TEMAS PRINCIPALES

Business people who complained during our interviews of problems in state-business relations were asked to give examples and to state what they believed were the causes of these problems. Their answers show that in-vestors in Jordan suffer not only from lengthy, complicated and expensive procedures but also from a lack of fairness and predictability in adminis-trative and political decisions (see Figure 6). Reasons given for these shortcomings were the bad quality of regulation, deficits in public admini-stration, and the role of favouritism (see Figure 7).

Types of problems

Apparently state-business relations in Jordan suffer from a lack of effi-ciency. 67 % of our interviewees were dissatisfied with the time required to complete certain administrative procedures. 37 % said that the number of steps within each procedure was unreasonably high, and 11 % said that very high costs were associated with the procedures.

However, state-business relations also suffer from a lack of fairness and predictability in decisions taken by the authorities. 33 % of the business-people interviewed mentioned cases of biased decisions favouring some companies and hampering others. Likewise, 26 % criticised that it was al-most impossible to anticipate the decisions of the administration.

These results are supported by other reports (e.g. Boye et al. 2006, 9–10) as well as by the statements of the experts and civil servants who were in-terviewed. Civil servants, for example admitted that the official rules for their tasks were very unclear, that procedures in their department took too much time and were too complicated for investors, and that many officials made decisions on the basis of personal preference (see Annexes B and C).

Figure 6: Problems faced by businesspeople in interactions with the state

Source: Data from Table A4 in Annex A

Causes of problems

For the most part, the businesspeople interviewed explained their difficul-ties in interactions with the state by naming four factors: (i) regulatory de-ficiencies, (ii) insufficient training of civil servants, (iii) deficits in the or-ganisation of work in the public sector, and (iv) discretionary decisions on the basis of wasta (see Figure 7). These factors were confirmed in general by Boye et al. (2006, 6–10) as well as by the results of our standardised survey among 180 civil servants. The latter added however a further ex-planation: According to them, businesspeople are not well informed about the procedures and rules of the public administration (see Figure 8).

Regulatory deficiencies: 17 % of the civil servants said that the procedures in the public administration required simplification. Likewise, 40 % of the businesspeople complained of overregulation or inadequate regulation as major reasons for the problems prevailing in Jordan in state business rela-tions. Many said, for example, that investors must go through too many procedures in different public institutions before they can start a new busi-ness. A report by the Anti-corruption Directorate in the General Intelli-gence Department found that bureaucratic regulations drive businesses away because of the “obscurity in some regulations which handicap trans-parency“ (Kassay 1998, 57).

Figure 7: Explanations of businesspeople for their problems in interactions with the state

Source: Data in Table A4 in Annex A

Figure 8: Suggestions of public sector employees on how to improve state-business relations

Source: Data in Table B6 in Annex B

9 % of the businesspeople, however, said that there was too little regula-tion in Jordan. Some wanted more rigorous rules in licensing to limit the degree of competition in their respective markets, while others believed that better standards were needed to protect consumers, the environment, and high-quality producers (see also Table B2 in Annex B).

Training of public sector employees: The low level of qualification and motivation among public sector employees was mentioned by 40 % of the businesspeople as a main reason for their problems in interactions with the state. At the same time, 27 % of the civil servants admitted themselves that they were in need of better training and that the recruitment procedures of the public administration had to be improved.

Organisation of work within the public administration: 19 % of the civil servants had additional proposals regarding more efficient public admini-stration in Jordan: They complained of the concentration of decision-making power at higher levels of the hierarchy (9 %), insufficient comput-erisation (5 %), duplication of responsibilities among different public insti-tutions (2 %) and over-staffing in the public sector (3 %). Likewise, 8 % of the businesspeople interviewed explained their problems with the bureau-cracy at least partly by over-staffing in the public sector, and 9 %

respec-tively by the concentration of decision-making power in the hands of a few and the lack of communication within the public administration.

Discretionary decisions on the basis of personnel preferences: A fourth group of explanations referred to favouritism in state-business relations.

39 % of the interviewed businesspeople complained about decisions taken by public sector employees on the basis of personal preferences rather than rules (see Figure 7). This view is supported by four studies conducted by the Centre for Strategic Studies (CSS 2002a; CSS 2002b; CSS 2002c; CSS 2002d) among clients of selected public sector institutions. For instance, more than 30% of the persons interviewed in one study said that nepotism is very widespread within the customs administration (CSS 2002d, 24).

Our standardised survey of civil servants provided additional evidence for these complaints. 13 % of the respondents admitted that something had to be done to make sure that customers of their department are treated more equally. 17 % claimed that public sector employees in Jordan should fol-low the rules better, and 21 % believed that more and better incentives are needed for civil servants to do their work properly (see Figure 8)

The problem is that many of the rules governing state-business relations in Jordan lack clarity and full implementation. In the customs area, for ex-ample, “tariff assessment practices are frequently arbitrary and may even differ from written regulation” (Kanaan and Kardoosh 2005, 8). As a con-sequence, the rule of law is undermined: Civil servants have discretionary power to provide preferential treatment to friends and tribesmen.

Customer information: In addition to explanations given by businesspeo-ple, the civil servants surveyed mentioned a lack of information among their customers as another reason for problems in state-business relations in Jordan. 13 % said that the rules in effect for procedures in the public sector should be explained to businesspeople better.