5.2.8. Competitiveness Impacts of Business Environment Reform (CIBER)

Competitiveness Impacts of Business Environment Reform (CIBER)

Recently, USAID developed and pilot tested the Competitiveness Impacts of Business Environment Reform (CIBER) tool in order to 1) engage value chain participants in identifying the aspects of the regulatory environment that most negatively affect value chain competitiveness; 2) quantify the costs and benefits of implementing required reforms; and 3) develop practical and effective advocacy plans for achieving reform.

The CIBER process takes a targeted approach toward assessing regulatory reform requirements (see Figure 1). Rather than examine all regulations, administrative procedures and judicial enforcement issues affecting a value chain, it uses input from enterprises and industry experts to determine the scope of analysis. It was pilot-tested on the Brazilian cashew nut value chain.

Figure 1: Competitiveness Impacts of Business Environment Reform (CIBER) Process Map

The CIBER approach follows the end market and chain analysis phase of the value chain project cycle. The first step is to work closely with value chain stakeholders to identify key regulatory and administrative constraints to competitiveness. These constraints may be imposed by overly burdensome, outdated, inappropriate or insufficient regulation. This analysis may draw from a variety of regulatory categories including:

• Regulations governing business activity/factors of production (labor regulations, land use regulations, financial sector regulations, etc.)
• Required interaction with authorities (business registration, tax collection, licensing, property registration, etc.)
• Transactions in downstream markets (access to markets, compliance with health, quality and safety standards, foreign exchange restrictions, etc.)
• Transactions in upstream markets (access to inputs, imports, etc.)

Next, stakeholders are consulted to identify and ground-truth priority issues related to the business environment. This information may be gained through surveys, one-on-one interviews or focus groups. Consultation with industry experts and international buyers is also helpful for identifying issues that may not be visible to local participants, such as gaps in intellectual property protection that impede opportunities for upgrading.

Once a shortlist of issues has been identified, the method guides researchers, project staff and industry stakeholders through the process of identifying the costs imposed by specific laws, regulations, implementation issues or lack of necessary regulations. In some cases it is possible to track the added cost per unit of the product under consideration, as well as added value at each stage of production, using a cost modeling approach. In other instances, such as for issues of quality certification, a qualitative approach or general estimate of the magnitude of impact will be sufficient.

At the next stage of the CIBER exercise, facilitators engage stakeholders in a process of weighing the costs and benefits of business environment reforms that target the constraints identified or reinforce positive impacts.

Next, the research team assesses the political and administrative feasibility of each specific reform. This assessment is based on a variety of factors that reflect the degree to which reforms will be possible and over what timeframe. The feasibility assessment supports the final prioritization of reform activities and helps programs to determine short-, medium- and long-term priorities, informing the development of an advocacy approach. These may be designed around public-private dialogue initiatives and/or use locally appropriate media outlets to build a broader base for reform support. Advocacy approaches for policy, regulatory and/or administrative reform will ideally be led and owned by local stakeholders in order to ensure sustainability of these efforts over time.

CIBER POLITICAL FEASIBILITY ASSESSMENT CHECKLIST