Restoring Confidence

To restore confidence, governments need to have signals, realistic plans and commitment mechanisms to enforce these plans. The signals are important for the market and to create inclusive enough coalitions. Here, Dr Newfarmer gave the example of South Africa where Nelson Mandela managed to bring together a big enough coalition before the 1994 election. Another signal that government’s can send is through credible ministerial appointments. In terms of realistic plans, “best fit” programs that may fall short of “best practices” but are actionable in a country’s political context and improve policy.  These create space for future changes towards best practices.  “Commitment mechanisms” – promises overseen by external constituencies — are important to provide a larger signal that the government is transparently accountable. Some post conflict governments, such as the case in Timor Leste, implemented a dual key budgeting system or have independent executing agencies, such as was the case with customs in Kosovo for a brief period.