important bodies • Steering Commitee • Working Group

28. Need for RIA and Public Consultation in Turkey Consultation: Steering Committee • Shared reasoning instead of conflict of interests… • Steering committe, • Enhancing the institutional commitment for cooperation and share of data • Monitoring the studies of the working group • Controlling and approving the outputs of the project

29. Need for RIA and Public Consultation in Turkey Consultation: Working Group • They are intended to be the pioneers of impact assessment in their organizations • Working group; • Trained on RIA at the beginning of the project • Will be the agents of the cooperation • Sharinginstitutional data, expertise and knowledge

30. Need for RIA and Public Consultation in Turkey RIA: A threat or an opportunity? RIA as an opportunity • better regulation is essential for competitiveness • more informed policy-making is necessary to avoid potentially adverse social and environmental impacts of rapid change • smoother passage of laws through cabinet and parliament • a catalyst for reform and strengthening of the entire administrative structure • develops individuals as effective policy-makers RIA as a threat • increased workload • changes of responsibility • need for new skills • transparency of decision-making Source: Kirkpatrick, 2007

31. Need for RIA and Public Consultation in Turkey Lessons learned • The problems start from the ‘problem definition’ stage • Government organizations are reluctant for data and information sharing, even within their governmental institutions • Technical skills for RIA implementation is very poor • RIA seen as either a ‘burden’ or irrelevant ‘add on’ • The scope of compulsory RIA must be broadened including all costly legislations and secondary regulation • LCPD Directive

32. Need for RIA and Public Consultation in Turkey Recommendations for Turkey • The idea of ‘shared reasoning’ instead of ‘conflict of interests’ has to become widespread • Political commitment • Bureaucratic support • Technocrat capacity • Data availability and transparency • Coordinator RIA Body • Prioritization and process determination • Quality assurance, transparency check • Technocrat capacity • RIA awareness within CSOs • Regulation monitoring • RIA skills Cultural change within government Public administration reform Active role in decision making

33. Need for RIA and Public Consultation in Turkey Türkiye Ekonomi Politikaları Araştırma Vakfı Söğütözü Cad. No:43 TOBB-ETÜ Yerleşkesi TEPAV Binası 06560 Söğütözü – Ankara Tel: 312 – 292 5500 Fax: 312 – 292 5555 www.tepav.org.tr Dr. Sibel Güven -sibel.guven@tepav.org.tr