In Myanmar, even before the current political crisis, it was difficult for local government leaders to evaluate the impact of their governance decisions or compare business performance across regions. For officials in lower-performing areas, this evaluation gap left them with little guidance on where and how to implement change and few incentives to do better. In 2018, Edmund Malesky (working with the Asia Foundation and UKAID) created the Myanmar Business Environment Index, surveying 4,874 businesses in the service and manufacturing industries and gathering other hard data to create a ranking. The MBEI measures key aspects of state, regional, and township business environments and shares its findings with local, public decision-makers.
The results of the MBEI were published in 2019 and shared with both government officials and the private sector in Myanmar. This two-year study analyzed data collected from 4,874 Myanmar businesses to identify challenges that these businesses faced and potential reforms. Findings like these can help local leaders make better decisions and prioritize initiatives most likely to improve economic well-being and growth in their regions.
Methods and Results
Between 2018 and 2020, the MBEI reported improvements in land access, transparency, environmental compliance, and labor recruitment across Myanmar, which led to increased employment growth. Unfortunately, the MBEI reports from 2018 and 2020 also identified significant areas of concern, and it is these concerns that the military used to justify its coup. In 2020, only 26.2% of businesses believed the security situation was good, only 26.5% believed they could appeal an unjust decision to a higher government office, and though petty corruption was not a concern, grand corruption (organized corruption at the highest levels of government, often leading to grave human rights violations) was a very serious concern.
The Myanmar Business Environment Index (MBEI) is one of a growing class of tools known as EGIs (economic governance indexes). They capture variation in business environments on the regional, state, and township level and create competition between local leaders to improve the quality of their business environments. The rankings are built by surveying private businesses, including small and medium-sized enterprises, and measure categories such as the entry costs for new businesses and the ease of access to land and secure business properties. By identifying key variables, these indexes can be critical in helping leaders know where to encourage change—down to the level of which local offices need expanded capacity. They give feedback over time and encourage leaders to compare the effectiveness of their actions to those of other leaders.
Subnational performance assessments (SPAs) like the MBEI can be greatly improved by working with bureaucrats to improve how they use these tools and increase collaboration. In 2020, workshops were conducted in 20 randomly assigned townships, bringing together officials from multiple government agencies and introducing them to the results of the MBEI. Compared to the control group, the growth rate for business environment improvement was twice as high in townships where officials received training.
Edmund Malesky (Duke Center for International Development), Dean Dulay (Singapore Management University), Ville Peltovuori (The Asia Foundation)
Economic Governance, Governance, Corruption, Economic Development, eGovernance, Myanmar, Southeast Asia