What reform needs now is...psychology

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Cimg1651_tightOne of my colleagues, Alejandro Alvarez de la Campa, joined me on a recent trip to Vietnam. (See my Hanoi blog posts: 1, 2, 3.)  He came away with a different take on business environment reforms - the psychological dimension. Alejandro's words and photos follow:

Vietnam is an example of how countries should approach the future. Forgetting about history (at least about the bad things in history) and thinking forward. I asked a Vietnamese friend and colleague what young people in her country think about the past, and what are their hopes and aspirations for the future. She said, "We don't care about the past, we just want to become rich. We will work hard to achieve this and we will change our mentality, if necessary, to achieve it." This is a pretty important statement considering that around 65% of the population in Vietnam is under 30 years of age. I could see that statistic clearly - walking through the streets of Hanoi gives you a sense of how vibrant and dynamic this country is.

As Christine posted earlier, a group of World Bank Group staff and other donors gathered in Hanoi recently to discuss the latest trends in business environment reform around the globe. Many important reforms are taking place in different countries. We are slowly getting there - in terms of knowing what works and what does not. We could be better at sharing this information among ourselves and with the rest of the world, although we are improving in this as well. So what is it that makes our work so frustrating at times? Why are we achieving different results in different countries, despite using similarly skilled people and the same best practices and techniques?

At the end of the day, it is the mentality of our government clients that matter. It is their willingness to reform and their interest in facilitating private sector development that make the difference. We just give them the tools. We have to put more emphasis on why they should change their mentality and adopt the "Vietnam approach". But we are not psychologists - we are economists, lawyers, bankers, investors, bureaucrats, you name it, but not psychologists.

The Doing Business report is achieving a lot of success in this psychological dimension. Reminding someone every year that they are worse than their neighbors has to impact their thinking. We are right to improve the business environment – my Vietnamese friend would agree that a better business environment means that more people can become richer. But we need to go further and address the psychological dimension of reform as well.




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