Step 2: Using criteria to prioritize issues

Setting criteria for prioritizing the EO's agenda is a way of making choices more explicit. It also helps to distinguish between reforms that are most practical and achievable, and those that are the most necessary or strategic.

Often policy initiatives are set by EOs without a clear recognition of the trade-offs or relative weight applied to certain criteria. The decision to choose a particular area for advocacy focus can easily be a 'knee-jerk' reaction to some political or economic crisis.

EOs need to think about the many different kinds of criteria that can be used to set a reform agenda and to consider the relative merits of each.

An assessment of the business environment will create a list of possible changes that can be made to the environment to make it more enabling for sustainable enterprises. The EO will have, through its research and surveys, identified the key areas its members want action on. Focus groups will have helped narrow the ideas further.

However, the 'action list' for the EO may still be long, complex, or both. It may entail dealing with different players (e.g., government ministries, the judicial courts) and different levels (e.g., the need for policy and legal reform, regulatory reform, or administrative reform). Thus, there is a need to determine where exactly to start first. Which reforms are the most pressing, the most needed, and the most important?

There is a range of possible criteria for prioritizing reform agendas. The choice of criteria used in this process will affect the priorities for reform that are chosen, as different criteria produce different outcomes and different priorities for action.

Possible criteria for prioritizing a reform agenda
  • Maximum impact: which reforms will create the greatest impact on the development of sustainable enterprises?
  • Immediate impact: which reforms will create an impact on the development of sustainable enterprises in the next 12 months?
  • Limited resources: which reforms can be done without much money?
  • Leverage: which reforms will lever or mobilize support from other stakeholders?
  • Catalyst for change: which reforms will ignite positive change in other sectors of the economy?
  • Small business perspective: which reforms will most likely improve the business environment in the eyes of the small businessperson?
  • Employment: which reforms will have a positive impact on the role of the private sector in creating more jobs?
  • Poverty reduction: which reforms will have the most impact on the reduction of poverty?
  • Competitiveness: which reforms will make the sustainable enterprises more competitive?
  • Knowledge: which reforms will help us better understand the needs, challenges and opportunities facing sustainable enterprises?

2.1 Selecting the right criteria

The choice of criteria will affect the selection of priorities for reform: what are the 'right criteria'?

In most cases, the selection of criteria is not about right or wrong, the main concern is to make the criteria which are used explicit, to ensure everyone understands why certain criteria are used and others are not.

  • Each criterion has its strengths and weaknesses, it is not about which is right and which is wrong.
  • Choosing which criterion to use will often be a trade-off between completing values and interests.
  • To balance this trade-off, it may be useful to apply two or three criteria.

The assessment of the business environment carried out by the EO will produce a list of issues that the EO will then refine and narrow further. Each of these concerns can be addressed by a recommended action. The chart below is an illustration of this.

Assessment FindingsRecommended Actions
Policy and legal issues
  • State-owned enterprises have an unfair advantage over small, private enterprises
  • No uniform official definition of micro and small enterprises
  • There is no recognition of the special problems faced by women business owner-managers
  • Removal of policies that favour State-owned enterprises over small, private enterprises
  • Establish a uniform government definition for the micro and small enterprise sector
  • Undertake an assessment of the special issues faced by women business owners/managers
Regulatory issues
  • Labour laws and regulations contain too much red tape and are difficult for small enterprises to comply with
  • Small enterprises are required to register with too many different agencies using different reporting cycles
  • Establish a review taskforce to find ways to simply labour laws and regulations
  • Establish a one-stop shop for all small business registrations
Administrative issues
  • Government agencies are highly centralized, making it difficult for small enterprises in rural areas to comply
  • Government policies, laws and regulations are not produced in vernacular languages
  • Decentralize government administrative arrangements for small business
  • Ensure all government policies, laws and regulations are available in the vernacular

Creating a chart such as the one above is the first step in the synthesis of the findings of the assessment of the business environment. It shows the problems and concerns, as well as how these might be addressed.

The second step is to decide on which Recommended Actions should be taken, i.e., to decide on which Recommended Actions have priority, this is done by using selection criteria.

2.2 Selecting actions for reform

There are two steps to perform when selecting which Recommended Actions should be taken: the first is to choose the selection criteria, the second step is to score each Recommended Action according to the criteria.

As discussed earlier, there are many different criteria that can be used, each with its own values and interests; try to choose no more than three criteria. For example:

Criterion 1: Maximum impact: which reforms will create the greatest impact on the development of sustainable enterprises?

Criterion 2: Immediate impact: which reforms will create an impact on the development of sustainable enterprises in the next 12 months?

Criterion 3: Limited resources: which reforms can be done without much money?

The chart below shows how these criteria can be used to assess each recommended action.

Sample criteria assessment chart

Recommended ActionsCriterion 1

Score
(1 –10)
Criterion 2

Score
(1 –10)
Criterion 3

Score
(1 –10)
Total


Score (1–30)
Removal of policies that favour State-owned enterprises over small private enterprises 9 6 10 25
Establish a uniform government definition for the micro and small enterprise sector 7 6 9 22
Undertake an assessment of the special issues faced by women business owners/managers 7 8 8 23
Establish a review taskforce to find ways to simplify labour laws and regulations 8 9 5 22
Establish a one-stop shop for all small business registrations 9 6 5 20
Decentralize government administrative arrangements for small business 10 4 3 17
Ensure all government policies, laws and regulations are available in the vernacular 10 7 7 24

 

The sample chart above illustrates how the three criteria chosen as an example can be used together to determine where the priorities for reform lie. In this particular case, it is clear that the top three priorities are:

  1. Removal of policies that favour State-owned enterprises over small private enterprises.
  2. Ensure all government policies, laws and regulations are available in the vernacular.
  3. Undertake an assessment of the special issues faced by women business owners/managers.