ABSTRACT
A developing economy such as that of the Philippines faces the challenge of how to create an enabling environment for economic growth and development. The policy development process leads to the creation of that environment, but how does one nudge forward the policy development process? Why are some reforms adopted while others face stiff resistance? The policy development process is not a disembodied phenomenon but is nested in an effectively functional institutional setting. There can be no effective policy development process if institutions supporting and implementing it are ineffective or dysfunctional. Many factors may explain the acceptance of or resistance to reforms, such
as the message content of the proposed reform or package of reforms, the relative impacts on various sectors of the economy, the identity of gainers and losers, the presence of a broad coalition of support or lack of it, and many others. This chapter maintains that acceptance of or resistance to reforms, or even of the whole policy development process, may be influenced by the presence and active participation of institutions supporting the process. Both the content (message) of the reform and the medium used for acceptance of the reform are equally important. In this chapter the ‘medium’ referred to is the set of institutions that help or motivate the policy development process. A distinction can be made between institutions supporting the policy devel-
opment process and institutions implementing it. Typical discussions would focus on the important role of implementing institutions in the development agenda. The recent experience of fast-growing ASEAN countries such as Malaysia and Thailand shows that it is not sufficient to have the right development policies; it is equally, if not more important, to have effective (implementing) institutions. A combination of efficient policies, enlightened and strong leadership and competent institutions is indispensable to growth and development. For instance, a country may enact a competition law in support of the market economy that establishes a framework for promoting the competitive process and economic efficiency, but it will need an effective operational structure to enforce that competition law. Implementing institutions,
whether formal or informal, are thus the means through which authority is exercised in the management of resources of the state. However, the other type of institution, the supporting institution, also has
a unique role in the policy development process and in creating the enabling environment for well functioning markets. This chapter discusses the critical role that supporting institutions, such as independent review institutions and coordinating institutions, can play in moving forward the policy development process. It is common to identify inputs to the policy-making process as if these were given. However, this chapter considers how such inputs are produced and suggests a strategy to improve their production and dissemination to policy makers. The paper uses the experience with current reform efforts of the Philippines in public expenditure management to illustrate the strategic role of supporting institutions in producing and providing important inputs to key policy makers for decision making and thus, in nudging forward the policy development process. The chapter discusses not only the instruments for moving forward the
policy development process (e.g. the supporting institutions) but also the process of moving it forward. Implicitly, the chapter acknowledges the limitations of focusing exclusively on what policy reforms are needed or on what institutional arrangements would bring about the policy development process, and indicates the need to understand the policy development process itself. It is important to grasp how policy reforms are formulated, reviewed or amended and presented to the public and finally, to decision makers at the executive level, or if needed, to legislators. The end goal of the policy development process is a reformed environment, but sometimes the discourse on this process says very little, if at all, about how to shift from a pre-reformed situation to the reformed situation, that is, the dynamics of moving to a new paradigm. To put in proper context the challenges in the Philippines’ policy development process, the next section provides a bird’s eye view of the current situation.
