Clients: Foreign Investment Advisory Service, World Bank

As the OECD has noted, market openness increases the benefits of regulatory reform for consumers and national economic performance. Reducing regulatory barriers to trade and investment enables countries in a global economy to benefit more fully from comparative advantage and innovation. With the progressive dismantling of traditional barriers to trade, “behind the border” measures are more relevant to market access, and national regulations are exposed to unprecedented international scrutiny by trade and investment partners. Regulatory quality is no longer a purely “domestic” affair.

In April 2003, Scott Jacobs presented the keynote speech, "The importance of institutions in determining the investment environment," at the FIAS South Asia FDI Roundtable in the Maldives. He noted, "Current market-opening talks go beyond classical border barriers, such as tariffs, to attack far more difficult barriers – the thousands of behind-the-border barriers to trade and investment that arise from inefficient institutions, lack of transparency, poor regulations, uncontrolled market abuses, and corrupt administrative procedures.... The correct debate about institutions is not about the size of the state, but its role and its effectiveness, that is, its quality. Institutional reform – adapting institutions to perform new roles and functions in harmony with social needs – is a key ingredient of successful reform. What new or strengthened institutions will increase the attractiveness of an economy to FDI inflows? A growing body of research links institutional success and failure, to economic growth and market development, over time and across countries..." Download his report HERE.

Jacobs and Associates is doing considerable work on how good regulatory practices improves market openness. In May 2003 to October 2003, Jacobs and Associates is preparing a report for the World Bank on export diversification and regulatory reform in Ghana. Our report will examine how improved regulatory practices that ease market entry and resource allocation, reduce barriers to new economic opportunities, and boost market transparency, flexibility, and pro-consumer competition can assist Ghana in boosting its competitiveness, trade diversification and investment.

In Senegal and Mauritania, Jacobs and Associates examined in 2002 how poverty reduction could be supported through greater economic integration of those two countries in the West African region, and through increasing their participation in international markets. We concluded that, as market reforms proceed in its domestic markets, Senegal and Mauritania have a strong interest in seeing closer market integration in West Africa. The value of their domestic market reforms is amplified in larger regional markets. Likewise, in wider international markets, regulatory reforms can help the country meet the legal obligations of the international trading system and boost greenfield investment by improving the two countries' reputations for transparency, neutrality, and due process, and building new institutions and practices expected by international norms.