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# **Box 5. Monitoring and evaluation helping to build trust in Latvia**

In 1999, early in the process of EU accession, the new government of Latvia identified removing administrative barriers to investment as a priority for reform. It made inspections reform a critical part of this, prompted by complaints from business about burdensome, arbitrary, and harassing behavior by government inspectors. The government issued a new “instruction” aimed at improving transparency and accountability in all inspectorates, created an Inspections Coordination Council, and initiated training in a new “client orientation” for inspectors.

In 2001 the government was eager to evaluate its reform program. Earlier, progress had been assessed through focus groups and anecdotal evidence. Now the government wanted a stronger statistical basis to monitor progress and to determine which reforms were working as intended and which were off-track and in need of a new strategy. Supported by the Foreign Investment Advisory Service (FIAS), it carried out a self-assessment of progress. The evaluation used templates to gather official information about administrative procedures, a business survey to collect information about experiences with such procedures, and public-private dialogue to discuss the implications of the data and to use the data to guide revisions to the program.

The 2001 survey confirmed that inspections were no longer a serious problem for businesses. It also made it possible to establish a baseline, using hard data about the frequency and duration of inspections, the incidence of bribery, and the perceived quality of each inspectorate. To take the gains further, the government used the data from the templates to fine-tune the reform strategy.

A second survey, in 2003, documented a solid reduction in the inspections burden. The frequency and duration of inspections had declined, and the perceived quality of most inspections had improved. Interestingly, the survey results showed a significant difference between national-level inspectorates (fire, worker safety, sanitary), which had participated in the reform program with clear signs of improvement, and municipal-level inspectorates (construction, municipal police), which had not participated and showed no improvement.

In 2005 the government requested FIAS support for a third survey, including assistance to make the effort fully local. Local survey firms had been used since the beginning, but there was concern that a government-sponsored survey would not be credible with the business community. A task force was organized to oversee the survey, with representatives from business, academia, civil society, and the government. FIAS provided basic training in sample design, quality control, and safeguards to protect the anonymity of respondents. While the data from the 2005 survey have not yet been fully analyzed, the participants, including key stakeholders from both the public and the private sector, are pleased to have a mechanism that both sides can trust to monitor the impact of ongoing reforms.

_<u>Source:</u>_ FIAS 2006.

Elsewhere systematic monitoring was absent, was poorly enforced, or ultimately bore little relation to the objectives of the reform. Even the United Kingdom had little systematic evaluation of outcomes. Instead, monitoring was largely left to outsiders such as the OECD and to academics (FIAS 2005d, p. 22). In Hungary the scope and breadth of reforms combined with a lack of administrative and analytical capacity undermined evaluation. And strong opposition from ministries made the process even more difficult