Public policy making in the Western Balkans Vesna

Public policy making in the Western Balkans Vesna Bojicic- Dzelilovic Sarajevo, 6 June 2014

1 The framework of the study 2 Research overview 3 Key findings

Policy network analysis “seeks to explain the formation of state-interest organization networks, their persistence and change over time, and the consequences of network structures for public policy making outcomes” (Thomas 2010 cif. Knoke, 2007: 4).

Context • proliferation of actors • weak state and civil society • delayed transition & the politics of reforms

Research overview Core questions: • What is the political, economic and social context and drivers of a reform? • How was the policy designed/developed and implemented? • Who were the stakeholders and policy actors involved in designing, implementing and evaluating the impact of the policy? • What kinds of collaboration, collusion, or competition occurred? • Was there an evidence of policy networks, and if so, who were the actors, leaders, their spheres of influence and special interests? • How did the networks and coalitions influence the scope, timing and the pace of reforms?

Country overview Policy Areas Table 1. Overview Key Issues 1. Part 1: The Western Balkans in the EU Neighbourhood: Economic and Social Policy Reforms Shaping Social Policies in the Western Balkans: Legal and Institutional Changes in the Context of Globalisation and Post-Socialist Transformation 1. Social policy – higher education, employment and social protection. 1. 2. 3. Fiscal Policy and Competitiveness in Croatia 1. Economic and fiscal policy. Fiscal policy making in the context of EU harmonisation and accession rules and process. Fundamental, paradigm shift in social policies of the Western Balkans with the transfer of responsibility for the provision of social security from the state to individuals, families and social groups. The cumulative impact of several waves of social disintegration motivated by: the disintegration or weakening of the state; conflicts between members of different ethnic and political groups; the collapse of socialist-era institutions compounded by the slow and inconsistent development of new institutions that are agents of social integration. Difficulty in re alligning interests given the specific context of transition in the Western Balkans 1. 2. 3. Political economy of economic and fiscal policy making in the context of EU harmonisation and accession. Factors influencing policy direction, decisions, implementation and timing and their impact on economic performance and competitiveness. Conflict of interest among the key policy actors and constituents who influenced critical fiscal policy decisions, Building Competitiveness and Increasing Trade Potential in the Western Balkans: Economic Policy Making in Preparing for European Integration Trade policy reforms, the Western Balkan economies. Economic policy. Trade liberalisation, financial liberalisation and privatization. 1. 2. 1. The Political Economy of Economic Liberalisation and Competitiveness in Bosnia and Herzegovina 1. 2. Trade policy reforms are required for the Western Balkan economies that are part of the EU Neighbourhood and signatories to the SAA agreement. These policies are influenced by three regional and global trade regimes: CEFTA 2006; the EU; and the WTO. There is a significant gap between policy reform and policy implementation. This gap is influenced by conflicts of interest among key actors and inconsistencies in the implementation of policies under different trade regimes. This gap adversely affects the competitiveness of the Western Balkan economies. Complex political and economic segmentation at the national and sub-national levels in post-conflict Bi. H influence policy decisions, policy making and implementation in the areas of trade liberalization, financial liberalization and privatization. The segmented political and economic structure of policy making is reflected in the lack of a coherent strategy for generating private investment and raises significant governance issues in policy implementation. 1. PART II: Policy Making and Governance - Building Markets and Competitiveness in the Western Balkans Strengthening Regulatory Governance — the Case of Serbia 1. 1. 1. Economic policy. Regulatory governance. . Investment Policy Design, Process and Implementation in Kosovo Economic policy. Foreign investment Kosovo faces a range of challenges of creating a stable environment that is attractive for private investment 1. Nascent institutions, weak governance and special interests undermine reform implementation and accountability Montenegro: Enhancing Competitiveness and Accelerating European Union Integration – The Role of Higher Education policy. 1 The role of the international community, donors and the EU in shaping policy agendas. 2 Limited capacity and resources for reform implementation. 3 Strong opposition by vested interests among public higher education institutions Managing the Financial Crisis: Credit Crunch and Response in Serbia Financial policy. Serbia’s policy response to the 2008 financial crisis. . 1. Credit buble, its development and credit crunch 2. Policy response by a tri-partite coalition between the National Bank, the IMF and foreign banks 3. Implementation challenges: winners and losers, limited capacity to conduct exchange rate policy in a small, open, transition economy 1. 2. 3. Regulatory governance has been one of the reform priorities, with strong involvement of international donors and the EU in establishing reform priorities, policy design and implementation. Mobilization of constituencies to support the reforms. The critical importance of capacity building and resources for reform implementation. Part III: Policy Making and Governance: National and Sub-national Policies Strengthening Competitiveness In The Republic of Macedonia: A Regional Development Policy Perspective Regional development policy. 1. 2. 3. 1. Alignment of the policy with the EU regional development policies Limited implementation capacity, absence of an established framework for implementation, inadequate expertise across key policy actors limited resources Importance of policy coordination in pulling resources and synchronizing different policies affecting competitiveness in a small country Local Governance and Regional Development in Albania Local and regional development policy. 1. Weakness in the institutional framework for decentralization 2. Limited implementation capacity, fragmented policy making, limited resources, weak reform constituency to implement regional development policy 3. Challenge of balancing local and regional level governance.

Focus • The role of policy makers through the policy process • The nature of coalitions and collaboration between policy makers within government and the role of factors outside of government • Challenges facing policy makers in securing support within government and from extra- governmental groups or organizations

Findings • • The policy process in a democratic, market-driven sense is nascent; no policy networks Evidence of forms of collaboration on specific policy issues within government (i. e. , inter-ministerial and/or inter-organizational) and between the executive and parliaments- the extent of this collaboration defined by government coalitions and often limited within party lines. Informal, unstructured and opportunistic policy coalitions The nature of coalitions and collaboration between policy makers within government characterized by the domination of small groups of policy elites Private sector and civil society play no prominent role but trade union in some areas do The policy agendas are often reactive to internal and external stimuli and largely driven by external agendas and requirements. Professionalization of public service and the shift to regulatory governance in the context of EU alignment is having some impact on the policy making.

Conclusion • Weak governance systems are serious problem in the Western Balkans • Strengthening the policy making process and building capacity in government, academia, the private sector and civil society to produce technically sound analytical inputs for the policy process is key in order to improve the quality, ownership, credibility, and sustainability of the policies that are critical for economic growth and social development.