Law

Rule of Law

Good Governance: Rule of Law

Anti-corruption Strategy

2002

Good Governance 2002 (pdf version)

Legal & Regulatory

  • Legal and Regulatory Assessment
  • Streamlining
  • Civil Society Participation
  • E-Governance/Access to Information

Approach

  • Goal – Self-Correcting, self-improving system of globally competitive, corruption free governance
  • Means – Stakeholder participation necessary for policies and laws that
    • meet Armenia’s current and future needs
    • stakeholders “own” and will voluntarily comply with

Action Plan  

  • Action – Provide framework for a process that will produce desired result
    • Enable stakeholders to engage in evaluation of current situation
    • Clarify policy objectives
    • Understand constraints
    • Generate options and solutions
    • Build consensus for solutions best suited to Armenia’s needs

Not Give, but Find Solutions

  • Won’t give solutions, work together to find solutions
  • In order to avoid
    • Imposed solutions
    • Solutions that have not been tested in similar situations
    • Solutions at odds with values, attitudes and practice
    • Solutions that are too complex, costly, or difficult to understand or implement
    • Solutions that have not been debugged, quality tested, abused-proofed

Hypotheses

  • Hypotheses
    • Discussion
    • Testing
    • Refinement
    • Rejection
  • Aim to produce new better hypotheses and policies

Hypothesis 1

  • For Armenia to prosper, it must be home to globally competitive companies and workers

Hypothesis 2

  • For Armenia to be home to globally competitive companies and workers, it must have a globally competitive environment.

Hypothesis 3

  • Creating a globally competitive environment requires public-private partnership, but the public sector must take the lead.

Hypothesis 4

  • To be globally competitive, the environment must be corruption-free, or corruption must be reduced to a level that makes Armenia at least as attractive on the whole as its competitors.

Hypothesis 5

  • To be globally competitive, it must be at least as easy, predictable and cost efficient to live, work and produce in Armenia as in other countries.

Hypothesis 6

  • The “rule of law” and legal and regulatory framework are decisive factors for Armenia’s global competitiveness and ultimate prosperity (Barro thesis).

Hypothesis 7

  • The global standard for rule of law is “due process” which has two aspects– substantive and procedural.

Substantive Due Process

  • Substantive Due Process
    • Legal efficiency
    • Legitimate state end – Policy Clarification
    • Least restrictive means

Procedural Due Process

  • Procedural Due Process
    • Notice/petition
    • Opportunity to be heard
    • Reasoned decision-making
    • Review/Reconsideration/Appeal

Hypothesis 8

  • To the extext corruption in Armenia is “victim-of-circumstances” corruption, it can be corrected or ameliorated by institutional or legal reforms.

Hypothesis 9

  • To the extent that Armenia’s corruption is the result of a “culture of corruption,” it will require changes in values, mentalities and attitudes.
    • Might makes right
    • Money talks
    • My friend right or wrong

Hypothesis 10

  • When the formal rules of a system do not produce good results, from the point of view of stakeholders, they will circumvent the rules and will create an informal system of rules.

Hypothesis 10a

  • When people view the overall system as reasonable, fair and equitably applied, they are likely to exercise self-restraint and voluntarily comply with the laws.

Hypothesis 11

  • The propensity to circumvent the law depends upon a number of factors:
    • Quality of laws
    • Correspondence to stakeholders’ interests
    • History, culture, tradition
    • Values – relationship vs. rights
    • Degree to which people embrace the law as a good that serves their needs and the common good.
    • Awareness
    • Ease of compliance . . .

Hypothesis 12

  • In Armenia, there is an observable gap between the formal (written/enacted) laws and the informal rules. Nevertheless, there is, as in any society, widespread, if often unsuccessful attempts, at voluntary compliance.

Hypothesis 13

  • The gaps between written and unwritten rules can be viewed from a number of perspectives:
    • Substance
    • Procedure
    • Implementation
    • Results from the state’s perspective
    • Results from the private perspective

Substance

  • Good policy
    • Legitimate state purpose that enjoys a broad consensus
    • Fair and equitable
    • Good results

Procedure

  • Due process
  • Fair and equitable, open, transparent
  • Not burdensome to implement or comply with
  • Least restrictive means to a legitimate state end
  • User-friendly, consumer-oriented

Implementation

  • Implementation follows written rules
  • Rules as applied = rules as designed

Results – State Viewpoint

  • The rules regularly achieve the legitimate state interest
  • Policy is effectively carried out

Results Private Viewpoint

  • Good result for the private stakeholder, taking only personal interest into account

Sample Diagnostic Chart

Hypothesis 14

  • Drastic or inflexible penalties more often result in circumvention than deterrence.

Hypothesis 15

  • Abuse of discretion and circumvention can result from both under- and over-specificity.

Hypothesis 16

  • Much corruption arises from the effort to circumvent a formal system which the stakeholders have determined does not correspond to their actual interests, practices, values and behaviors:
    • Willing giver, willing taker
    • Resigned giver, entitled taker
    • Unwilling giver, coercive taker
    • Unwilling giver, coerced taker

Hypothesis 17

  • Circumvention is a way of avoiding risk.
    • Risk of law-abiding behavior that others will not play by the rules (prisoners’ dilemma)
    • Risk of complex, unpredictable rules
    • No one wants to be a chump

Hypothesis 18

  • Laws and regulations will be better designed, if they must be accompanied by a “legal efficiency report” that
    • Clearly states the purpose of the law
    • Demonstrates that the law is the least restrictive means to a legitimate state end
    • Demonstrates that the law permits all common transactions in a globally competitive way
    • Quality control – debugged, abuse-proofed

Hypothesis 19

  • Mandatory notice and a meaningful opportunity to be heard will improve the quality of laws and regulations.

Hypothesis 20

  • Reasoned decision- and rule-making will improve the quality of laws and create the basis for a self-correcting system of rule-making.

Hypothesis 21

  • Publishing of judicial opinions on the internet is a non-intrusive, cost-effective way improve court transparency.

Hypothesis 22

  • Review and Reconsideration will improve the quality of laws by providing for correction as a natural and foreseeable part of the rule-making process.

Hypothesis 22

  • Anti-corruption is one societal goal among many, and it should be implemented in such a way as to achieve the greatest long-term benefit with the least short- and long-term negative side effects.

Hypothesis 23

  • Policy clarification requires a clarification of the role and goals of government in a free market democracy.

Hypothesis 24

  • In order for citizens to willing pay for services and comply with rules, government must perform in a fair and competent way certain minimum functions and provide certain public goods and services.

Hypothesis 25

  • Satisfaction with public services depends upon a realistic assessment of the budgetary and other constraints on the public sector.

Hypothesis 26

  • Within existing constraints, Government should only do what it can do well. First do no harm.

Hypothesis 27

  • While a living wage is not sufficient to eliminate the incentive for corruption, it is necessary.
  • salary = officially make + unofficially take

Hypothesis 28

  • The more government officials there are and the more interactions that are required between officials and private sector, the more the risk of corruption.
  • Reducing the size and scope of government can reduce corruption.

Hypothesis 29

  • Rules should be no more complex
    • than necessary to achieve a legitimate state end
    • than the ability of the people and system to understand and administer it
    • than the ability of the people and system to pay for them

Hypothesis 30

  • Corruption cannot be eliminated without reducing the size of government to the level that society can afford so that its efficiency and salaries are improved.

Hypothesis 31

  • Paying civil servants is not sufficient. Honesty and competence, including civil society evaluation of service, need to be criteria for hiring, promoting, firing, and retraining of civil servants.

Hypothesis 32

  • Separating (1) policy-making from (2) oversight and (3) implementation functions could reduce corruption.

Hypothesis 33

  • Introducing the concept of respondent superior, currently applicable in the private sector, could reduce corruption, that is, superiors are liable for the wrongful actions of subordinates.
  • Remove “just taking orders” as a mitigating factor

Hypothesis 34

  • Corruption can be reduced by converting informal cash flows into formal systems will by public services into a fee-for-services system –e.g., education, health.

Hypothesis 35

  • Corruption can be reduced by subsidizing individuals to purchase necessary services rather than subsidizing institutions to provide free services.

 

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