Governance Issues in

Economic Society
“how transparent rules are, how
reliable they are, and what results
they encourage make a lot of
difference to investment as well as
other related indicators of economic
Development”
 Economic Society

“Economic society” refers to

state-market relations.

This arena is constituted by

the rules that apply to these
relations.
It is different from civil society in that
economic society is made up of actors
engaged in the pursuit of monetary
gain.

Thus, a private corporation or a small,

one-person business is part of this
arena.

Any organization that speaks on behalf

of businesspersons, e.g. a Chamber of
Commerce, carries out its activities in
civil society.
Economic Functions by the State

Formulating economic policy

Regulating the economy
Providing economic
infrastructure and services
Providing public goods
Revenue generation
Dealing with other market
failures
 Economic Regime

The rules that apply to

economic society are often
referred to as the economic
regime of a country.
 Factors shaping
Economic Regime
Liberalization (economic and
financial markets)
Political democratization
Globalization
Specific Issues relevant to
Economic Society and
Governance
(1)information sharing
(2)property rights
(3)competition, regulation
and corruption
(4) global influences
 Assessment
Indicators relevant
to Governance and
Economic Society
Respect for Property Rights

Those in positions of public authority

have a vital role in ensuring that property
rights, whether private, common or
public, are respected and enforced.

These rules are very important for

material progress, both at micro and
macro levels.
Equal Application of Regulations

The extent economic regulations

are applied equally to firms in the
economy.

Applying and enforcing

regulations equally is important
in providing a positive business
climate.
Wherever regulations are
applied in an ad hoc manner
or where special treatment is
given to cronies of those in
power, the credibility of the
rules governing economic
society is very much in doubt.
“Cost of doing business”
 Corrupt Transactions
Whether a business license can be
obtained in a straightforward and
transparent manner or it involves a
number of other transactions that go
contrary to the stated rules and
regulations. This gives us a sense of the
extent to which respondents see
corruption prevailing in state-market
relations.
State-Private Sector Consultation

The extent to which there is

consultation on policy issues between
public and private sector actors.
Such consultation is a measure of the
trust and cooperation that exists
between state and market actors.

What do the rules allow in terms of

such consultation?
 New Global Economic Rules
International economic interactions
(trade, finance and technology flows)
have become an increasingly significant
factor in national development.

The challenge is how to manage these

processes so as to enhance the benefits
and reduce the negative effects upon
people.
How well do state and
market actors respond to
this challenge by
establishing and enforcing
rules that are perceived as
helpful to their country?
 CORPORATE
GOVERNANCE
CORPORATE SOCIAL
RESPONSIBILITY
"Corporate social responsibility is the
continuing commitment by business to
behave ethically and contribute to
economic development while improving
the quality of life of the workforce and
their families as well as of the local
community and society at large.“ (World
Business Council for Sustainable
Development)
 Triple Bottom
Line

Any idea?

(John Elkington, co-founder of the business consultancy

SustainAbility, in his 1998 book 'Cannibals with Forks: the
Triple Bottom Line of 21st Century Business'.)
 FACTOR 4

It refers to a hypothetical fourfold

increase in 'resource productivity',
brought about by simultaneously
doubling wealth and halving resource
consumption.

(1998L. Hunter Lovins and Amory Lovins of the Rocky

Mountain Institute, and Ernst von Weizsäcker, founder of
the Wuppertal Institute for Climate, Environment &
Energy)
 FACTOR 10

In the long term, resource use in

developed countries needs to be
slashed tenfold if we are to
approach sustainability.
 COMMENTS/REACTIONS:

How can we enhance the role

of economic society in
governance at the same time
assuring equity of benefits to
all sectors or public?