How to Select BEE Reforms
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| Impact | Removing constraint reduces feedstock cost by 50% |  |
| Cost | Will require parliamentary action - significant education analysis of impact and advocacy involved |  |
| Time | Parliament could pass it in one year |  |
| Difficulty | There is little current support outside of industry No lead firms appears willing to champion this Current licensee holds significant sway in parliament |
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| Summary | The negative and positives are roughly equal There may be better opportunities in other reforms |
Figure 1: Reform Selection Process: Example of a Shrimp Feedstock Import Constraint
When targeting reforms, four criteria—impact, cost, time and difficulty—should be assessed together with the trade-offs between them (see Figure 1). The resolution of a particular policy constraint may be necessary to reach project objectives or maximize results in a value chain activity. However, before selecting the policy for reform, the feasibility of completing the implementation of the reform within the project cycle should be considered.
Some BEE constraints, such as property rights, may require a much longer timeframe to address—often 10-20 years. Furthermore, governments tend to avoid reform if benefits are not expected to materialize until they are already out of office. Therefore, reforms that can be quickly completed and produce benefits within a short period of time are more likely to receive government support. The World Bank has found that the benefits of reforms listed in the “Doing Business” framework often accrue 12-18 months after the reforms are completed. Conversely, beginning a reform agenda with difficult reforms such as land tenure or attacking corruption in the customs administration constitutes a high-risk strategy. By addressing simpler issues first—such as reducing the number of inspections—success and momentum can be created and credibility established, allowing for a transition to increasingly complex policy issues.
The cost of a reform should be assessed carefully. Value chain analysis permits identification of complementary activities being carried out by other donors or projects that might be leveraged to reduce the cost and increase the effectiveness of a BEE intervention.
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