Good governance in institutions can help build – or rebuild – a culture of trust in which economies grow faster thanks to better policies, transparency and efficiency. That is why the EBRD places great emphasis on developing well-governed economies.
The importance of trust for the well-functioning of institutions was one of the topics discussed at the 2017 EBRD Annual Meeting, by a panel of experts moderated by Milica Delevic, EBRD Director Governance and Political Affairs.
Recent anti-populist electoral results in France, the Netherlands and Austria show that trust is not lost, according to Ivan Vejvoda, Director of Europe project, Institute for Human Sciences. Capitalising on trust is a duty for these new governments. They need to follow up on promises with reforms and help establish a new narrative, re-launching a civilised democratic discourse.
Tackling corruption is, of course, key. In order to do it, political will, good strategies, trustworthy people and transparency are essential, argued Justice Marin Mrčela, Chair of the Council of Europe’s Group of States against Corruption (GRECO). “Like for any crime, this is a war we will not win”, he warned, “but we nevertheless need to persist, and do whatever we can by putting up a good fight”.
Corruption of course comes at a cost. And not just an economic one, for taxpayers, businesses and entire markets. It also has high social costs which result in unemployment and even poorer health. Francis Malige, EBRD Managing Director for Eastern Europe & Caucasus, illustrated the case of Ukraine. There, the EBRD has helped address the loss of trust by supporting several anti-corruption initiatives, including the establishment of its first independent Business Ombudsman; increasing transparency in public procurement through a modern e-platform; and implementing a programme of corporate governance reforms for the country’s national energy company Naftogaz.
Better governance cuts red tape where corruption can find a breeding ground. Judge Tsogt Tsend of the Administrative Court of Appeals in Mongolia mentioned the measures being taken to reform the judiciary in his country, where the weak record of public trust in institutions, as in many EBRD countries, is due to a history of political and economic transition. For example, since 2009 citizens in Mongolia can access the database of judgements and the recent adoption of open, purpose-built courtrooms reflect progress towards more transparency.
What is the role of the private sector? Trust in modern, performing institutions helps to increase domestic and foreign investments. But in turn, large corporate investors can be a driving force to fight corruption by providing feedback to governments so that adequate reforms can respond to real needs, Malige suggested.