World Movement for Democracy: Third Assembly

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WORKSHOP REPORTS: Economic Reform

Democracy, Governance, and Markets: Ensuring the Inclusion of the Private Sector and Political Parties in Policy Making
Organizers: Center for International Private Enterprise – USA International Republican Institute – USA	Moderator: George Folsom – USA Rapporteur: John Sullivan – USA	Presenter: Charles Oman – USA

The workshop revolved around discussions of democracy as not simply meaning elections and free speech, but that at the heart of democracy and development is the need for good governance. Without democratic governance, a deficit emerges between processes and outcomes. This is illustrated by elected autocrats engaging in crony capitalism, rigged privatizations, and seizures of property, while failing to educate citizens and improve development. To close this deficit, governments and political parties should institute inclusive decision-making processes to ensure the involvement of the private sector, civil society, labor unions, and others.

Workshop participants reviewed the mechanisms for holding political parties and leaders accountable, such as different models of elections and oversight of government administration by capable legislatures. Participants also noted the essential role played on the demand side of the political equation by the business, labor, and NGO communities, as well as by political parties, in the supply of good policies. Outcomes and recommendations from this workshop included:

Long-term growth and improvement in human development and productivity is important for sustaining democracy.
Private-sector participation in decision making is crucial for developing citizen confidence in parties and in democracy generally.
Privatization is essentially a political process and should be implemented democratically. Participants also stressed the importance of focusing on the democratic nature of daily decision making in a country, and that addressing critical questions depends on citizens having a voice in decision making and the management of public funds.

The Role of Business Associations in Democratic Development
Organizers: Durban Chamber of Commerce – South Africa Turkish Economic and Social Studies Foundation – Turkey Center for International Private Enterprise – USA	Moderator: John Sullivan – USA Rapporteur: Sarah Olsten – USA	Presenters: Can Paker – Turkey Jeya Wilson – South Africa

The workshop discussion included participants from the NGO, business, and academic communities, providing for dynamic discourse, varied points of view, and much networking. More than 14 countries were represented.

Observations:
Because business associations are laboratories of democracy they are integral to the democratic process. Formed from a bottom-up process and attracting members of the business community, business associations represent the entrepreneurial class, which is largely composed of members of the middle class, thereby making them essential vehicles for popular participation in a democratic society.

In fact, the famous democratic theorist, Alexis de Toqueville, remarked that one of the main reasons for the success of democracy in the United States immediately following the American Revolution was the wealth of associations established to represent citizens’ concerns to policy makers. As advocates for the private sector, business associations are agents for concerted political action, and thus act in the best interest of their members, industry, and nation. They not only play a pivotal role in promoting good governance and sound policy making, but also maintain the private sector as the engine for a nation’s economy and promote an open society and transparent government.

Challenge:

How can business associations promote democratic reform through advocacy of policies that promote anti-corruption initiatives, freedom of economic information, participatory decision making, and judicial reform?

Recommendations:

Globalization has highlighted the need for sound institutions and legal sectors. Put simply, without proper institutions, companies and entire economies risk being left out of the global marketplace. The creation of international standards are thus forcing companies to reevaluate the way they do business, and business associations are key to the promotion of these standards.
Business associations should be broad-based in their membership.
On the question of whether an “umbrella,” under which business associations can unify, is valuable, participants agreed that it must be tailored to each country.
Business associations should adopt standards of accountability, transparency, and other democratic standards so they serve as a role model for their members.
Countries need to create an association pattern that suits, and is tailored to, each unique circumstance. If a pattern is imported, an association may not be structured to meet the needs of its members.
Building associations that represent their members and are broad-based create democratic development.
Economic liberalization helps to create a foundation for democratic liberalization and development. In addition, it helps to generate anti-corruption campaigns.