Caribbean Future ForumUniversity of the West Indies

5th-7th May, 2015

IMPLEMENTATION DEFICIT: WHY MEMBER STATES DO NOT COMPLY WITH CARICOM DIRECTIVES

BY

Paul C. Clement, Ph.D.FIT, State University of New York (SUNY)

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INTRODUCTION

• CARICOM is at a crossroad.

• Regional integration in the Caribbean is not advancing because of external factors?

• This paper argues that CARICOM has failed to deepen effectively its integration process due to obstacles at the national level.

• The paper traces the progress of CARICOM states in implementing regional directives, while analyzing internal economic and political conditions to explain observed patterns.

• The paper identifies national priorities among member governments and domestic constitutional arrangements as key obstacles to CARICOM integration.

• The paper concludes that for the future of Caribbean integration:

• domestic factors that influence a country’s ability to implement regional decisions should be considered.

• National priorities among member governments and domestic constitutional arrangements are two of these factors.

 

Paul C. Clement, Ph.D. FIT, State University of New York.

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INTRODUCTION: THE GOAL

• Thirteen Heads of Government signed the Grand Anse Declaration in July 1989 with the goal of establishing a Caribbean Single Market and Economy (CSME) by July 4, 1993.

• More than two decades after, the CSME is still not a reality. As a result, it is increasingly common for politicians and scholars to claim that CARICOM is facing a serious “implementation deficit.”

• What explains the failure of member states to comply with CARICOM’s directives?

Paul C. Clement, Ph.D. FIT, State University of New York

Where are we going?

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ANALYTICAL FRAMEWORK

Analytical Questions

• Questions: • Is there a CSME implementation deficit?• What is the CSME’s implementation

deficit?• What explains the failure of member

states to comply with CARICOM’s directives?

• Measurement: • Compliance - Directives Implemented/

Total Required Directives• Non-Compliance - Directives Not

Implemented/ Total Required

Directives.

• Why measure implementation rates over time?

• Compare compliance rates by categories and across countries

• Compare speed of implementation and transparency of the issues that the directives involve.

Analytical Process

Is there a CSME

implementation deficit?

What is the

implementation

deficit?

Why member states do

not comply?

Paul C. Clement, Ph.D. FIT, State University of New York

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EXPLAINING THE CSME IMPLEMENTATION PROCESS

• Implementing the CSME:

• Removal of restrictions and arranging for the rights envisioned in the RTC enforceable.

• Agenda proposals from all members of the CARICOM HOG Conference.

• Unanimous approval needed at HOG Conference.

• HOG has no supranational powers.

• Member states implement or reject.

• Problem: Lack of supranationality.

Paul C. Clement, Ph.D. FIT, State University of New York

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SUMMARY OF THE CSME IMPLEMENTATION RECORD

• Overall Degree of Compliance:

• The number of directives implemented to date as a proportion of the total number of directives that needs to be carried out by all member states.

• Overall level of compliance in 2004=39%.

• Overall level of compliance in 2005=38%.

• Overall level of compliance in 2006=36%.

• Overall level of compliance in 2007=38%.

• Overall Degree of Non-Compliance (Implementation Deficit):

• The number of directives not implemented to date as a proportion of the total number of directives that needs to be carried out by all member states.

• Overall level of compliance in 2004=61%.

• Overall level of compliance in 2005=62%.

• Overall level of compliance in 2006=64%.

• Overall level of compliance in 2007=62%.

Paul C. Clement, Ph.D. FIT, State University of New York

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EXPLAINING CSME POLICY IMPLEMENTATION RATES: MISMATCH

• Mismatch:

• Mismatch between CARICOM’s ambitious implementation schedule of directives and the low levels of compliance.

• In 2004 936 directives were scheduled to be implemented and only 369 were actually implemented.

• In 2005 948 directives were scheduled to be implemented and only 361 were actually implemented.

• Influence of domestic factors on the implementation of CSME policies.

• The logic of electoral politics: A positive correlation between CARICOM treaties and general electoral cycles.

Paul C. Clement, Ph.D. FIT, State University of New York

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EXPLAINING CSME POLICY IMPLEMENTATION RATES: THE PUZZLE

• There is little variation in the MDCs and LDCs implementation rates.

• Despite sound theoretical basis for expecting the four MDC’s to have much higher implementation rates than the LDCs.

• This observation poses a puzzle that provides insight into the role of domestic political and economic arrangements in the Caribbean.

• Lack of a supranationality:• Domestic Constitutional Obstacles:

• Two thirds majority vote• Westminster adversarial politics

Paul C. Clement, Ph.D. FIT, State University of New York

Antigua

Barbad

osBeli

ze

Dominica

Grenad

a

Guyana

Jamaic

a

St.Kitts

St. Lu

cia

St. Vincen

t

Surin

ame

Trinidad

0

10

20

30

40

50

60

2004200520062007

Member State%

dire

ctive

s im

plem

ente

d

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EXPLAINING CSME POLICY IMPLEMENTATION RATES: NATIONAL PRIORITIES

• National priorities among member governments.

• Economic development is the central political question.

• Politicians discount the future because of the logic of electoral politics.

• Cost of integration is higher than the benefits.

• More transparent directives = higher implementation rates

• Solution: T&T as an institutional leader and regional paymaster

Paul C. Clement, Ph.D. FIT, State University of New York

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THE REVISED TREATY: THE LEGAL AND INSTITUTIONAL INFRASTRUCTURE

• Treaty Revision

• National Administration

• Enforcement and Regulation • Original Court• Appellate Court

• National Competition Authorities

Paul C. Clement, Ph.D. FIT, State University of New York

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THE REVISED TREATY: THE SINGLE MARKET

• Free Movement of Goods

• Free Movement of services

• Free Movement of persons

• The Facilitation of travel

• Capital market integration

• Right of establishment

Paul C. Clement, Ph.D. FIT, State University of New York

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THE REVISED TREATY: THE SINGLE ECONOMY

• Outlier: Single Economy

• Common external policy

• Harmonization of laws

• Sectoral program & enabling environment

• Common support measures

Paul C. Clement, Ph.D. FIT, State University of New York

Legal/Institu-tional

Single Market Single Economy

0

10

20

30

40

50

60

70

80

90

100

2004200520062007

Category

% d

irecti

ves im

ple

mente

d

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THE REVISED TREATY: THE SINGLE ECONOMY CHALLENGES

• Overlapping membership:• Fiscal Policy• Monetary policy

• Harmonization of laws:• Fiscal Policy• Monetary Policy

• Transparency of Directives

• Solution:• Regional paymaster• Perfect implementation on the

CSM. (Use success as leverage for CSE)

Paul C. Clement, Ph.D. FIT, State University of New York

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CONCLUSION

• Implementation Deficit

• National priorities

• Constitutional arrangements

• Implementation mismatch: logic of electoral politics

• Transparency of directives: speed of implementation

Paul C. Clement, Ph.D. FIT, State University of New York.

- Implementation Deficit- National Priorities- Constitutional arrangements

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RECOMMENDATIONS

• CARICOM adopt a partial integration approach

• Focusing exclusively on completing the CARICOM Single Market

• Demonstrated success in the CSM could serve as leverage to implement the CSE

• Trinidad and Tobago assume the position of institutional leader and regional paymaster to ease distributional tensions

• CARICOM strengthen the ACCP – opposition parties and civil society in order to assure more efficient implementation.

• Early consultation and involvement in the negotiation process by parties who will implement agreements reduces uncertainty and assures more efficient implementation.

Paul C. Clement, Ph.D. FIT, State University of New York

CARICOM Single Market This Way Only

Paul C. Clement, Ph.D.

Thank You!

Paul C. Clement, Ph.D. FIT, State University of New York 16