Ease of doing business

Early in my career as a lawyer, I’ve had foreigner clients who complain about the bureaucratic red tape or the long processing time of documents in government offices. I used to say that the long process may be necessary to control rampant corruption or could be a sign of corruption itself.

But then really, red tape is also a result of a mechanism of overreaction to anything that went or could go wrong in the process.

In a study entitled “Public Policy and the Origins of Bureaucratic Red Tape” by Barry Bozeman and Derrick Anderson of Arizona State University, overcompliance, misplaced precision, and overcontrol were identified as causes of red tape.

In most instances, citizens complain about red tape. For policy makers and bureaucrats, however, it is actually difficult to judge when the procedures they have laid down have become red tape. The fact is that avoiding red tape in government is a delicate balance between ensuring compliance with set standards and laying down concise yet precise rules.

It is in this light that the new Ease of Doing Business Act of 2018 or Republic Act 11032 may be viewed. The law was recently signed by President Rodrigo Duterte who has made it his priority to “solve the perennial problem of bureaucratic red tape in our government institutions.”

In a speech delivered shortly after his election, Duterte had graphically described the long lines of people applying for passports in Davao City with many of them sleeping on the pavement outside a mall where the office of the Department of Foreign Affairs is located.

A scenario like this is what RA 11032 aims to prevent. According to reports, one important feature of the law is that it standardizes the processing time for government transactions; three days for simple transactions, seven days for complex ones, and 20 days for highly technical transactions.

The law also limits the number of signatories required in applications for licenses, clearances, permits, certifications, and authorizations to a maximum of three officials. These are already good indicators that the law is serious in curbing the perennial problem of government red tape.

But what I welcome the most are the provisions that promote a zero-contact policy and mandate automation of business permit and licensing systems. These are the key systems that have been proven to minimize opportunities for corruption.

Integrating online mechanisms in daily transactions, Duterte said, will not only bring people closer to their government but also forge a vibrant and productive relationship with government that will redound to their benefit.

I definitely look forward to the day that applying for renewal of driver’s license can just be done online after an email reminder that one’s driver’s license is about to expire. But such a process could even raise several questions. How do regulators ensure that renewal applicants do not suffer from any medical condition that impairs their driving skills? Will a simple declaration in the application forms of applicants belonging to a certain “healthy age range” do?

There are countries that require a simple declaration. But these are also countries with stricter perjury laws that are consistently enforced or have penalties for misdeclarations that are extremely prohibitive.

Indeed, in a country like ours that is beset by persistent corruption and a culture of “palusot,” curbing red tape could require more than just laws mandating automation, limiting signatories, and standardizing processing time. The ugly side of ease of doing business could be ease of doing monkey business, and the latter is what regulators must also control.

But reacting alone to a crisis, problem, or corruption has over the years resulted in the piling up of regulations which have been the cause of red tape in government. We usually lay down tougher rules and add more layers to regulations, making it more difficult for honest people to do business.

One key, I think, in achieving balance is by aiming for precision in proactively laying down the rules. That will require a lot of common sense and the application of the principles of iterative design –that cyclic process of testing, analyzing, and refining the bureaucratic process until we achieve the precise set of rules.