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The current modality of business input into public policy is not working

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Ian Kilbride is Honorary Professor at Stellenbosch Business School, and chairman of Spirit Invest and the Spirit Foundation.

Currently, business is left to comment on green papers, white papers and draft legislation. This is far too late in the policymaking process to allow meaningful business input.

It’s not sexy, but public policy is too important just to be left to government. But what role, if any, should business play in public policy formulation? 

Currently, business has little effective input into policymaking, yet is a major implementer. Both the quality and effectiveness of public policy could be enhanced by the structured integration of business into the policy conceptualisation and development process. 

While this may be construed by some as having the potential to institutionalise unfair corporate lobbying and open the door to state capture 2.0 on an industrial scale, if well-governed and transparent, public-private policy engagement holds significant potential. 

Public policy is a rather bland term used by many yet understood by few. 

The simplest, but least useful, definition holds it to be whatever the government chooses to do or not to do. A narrower but more useful interpretation understands public policy to be a set of interrelated decisions by government that are institutionalised in laws, regulations and guidelines. 

Public policy is typically aimed at tackling an identified problem or issue. Not all public policy is based on problem-solving. Good public policy should seek to promote or incentivise opportunities for higher economic growth, fuller employment, quality education and effective public health for example. 

In other words, public policy need not be restrictive, but rather enabling. 

The main driver of public policy in democratic South Africa remains the correction of historical injustices and the ethical principles of justice and equity underpinning this are laudable. But the conceptualisation and implementation of public policy, no matter how just, must be considered within the context of cost, practical implementation and possible unintended consequences. 

In his 2020 State of the Nation Address, President Cyril Ramaphosa delivered a blinding glimpse of the obvious in stating that “government cannot fix the economy alone” – a message he repeated in July last year. 

The corollary to this recognition is that government cannot go on making public policy alone either, particularly when this undermines the very objectives of national development, economic growth and job creation. 

Demonstrably, the current modality of business input into public policy is not working. Currently, business is left to comment on green papers, white papers and draft legislation. This is far too late in the policymaking process to allow meaningful business input into issue identification, objectives, costs and risks. 

While the Cabinet’s requirement for a Socio-Economic Impact Assessment (SEIA) to accompany the publication of major policy, legislation and regulation is a progressive step to good policymaking, too often this is merely a cookie-cutter template completed by the responsible departmental official or, worse still, bypassed entirely. Moreover, SEIAs can be a policy black box in which what happens to business’ input as impacted stakeholders is seldom clear or accounted for. 

Moreover, the institutional forum for labour-related matters between government, business, labour and civil society in the shape of Nedlac has often proved unwieldy and dysfunctional. 

So, what are the merits of more structured engagement between business and government, particularly earlier in the policymaking process? 

First, we need to clear the historical blockages. Deep levels of distrust permeate the relationship, and previous initiatives at structured dialogue, such as former president Thabo Mbeki’s Big Business Working Group meetings, descended into frustrating monologues, particularly on subjects such as HIV/Aids, Zimbabwe and B-BBEE. 

Public policy engagement cannot be a case of “back to the future” on terms dictated by government. The range and depths of the challenges facing the country, government and President Ramaphosa, in particular, demand a new paradigm of engagement that accepts the bona fides of business, its legitimate interests and rights as a key stakeholder and its self-interest in contributing to more effective public policy. 

Business can demonstrate its bona fides on a number of grounds. 

First, government operates in a condition of imperfect knowledge when formulating public policy, and business brings to the table a considerable repertoire of sector, industry and issue-specific knowledge particularly in leading-edge sectors. 

Business’ knowledge base is often more closely attuned to global best practice and it has first-hand international experience of good and bad public policy that it can bring to the party. This knowledge base can and should be put to good use by government in its public policy thinking and formulation. 

Second, while profit-seeking, South African business operates overwhelmingly in the national interest, and the artificial and outmoded notion that South African business represents merely the interests of white monopoly capital is simply a politically convenient misrepresentation of reality. 

By definition, business in South Africa is not only a major taxpayer, but a far bigger employer of labour than government, and on these grounds alone should be viewed as having a legitimate voice in public policy formulation. 

Third, and perhaps most importantly, the very weave of the national fabric of South African society is fraying and is in urgent need of repair, and business has a key role in pulling the country back from the brink. 

The currency and impact of the unifying rhetoric and symbolism of President Ramaphosa’s New Dawn have been spent, and the real new dawn is the recognition that a regulatory state alone cannot deliver the basic public goods demanded by our complex and diverse society. 

By contrast, despite a sometimes toxic relationship with government, business repeatedly demonstrated a willingness and capacity to deliver the goods and services for which the state is failing. 

The time is ripe and in the national interest for government to invite business as legitimate partners to forge better public policy for all. DM

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