TRADE, INVESTMENT AND COMPETITIVENESS TRADE, INVESTMENT AND COMPETITIVENESS EQUITABLE GROWTH, FINANCE & INSTITUTIONS INSIGHT Investment Promotion Agency Advocacy for Investment Climate Reform: Good Practice Principles and Case Studies Carlos Griffin and Zenia A. Rogatschnig © 2022 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Photo credits: Shutterstock.com >>> Abbreviations CINDE Coalición Costarricense de Iniciativas de Desarrollo EIC Ethiopian Investment Commission FAO Food and Agriculture Organization FTZ Free Trade Zone GMA Greater Metropolitan Area IFC International Finance Corporation IPA Investment Promotion Agency ITC International Trade Centre OECD Organisation for Economic Co-operation and Development PPD Public-Private Dialogue SSR State Startup Ranking TG Toronto Global TRBOT Toronto Region Board of Trade UNCTAD United Nations Conference on Trade and Development USAID United States Agency for International Development WAIPA World Association of Investment Promotion Agencies >>> Acknowledgments Carlos Griffin is an Investment Promotion Specialist with the Global Investment Climate (IC) Unit of the Equitable Growth, Finance, and Institutions (EFI) Global Practice of the World Bank. Zenia A. Rogatschnig is an Investment Policy and Promotion Specialist with the IC Unit. The note was prepared under the guidance of Armando Heilbron, Investment Promotion Workstream Leader in the IC Unit, with the support and input of Asya Akhlaque, Practice Manager, Ivan Nimac, Global Lead for Investment Policy and Promotion and David Bridgman, Sr. Advisor, all within the IC unit. The authors would like to thank World Bank peer reviewers Soujanya Chodavarapu, Senior Private Sector Specialist, and Alejandro Espinosa-Wang, Senior Private Sector Specialist, for their advice and valuable comments. A particular thanks goes to the senior investment promotion executives in the investment promotion agencies (IPAs) featured in this note that reviewed and provided approval for the inclusion of their good practice case studies, including the Ethiopia Investment Commission, Toronto Global, Invest India, and CINDE (the IPA of Costa Rica). The team is also grateful for review of the country case studies by relevant regional colleagues, including Fantu Farris Mulleta and Berkessa Geleta, of the International Finance Corporation (IFC). This note and the case studies it includes were made possible thanks to the collaboration between the World Association of Investment Promotion Agencies (WAIPA) and the World Bank Group, which designed the competition and produced the 2021 Awards for Strengthening IPA Advocacy Services. The authors would like to thank the joint team that led the competition, and Ahmed Omic in particular for having been part of the joint WAIPA-World Bank team which worked on the 2021 Awards, and for making the submissions available to the authors with the permission of the IPAs involved. Lastly, thanks to Nick Younes for editing support and Bruna Sofia Simoes for design and production services. This publication was made possible through the financial support of the United Kingdom’s Foreign, Commonwealth and Development Office. >>> Contents Abbreviations Acknowledgements Executive summary 1 1. Introduction 2 2. Key principles and a systematic process for effective advocacy 4 2.1 Key principles underlying effective advocacy 4 2.2 Issue identification 6 2.3 Solution formulation 9 2.4 Advocating adoption and implementation 10 3. Illustrative cases from the 2021 Awards for Strengthening IPA 13 Advocacy Services 3.1 Ethiopian Investment Commission: Unlocking new sectors for FDI 14 3.2 Toronto Global: Leveraging a pre-existing mechanism for 16 collaborative advocacy to reboot a regional economy 3.3 Invest India: Advocacy to support the scaling of an innovation and 20 start-up ecosystem 3.4 CINDE: Rapid-response advocacy to support economic growth in 23 the face of COVID-19 Conclusion and policy recommendations 26 References 27 >>> Executive Summary Investment promotion agencies (IPAs) use advocacy services to help their countries improve the quantity and quality of Foreign Direct Investment (FDI) they can attract, retain, and grow in the future. Successful IPA advocacy persuades governments to use targeted public reforms, expenditures, services, and convening power to attract, retain, and expand FDI in greater quantities and with higher positive development impact. This instructive note aims to present IPAs and their governments with insights on conducting advocacy effectively by providing an overview of key principles for advocacy and defining the systematic process involved in IPA advocacy services. The three steps in this process are 1) issue identification, 2) solution formulation, and 3) advocating reform adoption and implementation. This note also provides four illustrative case studies of IPAs that successfully advocated key investment climate enhancing reforms, using information collected from among the winners and other distinguished entrants of the 2021 Awards for Strengthening IPA Advocacy Services, jointly held by the World Bank Group (WBG) and the World Association of Investment Promotion Agencies. Each illustrative case study is structured to showcase the manner in which the IPA undertook these three steps. The first three are examples of proactive advocacy driven by the strategic objective of attracting new FDI to sectors believed to be competitive but underperforming. The Ethiopian Investment Commission (EIC) found it could immediately unlock new sectors with a single, high-level reform. Toronto Global used institutionalized, high-level dialogue to facilitate a broad reimagining of its economic future. And the Indian national IPA found a way to motivate most of the country’s subnational governments to reform themselves in support of start-ups. The fourth case, that of Costa Rica’s CINDE, is an example of responsive advocacy, whereby the IPA’s standing mechanisms for investor issue intake led to a regulatory reform during the COVID-19 pandemic, which allowed established investors to quickly shift to remote work. While the three steps of issue identification, solution formulation, and advocacy can be seen in each case, their cases differ substantially in terms of the IPAs’ objectives, their starting circumstances, and how these differences led each IPA to a unique solution offering both high impact to, and importance for its location. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 1 1. >>> Introduction The World Bank Group’s (WBG’s) Comprehensive Investor Services Framework outlines four categories of investment promotion services: marketing, information, assistance, and advocacy.1 The first three are investor-facing services, equivalent to the salesmanship and customer service that private firms use to win, facilitate, and retain business. IPAs use these services to market their locations, making investors aware of a given location’s superiority over alternative locales for particular sectors and business functions. Imbued with an IPA’s local knowledge and connections, the services also make it easier for investors to navigate start-up and operations in the unfamiliar settings that often confront foreign investment. WBG found that around 90 percent of responding multinational companies considered at least one IPA service to be important or critically important, and that a given IPA’s role in improving the business environment (what we refer to as advocacy) was the most-valued IPA service.2 Marketing, information, and assistance help to promote a location as it is, but a location’s particular advantages and disadvantages presently limit the types and numbers of FDI projects that it can attract, retain, and grow. Advocacy, on the other hand, is the means by which IPAs help their countries to improve the quantity and quality of FDI they hope to attract, retain, and grow in the future. At its best, advocacy persuades officials to take actions likely to create new potential for the two high-level IPA objectives of: 1. Better retention and expansion of existing investors for whom new or unexpected obstacles threaten continued operations or the ability to grow; and 2. Attraction of new investors and better kinds of investment than the current investment ecosystem can entice or sustain—as not all forms of FDI contribute equally to growth and transformation with large differences in impacts across sectors3 —as well as attracting and enabling FDI in sustainable sectors, a key development priority for many countries. In addition to investment climate reform, successful advocacy has the added benefit of strengthening the IPA’s other services. Its well-connected advocates are better positioned to secure information and assistance from partners and are themselves a selling point that markets 1. Heilbron, Armando, and Yago Aranda-Larrey. 2020. Strengthening Service Delivery of Investment Promotion Agencies: The Comprehensive Investor Services Framework. Finance, Competitiveness and Innovation in Focus. Washington, DC: World Bank. doi: 10.1596/33498 2. Heilbron, Armando, and Hania Kronfol. 2020. “Increasing the Development Impact of Investment Promotion Agencies.” Global Investment Competitiveness Report 2019/2020. Washington, DC: World Bank. doi: 10.1596/978-1-4648-1536-2_ch5 3. Alfaro, Laura, and Andrew Charlton. 2007. “Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?” SSRN Electronic Journal. doi: 10.2139/ssrn.981163 EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 2 the location. The term investment ecosystem refers to all local Many laws establishing national IPAs include the task of characteristics that affect the ease, or difficulty, of conducting advising the government on how to improve the investment business in a given locale. Such characteristics include: ecosystem among the IPAs’ assigned functions. This demonstrates governments’ appreciation of and need • Macroeconomic factors like political and economic for investor-friendly perspectives that support continual stability and risks, economic growth, exchanges rates, improvement in the quest for more and better FDI. Investors, inflation, tax rates, and openness to FDI and trade. too, highly value investment ecosystem advocacy. WBG’s • Market-related factors, such as the size and growth rates 2019 Global Investment Competitiveness Survey reports that of the consumer market and the sectoral composition of investors consider advocacy to be the most important service activities in the market. offered by IPAs.4 • Laws, regulations, and their public administration with respect to companies, banking and finance, IPAs advocate on behalf of investors. This advocacy is informed private investment, contracts, commerce, real estate, by the pressures faced by investors and as such, IPAs provide construction, labor and immigration, international trade, a service to them at large. However, unlike an IPA’s other and taxes, among others. services, its advocacy is government-facing. Advocacy is • Infrastructure, which is provided by government, the often complicated by the involvement of multiple stakeholders private sector, or some combination of the two and which with varied interests and levels of commitment. Advocacy can is dependent on public policy, expenditure, services, also become politically charged, as it often involves difficult administration, and regulation. This includes power, reforms or controversial expenditures. As such, it requires water, waste, telecommunications, and transportation a skill set very different from those demanded by other IPA and logistics. services. This can be even more challenging for IPAs that have • Availability and quality of productive inputs and enabling mixed regulatory-promotional mandates, as this places them services, such as those related to land, workforce, in the incompatible, dual role of regulating investors while also suppliers, and innovation and technology. Even though championing their investment.5 Consequently, many IPAs most of these factors are privately provided, all can may struggle in their capacity as advocates. According to the benefit from an array of government support, for example, WAIPA 2019 survey of IPAs, 35 percent of those surveyed through the creation of special economic zones, workforce recognize that they fail to engage in advocacy.6 education programs, SME development services, and funding for research. For these reasons, this note aims to present IPAs and their • Scale, scope, quality, and overall ambition of public- governments with insights into effective advocacy. Section 2 private collaboration and coordination on these points. presents key principles for effective advocacy and describes a simple but systematic process for its execution. Section Successful IPA advocacy persuades governments to use 3 illustrates the implementation of this process with several targeted public reforms, expenditures, services, and convening case studies. These case studies have been selected from power to attract, retain, and expand FDI in greater quantities among the winners and other distinguished entrants of the and with higher positive development impact. In this way, a 2021 Awards for Strengthening IPA Advocacy Services, jointly good advocate is both a champion of investors and of national held by the WBG and the WAIPA. development objectives, bridging a public-private gap in a way that is valuable to both sides. 4. Heilbron and Kronfol (2020) 5. Whyte, Robert, Celia Ortega Sotes, and Carlos Roberto Griffin. 2011. Investment Regulation and Promotion: Can They Coexist in One Body? Investment Climate In Practice. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/832851474483734837/Investment-regulation-and-promotion-can-they-coexist-in- one-body 6. WAIPA. 2019. Overview of Investment Promotion: Report of the Findings from the WAIPA Annual Survey of 2018. Geneva: WAIPA. https://waipa.org/waipa-content/ uploads/Overview-of-Investment-Promotion-2019.pdf EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 3 2. >>> Key principles and a systematic process for effective advocacy 2.1 Key principles underlying effective advocacy To be maximally effective, advocacy should be strategic, systematic, and held accountable. The operations of any public IPA should be guided by a strategy to generate positive development impacts through activities and tools tailored to target investors for specific objectives.7 Advocacy is one of these tools. In the WBG’s 2017 global IPA survey, 95 percent of respondents said they engaged in “analysis or policy advocacy to improve the investment climate”—more than for any other single activity. The WBG’s operational experience indicates that this work may be weighted more heavily toward analysis than to proposing specific remedies or advocating their adoption and implementation. Frequently, IPA advocacy is limited to participation in reform initiatives led by other offices (“contributory advocacy”) or to advocacy in response to issues raised by individual investors (“responsive advocacy”). These are important channels for advocacy, but they are not sufficient, in that none are stimulated by the IPA’s own strategic objectives. When undertaken strategically, advocacy will be proactive and have clear, quantified, target outcomes—ones derived from the overarching objectives and priority sectors of the IPA’s institutional strategy (“proactive advocacy”). This advocacy may be sector-targeted, aimed at realizing specific development outcomes, or otherwise designed to further the IPA’s strategic goals. Yet, even proactive advocacy cannot single-handedly address critical issues, if these issues are not anticipated in the IPA’s strategy. Therefore, the IPAs with the most effective advocacy leverage their influence via all three of these channels: 1. Proactive: Advocacy in the proactive pursuit of strategic objectives (See Sections 3.1-3.3 for the cases of the Ethiopian Investment Commission, Toronto Global, and Invest India.) 2. Responsive: Advocacy in responsive handling of issues raised by investors and other investment ecosystem stakeholders (See Section 3.4 for the case of CINDE.) 3. Contributory: Advocacy through the contribution of insight and clout to the reform initiatives of others by, for example, sitting on a presidential committee for business environment reform. 7. Sawaqed, Lina, and Carlos Griffin. 2022 Planning for Success: Strategies of Investment Promotion Agencies. Equitable Growth, Finance & Institutions Insight. Washington, DC: World Bank. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 4 The first three case studies presented in Section 3—the gold, persistent, sophisticated, multi-pronged follow-up is necessary silver, and bronze winners of the 2021 Awards for Strengthening for any advocacy project to succeed and sustain successes. IPA Services—are all examples of proactive advocacy. The fourth When an IPA is not held strictly accountable for setting and and final case study is an example of responsive advocacy. meeting its objectives, it is easy for an IPA to neglect this taxing aspect of advocacy work. Many IPAs will only issue Advocacy outcomes can take months or, more typically, years polite recommendations for reform without advocating them, to materialize, and an effective advocate is likely to be working and there is rarely a strong expectation of actual reform on several issues simultaneously. This means an IPA’s advocacy even from individual investors raising issues, irrespective of must be both sustained, and remain coherent, over time. This is accountability. Ensuring full and effective advocacy requires a complex undertaking, which requires systematic management. good supervision. An IPA with a mixed public-private board A good advocacy management system consists of: of directors is best suited to holding advocates accountable for their outcomes.8 As the office with primary responsibility • A combination of parts forming a complex whole, for holding the IPA accountable (for example, line ministry including personnel, organization, tools such as investor or head of government) may itself be an object of the IPA’s and stakeholder databases and questionnaires, and advocacy, the responsibility for holding the IPA to account for processes that rationalize the identification of issues and its performance as an advocate shifts more toward its board of decisions over which to pursue; directors. Yet, as the board itself is also likely to have members • A coordinated plan with clearly articulated steps, selected precisely for their representation of other investment- timeframes, and responsible parties, both for working on related government offices, these too may be the object of the individual issues and for managing an overall agenda of IPA’s advocacy, and the board’s private sector representation prioritized issues; and therefore becomes even more crucial to driving advocacy and • Consistent implementation of the plan, facilitated by demanding outcome targets be met. tools, such as checklists, flowcharts, and customer relationship or process management software. The optimal design for a system of accountability with respect to an IPA’s advocacy depends on its objectives and local This is complex and not sufficiently understood by many circumstances. However, key principles apply to any IPA, as IPAs themselves, let alone the offices tasked with holding outlined in Figure 1, and three essential steps for effective those IPAs accountable. As will be discussed in Section 2.4, advocacy may therefore be generalized, as seen in Figure 2. >>> Figure 1. Key principles underlying effective advocacy Held Accountable Systematic Strategic Public-private board demands Ongoing. Planned. Proactive Designed to serve IPA’s highest advocacy results serving IPA and responsive. Reforming and objectives objectives relationship-building Evidence-based Tackles Root Causes Highly Consultative Uses objective data to benchmark, Thorough in issue ID and solution IPA leads from behind assess costs and benefits, and formulation. Gets at root causes to formulate solutions offer tailored solutions Persists Practically Special Skills Monitors & Evaluates Has lofty but achievable goals, Advocates hired/trained for skills Outcomes are measured to adjust pursued persistently, accounting for at analysis, comms, lobbying, and results and improve advocacy real obstacles relationship-building 8. Morisset, Jacques. 2003. Does a Country Need a Promotion Agency to Attract Foreign Direct Investment: A Small Analytical Model Applied to 58 Countries. Policy Re- search Working Paper 3028. World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/18230 EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 5 Where the key principles above are institutionalized, advocacy is more likely to take root as an integral part of an IPA’s work. Where they are not institutionalized, the IPA staff members tasked with advocacy may still accomplish much alone by following the three steps to systematic advocacy presented in Figure 2. >>> Figure 2. Three steps to systematic advocacy Prerequisite Outcome targets for advocacy, based 2. FORMULATE on the IPA’s overall SOLUTIONS strategy 1. 3. ADVOCATE IDENTIFY ISSUES ADOPTION & IMPLEMENTATION The single verb “advocate” belies the multiple steps its different elements of an investment ecosystem. The best successful application requires. For an IPA to improve the sources for information on issues impeding investment, investment ecosystem, it must identify problems, formulate as well as on proposals for remedies and a sense of the solutions, and persistently advocate their adoption and likely impact on the investment ecosystem, are investors implementation. These are three distinct steps, each with its themselves. Established mechanisms for issue intake, such own skill and tool requirements. Each step may be shared as those of a formal investor grievance-handling mechanism among multiple staff members internally and requires the (for example, an investment ombudsman’s office), are useful involvement of many actors, some external to the IPA. sources. Studies also show that strong IPA advocates tend to interact frequently with the private sector, either directly (for example, through aftercare) or through surveys, which 2.2 Issue identification often allows them to identify issues.9 Yet, while investors may render individual issues with great detail and sensitivity, each investor may only provide a very narrow piece of the Sources for issue identification. The issues faced by national picture. Stakeholders with a high-level view, such investors vary greatly—by sector, business activity, market, as chambers of commerce, may give a more comprehensive subnational location, factor intensities, and any number of view of the issues afflicting an investment ecosystem but firm characteristics that interact in various ways with the with correspondingly sparser detail with respect to the 9. de Crombrugghe, Alexandre. 2019. Supporting Investment Climate Reforms through Policy Advocacy. OECD Investment Insights. Paris: OECD. https://www.oecd.org/ daf/inv/investment-policy/Supporting-investment-climate-reforms-through-policy-advocacy.pdf EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 6 ground-level effect on each investor or the impact a given procedures are too slow” is merely a symptom, and this brief remedy may produce. Somewhere in between, for example, formulation of the issue does not illuminate the root cause(s) a government office (for example, ministries of agriculture, of the problem. That scarcity of detail and lack of depth energy, ICT) or international organization dedicated to the then serves to hamper IPAs when they attempt to formulate development of particular sectors (for example, World appropriate and effective solutions. The root causes of this Bank, IFC, UNCTAD, OECD, UNIDO, FAO, ITC), one can example issue might include the existence of an obsolete expect medium breadth but richer detail on sector-specific customs infrastructure built to accommodate much lower issues and their impacts. These reports typically have the trade volumes, the limited availability of customs officers, added benefit of expert recommendations for remedies and, or customs officers inadequately trained with regard to the occasionally, the FDI outcomes which might be expected application of tariff codes. Each of these causes implies a from them. different solution. A balance must be struck between collecting precise knowledge Understanding issue impact. Issue identification also of particular issues and comprehending the full breadth of requires a degree of impact identification. “Customs investment ecosystem-wide issues. Such a balance has three procedures are too slow” does not provide any information important implications for an IPA and its government: on how much time is lost by adherence to them or the impact 1. Third-party analyses of investment ecosystem issues they have on a given business’s bottom line. This makes it and subsequent recommendations tend to be based difficult to determine the relative importance of the issue and on conformity to international best practices without whether it should be prioritized above others for resolution. A judging their suitability for the particular government’s more useful characterization might be “Export procedures at development objectives. Port X are four days longer than the regional average and eight 2. No matter how expert or well-meaning, a single source days longer than the regional leader. For each day shaved of information cannot simultaneously provide the depth from export procedure times, the location’s fruit exporters and breadth needed for a full picture of an investment (HS0803-HS0810) would save an estimated $3 million in ecosystem. spoilage and be more competitive in premium markets.” The 3. The IPA, as the connector between investors and monetary value detailed in this statement of the issue is much governments, and the lead body for investment ecosystem more likely to give stakeholders a sense of importance and advocacy, is best positioned to gather the analytical pieces move them to urgent action. The mechanism describing how needed to compile a full picture of the ecosystem and customs leads to a particular loss (in this example, spoilage process analyses and recommendations for maximization and slowness to market relative to competitors) allows of the government’s development objectives. advocates and their partners to conceive of more solutions, such as cold storage at ports and focusing customs reforms Therefore, IPAs need to consult and collect information from on capacity building surrounding phytosanitary procedures. a diversity of sources chosen for their knowledge of the IPA’s priority sectors, some of which may be well established and Collection and management tools. Typical issue collection some of which may be aspirational. Although there is likely methods for established investors include a combination overlap, the issues impeding the retention and expansion of of periodic surveys, regular direct contact through the established FDI may be fundamentally different from those IPA’s aftercare work, public-private dialogue (PPD) forums, impeding the attraction of new FDI. the grievance-handling mechanism, and other business- to-government feedback loops. However, discerning To adequately understand and address issues, it is not impediments to the attraction of investors in aspirational enough to identify an investor’s general complaint. Rather, sectors is more difficult, as the IPA has little to no relationship advocates must identify the issue’s root causes, the with investors who have not inquired about or visited the mechanisms by which this issue proceeds from its root cause location. Sector studies from research organizations and to affect investors, and the downstream consequences it has benchmarking studies from consulting firms can provide once reaching the individual investor. For example, “Customs IPAs with a good understanding of what is driving FDI to EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 7 other locations and how the IPA’s location compares in terms particularly where the IPA can rely on the facilitation of of the driving factors. Issues in aspirational sectors can also an overseas office or a partner in government, such as a be explored through interviews or questionnaires circulated diplomatic mission. to potential investors during an IPA’s targeted promotional campaign or after an investor contacts the IPA with an The tools needed for information collection are outlined in inquiry. However, this information may be scant. Surveys of Figure 3. target investors might also be conducted in target markets, >>> Figure 3. Outline of necessary tools for information collection 1) An internally unified set of investment ecosystem topics and definitions; 2) A database of existing and targeted investors; 3) Personnel charged with implementation and supervision of advocacy plans, questionnaires, and means of delivery in person or online (for example, Survey Monkey, Google Forms); 4) Standard operating procedures for seeking and recording inputs about the ecosystem when contacting investors; 5) Partnerships with similarly interested stakeholders (for example, sector associations, office of an investment ombudsman, chambers of commerce, binational chambers) to coordinate information collection and the other advocacy steps; 6) A schedule for recurrent fact-finding (for example, surveys, PPD meetings, on the sidelines of informational or matchmaking events); 7) A customer relationship management software (CRM). A CRM is normally used to record issues raised by individual investors and may sometimes be used to analyze them in aggregate, which requires agreement among IPA managers and partners on what information is to be tracked and how it is to be reported. Prioritization and agenda-setting. An IPA’s limited time full sense of everything the IPA wants to achieve through and resources will not allow it to fully pursue resolution of its activity. This helps advocates and their partners find all issues simultaneously, and it should therefore pursue synergies across issues, when formulating solutions and the issues of greatest consequence to its own strategic advocating them. objectives. Easily resolved, high-impact issues are the best place to start advocacy. As impact and/or ease of resolution When asked to name their issues, investors may present decrease so would an issue’s priority level. An annual IPA a long list, but not all items on that list will be of equal plan to advocate solutions could only include some top consequence for them. Therefore, an IPA’s issue identification number of issues. This is the IPA’s “advocacy agenda.” should establish a baseline of investors’ issues today, the Issues may be added to or dropped from the agenda as expected situation if the given issues are not resolved, and advocacy advances and priorities or circumstances change, the expected situation if they are resolved. This leads us to a but at any given moment the advocacy agenda gives a set of questions as outlined in Figure 4. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 8 >>> Figure 4. Key questions for issue dentification and prioritization 1. Type of 2. Firm’s local 3. Issues (root 4. Firm’s 5. Anticipated firm: impact: causes): present effects of issue trajectory: resolution: What sector/ What has been What issues are business activity is your (i) capital impeding your Assuming the If the issue were your firm in? expenditure, (ii) business? How issue remains resolved to annual revenue, (please quantify)? unchanged, in five your complete (iii) number of years do you expect satisfaction, how employees, (iv) your business to would that affect annual export have (i) expanded, the types of local value, and (v) value (ii) remained more impacts listed in of domestically or less stable, Question 2, if at all? procured inputs? (iii) shrunk, or (iv) How would it affect been completely your trajectory, if at divested? all? These questions are keyed to individual firms but may be entry-by-entry reviews to account-based reviews. This is an adapted for representatives of larger groupings, such as sector idealized process best suited to the proactive approach. associations or subnational authorities. Although the IPA may frame the debate with studies and position papers, the process is highly consultative. The IPA presents 2.3 Solution formulation issue analysis and any preliminary list of solution options arising from the analysis to the anticipated beneficiaries of the resolution and the actors whose cooperation would be needed Each issue may have many possible solutions, so this note to achieve resolution. The IPA may lend impetus and provide cannot offer a comprehensive typology of solutions. Instead, input to the formulation of the final solution, but the details of it provides observations on how solutions tend to vary when the solution are ideally agreed by enactors and beneficiaries. In (i) they emanate from proactive advocacy versus responsive this way, solutions are more likely to be enacted and have their advocacy, and (ii) they are aimed not at specific issues but at intended effect with a minimum of opposition and unexpected the business environment more generally. obstacles. These discussions may be held with all stakeholders at one time in one place (synchronously), or the IPA may consult Tailored solutions arising from the proactive approach. The them in turn (asynchronously). issue identification described in 2.2 is IPA-driven, deliberate, and comprehensive. It is designed to identify root causes of With adequately high-level stakeholder representation, the investment ecosystem issues and quantify their impacts. This direct debate enabled by synchronous consultations is most allows the IPA to guide stakeholders through a process of efficient. In fact, issue identification and solution formulation articulating what the satisfactorily-resolved situation would look can sometimes be achieved at a single event. High-level, like and then formulating options for an action or set of actions synchronous consultations may reveal issues and give quick meant to achieve the contemplated resolution. To continue the endorsement to the outline of a solution, before turning the example of slow customs clearance from Section 2.2, identifying details over to a lower-level working group. These high-level limited staff and infrastructure capacities at border crossings consultations may be arranged ad hoc, but with many issues as a root cause allows the formulation of targeted solutions, to address and the recurring need for high-level consultations, such as adopting the UN’s Automated System for Customs these meetings may be more reliably arranged as part of Data (ASYCUDA), adding two lanes for commercial vehicles a standing public-private dialogue platform, with the IPA’s at Border Crossing X and corresponding staff, and shifting from advocacy agenda feeding into it.10 10. Reichel, Marc, Robert Whyte, and Armando Heilbron. 2022. High-level Structures Supporting the Institutional Framework for Foreign Direct Investment Promotion. Equitable Growth, Finance & Institutions Insight. Washington DC: World Bank. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 9 When logistics do not permit synchronous consultations preferences of a supervising office that may or may not be or when issues are of interest only to narrower audiences, equipped to balance issue analysis and the formulation of asynchronous consultations may be more useful, as the nationally optimal solutions. At a minimum, this requires that IPA processes proposals, objections, and counterproposals the IPA personnel in contact with that office understand well the one bilateral or small multilateral meeting at a time. The IPA principles laid out in this note, are able to get their counterparts to has a larger responsibility in this case, as shepherd to the search jointly for root causes and their most effective solutions, evolving solution and the only actor with a full, current view of and have the authority within the IPA to do so. a solution’s journey to adoption. This is especially important considering that stakeholder expressions of buy-in made to Cross-cutting solutions to non-specific issues. There the IPA bilaterally or at a lower level may have less weight are times when a solution can be identified without a specific than expressions made publicly. issue. Simple improvements in government efficiency, for example streamlining government procedures for business, In cases where there are no public-sector champions of may have broad, if difficult-to-measure, benefits to the general reform or where the solution is very clear, the IPA may find business community, with little to no downside. This is easily it especially practical to formulate the solution itself, without understood as facilitating most investment projects without the stakeholder consultation. In these cases, it may be particularly analytical rigor of a cost-benefit analysis. helpful for the IPA to arm itself with a succinct position paper laying out the solution(s) with ample use of objective figures and citations from well-respected sources. 2.4 Advocating adoption and Stakeholder-raised issues with preconceived solutions. implementation When an IPA receives an issue identified by others, it is likely to be less refined and often comes with some expectation of Effective advocacy is fundamentally project management for a a particular solution. A special economic zone authority, for political environment. It may be required not just for adoption example, may complain that “We need better incentives to of measures but, afterwards, to ensure that measures are attract more tenants.” This suggests the location is not generally implemented as intended and with the anticipated effect. It feasible in its own right, that the most important difference requires a plan with intermediate steps, key decision-makers between it and its competitor locations is the incentives and implementers, messaging content, communication offered, that some adjustment to the incentive regime will channels, allies to be mobilized, and material requirements. attract previously unattainable FDI inflows, that the benefits It designates responsible parties and timeframes for the steps of this additional FDI will outweigh the cost of the incentives individually and collectively. (particularly as afforded to companies which would have come without the incentives), and that the advantage gained through The IPA, as the “project manager,” designs this roadmap and these new incentives will be sustainable. This is a large array of shepherds stakeholders through its stages. If unexpected suppositions. Although some may be astute, if any are incorrect, obstacles arise or targets are missed, the IPA takes note and they can lead to suboptimal, or even erroneous, “solutions.” works with partners to get the roadmap back on track. The IPA Before accepting such a preconceived solution wholesale, the can do this alone or as one advocate among several working IPA should subject it to the same intellectual scrutiny as with an in coordination. These alliances may vary by issue, but the issue it has identified itself. more an IPA’s advocacy is backed by an influential coalition, the easier it becomes to win even broader support. Pushing back on a preconceived solution can be difficult for an IPA, especially when it comes from a line ministry or head The audiences for advocacy are, therefore, many and varied. of government’s office. However, it is necessary if the IPA is Because of this diverse audience, the IPA’s objectives and to serve as a technical expert and knowledge resource for the approaches with respect to each can vary greatly. Some investment ecosystem, and thereby guide other stakeholders typical audiences and objectives for advocacy with each are to better collective results, rather than simply amplifying the outlined in Figure 5. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 10 >>> Figure 5. Common audiences for advocacy and some typical objectives with each Decision-makers and their advisors: The people with the most direct authority to approve a reform. Providing them with objective Implementers: research and arguments in favor of a reform can go The people who will do the actual work implied by a long way in persuading them to act. the reform, such as certain civil servants, or their representatives, such as a civil servants’ union. Beneficiaries: Understanding their concerns and building mitigating This audience includes those, like investors, elements into solutions can greatly increase buy-in that stand to benefit from the reform. Including from implementers, especially when they are directly anticipated beneficiaries, not only during issue consulted in the formulation of the solution. identification but also during the formulation of solutions, can help secure their buy-in and Perceived “losers:” mobilization as fellow advocates. The status quo nearly always has its proponents. Some of these are motivated by concern over Influencers: potential loss of benefit, authority, freedom, and so This audience is more about individual personalities forth. Opposition from the reform’s “losers” may be and relationships in the landscape of other softened by bringing them into the discussion and audiences. For example, a well-respected adjusting the reform to demonstrate respect for academic, former official, or other public figure their concerns. may be an effective champion for reform initiatives, lending their credibility and goodwill to initiatives The public: that might otherwise escape public notice. Job creation, increased wages from new value- adding activities, improved goods and services from Media: new domestic production, and so on are benefits Collectively, media platforms are a type of channel meant to be enjoyed by the domestic populace, for reaching audiences. However, reporters, and having the public aware and appreciative of the editors, news producers, and publishers decide IPA’s work therefore gives the IPA extra clout as an what to cover and how to frame it. An IPA advocate advocate. However, this is a very indirect effect and can attempt to affect how public discourse on FDI- can typically be achieved only gradually. enabling reforms is framed, by raising awareness among members of the media. A successful plan takes full account of typical obstacles, such on solutions, and accomplish weeks’ worth of advocacy all at as institutional inertia, vested interests, resource and capacity once. In the same way that pre-existing forums can facilitate constraints, reluctance of stakeholders to deal with the work advocacy on multiple tracks simultaneously, so too can pre- implied by reforms, and even the dynamics of corruption. This existing relationships. A shared history of joint action for mutual demands a high level of diplomatic skill, to sympathize with benefit is an excellent lubricant for the otherwise slowly- the objects of one’s advocacy, to help them find ways to “yes,” turning gears of awareness-raising and consensus-building. to engage others as allies, and to build political capital for The longer-standing, stronger, and better institutionalized a the long run by ensuring that target outcomes have a shared relationship, the less time and effort are needed to achieve value and by sharing credit for their achievement. shared understanding of issues and agreement of solutions. Although advocacy can be conducted on an ad hoc basis, it is As an IPA’s advocates are typically at work on multiple issues more effective and better sustained through clear institutional simultaneously, the IPA may benefit from a master plan-of- arrangements and fixed mechanisms. There is no template for plans to create synergies and streamline its work. For example, institutional arrangements into which all countries should or a semiannual, high-level PPD forum may be the ideal place can fit. Rather a good IPA advocate seeks to understand the to quickly present a number of issues, gather diverse inputs institutional and political environment in which they are working EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 11 and advocate the investment climate reform partnerships and mechanisms to fit. For this reason, an IPA’s work should be viewed as having two distinct tracks: direct and indirect. The direct track advances solutions for specific issues. The indirect track advances relationships and resources, so that later advocacy can be made more effective. Advocacy should have explicit, quantitative objectives, whose achievement serves to establish an impact narrative that the advocates and their partners can use to demonstrate success and build further support for future advocacy. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 12 3. >>> Illustrative cases from the 2021 Awards for Strengthening IPA Advocacy Services Of the four cases that follow, the first three come from the IPAs which placed in the top three spots in the competition: Ethiopian Investment Commission (EIC), Toronto Global, and Invest India. All are examples of proactive advocacy driven by the strategic objective to attract new FDI in sectors believed to be competitive but underperforming. While the three steps of issue identification, solution formulation, and advocacy can be seen in each case, their cases differ substantially in terms of the IPAs’ objectives, their starting circumstances, and how these led each IPA to a unique solution of high impact and importance to its location. EIC found it could immediately unlock new sectors with a single, high-level reform. Toronto Global used regular, institutionalized, high-level dialogue to facilitate a broad reimagining of its economic future. In India the national IPA found a way to motivate most of the country’s subnational governments to reform themselves in support of start-ups. The fourth case, that of Costa Rica’s CINDE is an excellent example of responsive advocacy, whereby the IPA’s standing mechanisms for investor issue intake led to a regulatory reform during the COVID-19 pandemic, which allowed established investors to quickly shift to remote work. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 13 3.1 Ethiopian Investment practices. The diagnostic studies were undertaken in partnership with the World Bank and IFC, leveraging various global reports Commission: Unlocking new sectors of the WBG, UNCTAD and ITC and benchmarking studies of for FDI 10 “best-performing countries” as comparators. This allowed EIC to leverage vast global technical expertise in its efforts to conduct issue identification. This approach had two key benefits. The issue analysis came with recommended solutions, and both the analysis and recommendations had inherent credibility as the products of internationally recognized, third-party experts. One critical issue that emerged from all seven studies was Ethiopia’s approach to setting restrictions on the sectors open to foreign investment. Most countries forbid FDI in some Ethiopian Investment Commission’s Advocacy sectors for security reasons (for example, nuclear energy, arms manufacturing), to protect domestic constituents from Award Video competition, or because they are deemed the exclusive purview of the government. Where the rules are transparent and CONTEXT administered predictably, investors in unrestricted sectors know they can proceed without government objection, and investors From 2004 to 2017, Ethiopia experienced rapid GDP growth in restricted sectors do not need to waste time and money to with annual rates ranging from 9 percent to 14 percent. FDI discover this fact. To achieve this, international best practice inflows also expanded greatly during this period from an argues for the use of a “negative list,” whereby all forbidden sectors annual average of $345 million in the 2004-2012 period to $1.9 are explicitly stated, and anything not on the list is permitted by billion in 2013-15 and an impressive $4.1 billion in 2016-2017. default. Ethiopia, on the other hand, was using a “positive list,” Between 2012 and 2017, Ethiopia witnessed a 14-fold increase whereby only those sectors explicitly stated were permitted by in annual FDI inflows, and by 2017 Ethiopia had emerged as default, and anything else required project screening and special an important FDI destination with a growing industrial base and permission, a process which investors had found to be opaque myriad opportunities for infrastructure development.11 Yet, as and unpredictable. The number and variety of Ethiopian sectors FDI inflows had increased, the country’s evolving regulatory piquing investor interest were growing, but the government’s environment had become relatively more difficult. Broadening positive-list approach was impeding conversion of that interest interest from foreign investors was meeting an increasingly into potentially lucrative projects. challenging environment for business entry and operation. In 2018, Ethiopia’s GDP growth fell to 6.8 percent, the lowest Several other issues were highlighted across the analyses, since a 2003 recession, and annual FDI inflows fell 18 percent, including: the first substantial decline since the 2012-2017 boom. • A cumbersome visa regime • The number of onerous start-up procedures ISSUE IDENTIFICATION • Weak coordination between the federal and regional governments In 2019, following these declines, the Ethiopian Investment • Gaps in intellectual property protections Commission (EIC), the country’s lead agency for investment • The absence of private-sector representation on the promotion, sought to obtain a comprehensive understanding Ethiopian Investment Board (EIB), the prime minister- of the country’s obstacles to business entry and operation. chaired policy and supervisory body overseeing EIC and During a six-month period, EIC undertook seven diagnostic implementation of the national investment law and benchmarking studies to see how the country’s investment • An undefined process for investor grievance handling policy and sector regulation compared to international best 11. Data on FDI inflows from UNCTADstat database, UNCTAD, Geneva. https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740 EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 14 S O L U T I O N F O R M U L AT I O N Before advocating a revision of the law, EIC presented its findings and recommended solutions to a number of investor For ease of consumption, EIC consolidated the findings of groups to validate the proposals as likely to generate the the seven reports into two in-depth, technical reports, one on intended FDI outcomes. the investment administration process and another on options for opening more sectors to investment. To process these assessments, get at root causes, and formulate the most ADVOCATING REFORM appropriate solutions for Ethiopia, EIC established a technical working group of its staff and other experts. After validating the anticipated effect of its proposed reforms with investors, EIC began the work of advocating reforms. Among the many potential solutions, it was clear that the shift Instead of relying on the two detailed technical reports it had from positive listing to negative listing would require a change in on hand, EIC prepared for advocating reform by drafting the law. Although many of the other reforms might be achieved a short position paper. The high-level summary of issues, by other means, a legal change would be more permanent. details of their negative impacts, specification of clear reform recommendations, and listing of anticipated positive outcomes The working group proposed that multiple solutions be addressed was better suited to persuading busy policymakers. in a single legal change. Namely: EIC started its advocacy measures with the Ethiopian Investment • Eliminating the minimum capital requirement for reinvestment Board. Its members were the crucial stakeholders from whom in any business initial buy-in was most highly-sought, because the proposal • Establishing a coordination platform for the federal and included a potentially sensitive change to the composition of subnational governments the board itself, and because any disagreement with EIC’s • Granting a 5-year multiple entry visa for investors supervising body would amount to internal incoherence. After • Granting work permits to cohabitating spouses of investors all, how could EIC expect to win the support of others if its own • Recognizing intellectual property rights as investments supervisors were not supportive? • Expanding the number of services offered through EIC’s one-stop shop The board approved of the proposed reforms to the national • Adding private sector representatives to the Ethiopian investment law. An impatient, short-sighted advocate might Investment Board have taken that high-level approval as a green light to go directly to parliament. However, EIC understood that while From these, one can see that the natures of issues themselves limit parliamentary passage was necessary, it was not sufficient for the types of solutions that are possible. For example, some issues: the fullest implementation of reforms. Cooperation would be needed for implementation from stakeholders with legitimate • Have one solution state, as when switching from a positive reasons for preferring the status quo. Consulting them and listing policy to a negative listing policy earning their buy-in would be more easily done before passage • Have one solution but in degrees, such as putting private of the new law. To this end, EIC held five consultation workshops sector representatives on the EIB or granting work permits for public and private stakeholders, hearing their concerns to spouses. and brainstorming on the fine details needed for the law and ◦ The number of representatives and the number of years subsequent implementing regulations. may be set at different levels, so the government will wish to choose a number that satisfies complaints but The process also allowed EIC to engage with stakeholders who still balances any competing interests. For example, 50 were willing to act as champions of the reform and amplify EIC’s percent of EIB seats may go to the private sector but not advocacy messages. While EIC lobbied the national cabinet 100, and spouses may get five-year work permits but and parliament for the new law’s enactment, these champions not permanent work rights. Five years may be on the reinforced the message with key decision-makers and in longer side, by international comparison, but matches public discourse. In the end, EIC achieved not only passage the number of years given to investors themselves. of Investment Proclamation No. 1180-2020, which included • Are non-specific and multifaceted, such as “lack of the advocated changes, by April 2020, and its implementing coordination among different levels of government,” which regulations five months later, but also achieved widely-shared lend themselves to non-specific, multifaceted solutions, such enthusiasm for their implementation and the FDI benefits they as “institutionalized intragovernmental communication,” would afford the country. which can take many forms. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 15 >>> Figure 6. Timeline of EIC’s advocacy reform Issue Solution Advocating Adoption/ identification formulation reform implementation Jan 2020: Law approved 2019: Public-private 2019: Technical consultations Apr 2020: Law into 2019: Investment diagnostic report effect climate assessment Winning support of EIB Policy white paper Sep 2020: Implementing Briefing parliament regulations IMPACT OF REFORM 3.2 Toronto Global: Leveraging a pre- Since this achievement, several sectors that were previously existing mechanism for collaborative dominated by state-owned enterprises have been fully opened, advocacy to reboot a regional economy and entry for all FDI projects is much more transparent, straightforward, and fast.12 Six months after implementation of the new investment law specific impacts attributed, at least in part, to EIC’s successful advocacy include: • Three new investment projects in cement manufacturing and management consultancy, two wholly-foreign invested and one foreign-domestic joint venture, amounting to $650 million in capital and 1,500 jobs. • One telecom operation license for the Global Partnership for Ethiopia consortium has been issued, bringing $850 million alone in license fees, potential additional Toronto Global’s Advocacy Award Video investment of over $1 billion, and generation of over a million jobs with ten years of operation. This represents a CONTEXT transition from the long-time state monopoly of the sector to an open telecom sector. In the decade before 2019, the Toronto metro area experienced • 51 investment projects in the pipeline — with over $5 tremendous population growth of 15 percent, adding more million already invested and $162 million in committed than 700,000 people.13 However, infrastructure and public capital and the potential to create over 5,250 jobs. services lagged, and socioeconomic disparities grew. The • Improved investor satisfaction with transparency in the percentage of affordable housing shrank, with 40 percent delivery of government services. of the population spending more than 30 percent of their incomes on housing. While the regional transit system added As development benefits of FDI in new sectors become reality, the equivalent of 20 percent more kilometers of scheduled the shared credit for these proven results will make it easier service, ridership increased by 36 percent, and the transit the next time EIC is building support for reform. authority itself recognized system expansion as too slow to match demand.14 While the devolved nature of the Canadian government allows the 34 municipalities of the Toronto region to set their own priorities for housing, public transit, and economic development, it also adds a layer of complexity to the formulation of regional solutions. 12. WAIPA. Gold Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards. (Geneva, CH, 2021), https://www.youtube.com/watch?v=Dd8QlcY- PuzY&t=1s 13. Macrotrends, ‘Toronto, Canada Metro Area Population 1950-2022’, Macrotrends, 2022, https://www.macrotrends.net/cities/20402/toronto/population. 14. Tess Kalinowski, ‘Toronto Has Seen Huge Growth in the Last Decade. The Challenges Ahead Are Just as Huge’, The Toronto Star, 27 December 2019, sec. GTA, https:// www.thestar.com/news/gta/2019/12/27/toronto-has-seen-huge-growth-in-the-last-decade-the-challenges-ahead-are-just-as-huge.html. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 16 I S S U E I D E N T I F I C AT I O N Committee members reviewed the economic structure map, survey, interview results, global location decision criteria, and When the pandemic struck in early 2020, it lent impetus to major best practices with the objective of developing a strategic reviews of economic policies at all levels of government. Toronto master plan. Beyond simply addressing existing problems Global (TG), the Greater Toronto Area’s IPA and one of the few for investors, the plan would guide policy and promotion organizations with a regional mandate, supported voices calling in overcoming existing issues and avoiding new ones in for a long-term reimagining of the regional economy, instead the medium term, putting the region on the path to fulfilling of limiting the economic policy debate to short-term pandemic long-term growth and development objectives. To this end, recovery measures. TG partnered with the like-minded Toronto solution formulation did not start with the issues, but rather Region Board of Trade (TRBOT), a 13,500-member chamber with a consensus vision for the long term and then worked of commerce, to co-chair two tracks of its Shaping our Future backwards through the key measures the government and its project. The project’s public-private steering cabinet included partners would need to realize that vision. executives of sector-leading companies, public service providers (such as a postal system or airport), economic development The consensus vision was that a regional geographic area known authorities, universities, promotional authorities for trade and as the Toronto Innovation Corridor should “be a high-growth, tourism, and representatives of the national, provincial, and integrated, economic zone that attracts top talent and investment municipal governments. due to its diversity, livability, future-oriented infrastructure planning, and overall global competitiveness.” If this was the “Where we TG, TRBOT, and their partners began issue identification want to go” of a new regional strategy, the details of “How we get with several data reviews, surveys, and consultations meant there” fell under the headings of three necessary transformations: to reveal the region’s growth patterns, competitive sectors, investor needs, and how policy best practices might be 1. The economy being equitable, integrated, and high-growth. leveraged within this context. TG analyzed the critical site 2. Infrastructure funding being regionally coordinated and selection requirements of existing and potential investors future-oriented. by reviewing more than 120 of its landed investments and 3. Municipal governments being responsive, coordinated, hundreds of unrealized projects for which it had received and welcomed as collaborators. inquiries. TRBOT used data from the national statistics bureau to produce a granular map of the region’s economic These transformations would address pre-existing issues activities and employment, identifying sectoral corridors, exacerbated by the pandemic and position the region strategically interdependencies, and commuter patterns. for the future. During the spring and summer of 2020, the steering committee met to formulate a detailed “playbook” of specific With this context in hand, the Shaping our Future project actions to realize the transformations. The result was a 10-point team leveraged the services of a consulting firm to survey key action plan touching on a range of issues, including workforce companies, chambers of commerce, and boards of trade.15 The skill development, affordable housing, high-capacity broadband issues they raised concerning the Toronto Region’s investment access, transportation across the innovation corridor, greenhouse ecosystem were assessed for importance and prioritized. gas reductions in the largest emitting sectors, a digitized and innovative government, harmonized public procurement, and a “new deal” for socioeconomic equity. S O L U T I O N F O R M U L AT I O N The actions were designed to work synergistically, helping As a founding member of C40 Cities, a group of megacities stakeholders advance the “triple bottom line” of profit, people, agreeing to climate action in partnership with the UN and the and planet. For example, the integrated transportation Clinton Climate Initiative, Toronto enjoyed a pool of stakeholders system envisioned would connect more people to more job with deep commitment, experience, and technical capacity for opportunities, allow businesses to better attract talent with easier forward thinking in urban development planning. The Shaping our commutes, remove transportation as an obstacle to labor force Future project’s steering committee, which was co-chaired by TG participation by low-income and marginalized communities, and and TRBOT, had been recruited from among such stakeholders, reduce greenhouse gas emissions regardless of where they and this was the body tasked with solution formulation. live. The 10 actions to achieve the three transformations are summarized in Figure 7. 15. In this instance the firm retained was Deloitte Touche Tohmatsu Ltd. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 17 >>> Figure 7. A reimagined economy: Toronto’s playbook of 10 actions to achieve 3 transformations Three Interconnected Three Interconnected Transformations Transformations Create a regional FIGURE 4 affordable housing strategy Invest in social Three Interconnected Transformations to Develop a skills Regional leadership determinants of health Deliver One Integrated Economic Zone agenda to match the caucus with Province Regional leadership caucus future of work of Ontario and Government of Canada with Government of Action Lead Timeframe Toronto Region Board of Canada, Province of Ontario Trade with Universities & Short-term to Colleges councils medium-term Medium to long-term Toronto Region Board of Trade Short-term in conjunction with regional with regional economic leadership caucus recovery strategy Growing an Develop a regional Short-term staged approach Equitable Economy economic strategy for recovery Shift to an equitable, integrated and high growth economy FUTURE STATE Expedite high-capacity Make transportation Target GHG The Innovation Corridor is a Infrastructure as a broadband across seamless and reductions in high-growth, integrated Innovation Corridor connect the Corridor largest emitting Regional Catalyst by 2025 sectors economic zone that attracts Toronto Region Board of Trade Shift to regionally Short-term (plan & connect Regional leadership Province of Ontario top talent and investment due coordinated funding that caucus, municipal transit and Government is future-oriented municipalities with private agencies, and Metrolinx of Canada with to its diversity, liveability, sector) Medium-Term (build out by 2025) Short-term (Pilot) municipalities. future-oriented infrastructure medium-Term (Network Short-term to planning, and overall global change by 2025) medium-term competitiveness. Coordinated and Responsive Government Support a new deal for Shift to responsive and coordinated Canada’s global cities municipal governments that are encouraged to collaborate Coalition of business community including Canadian Global Cities Council (CGCC), civic society and Digitize, open municipal leadership including and innovate Federation of Canadian government Harmonize and simplify Municipalities (FCM) and Association municipal procurement of Municipalities of Ontario (AMO) Regional leadership processes and procedures The transformations address both pre-existing pain caucus with Toronto Medium-term to long-term points exacerbated by the pandemic and position (next federal election) Region Board of Trade Toronto Region Board of Trade and Innovation with Innovation Corridor Council the Corridor for the future. They are transformative Ecosystem and regional leadership caucus because they require a fundamental rethink to address Short-term (Kickstart Short-term discussions between (Kickstart case studies) long-standing issues ranging from procurement to Corridor municipalities) infrastructure and transit planning. 18 | Shaping Our Future A Playbood for Rebooting and Reimagining the Regional Economy in Ontario’s Innovation Corridor | 19 Source: Toronto Region Board of Trade, 2020. “Shaping Our Future: A Playbook for Rebooting and Reimagining the Regional Economy in Ontario’s Innovation Corridor.” p. 18. A D V O C AT I N G R E F O R M IPA advocacy were the ones collaboratively formulating the solutions. In this sense, TG and TRBOT needed to actively The high-level and inclusive nature of the steering committee advocate much less than they might have otherwise. TG and gave TG and TRBOT a tremendous advantage in their TRBOT, nevertheless, diligently solidified the playbook’s buy- advocacy. This was not merely good luck or even good issue- in by broadening consultation even wider than the already- specific advocacy; it came from the good institutionalization highly-representative steering committee and by ensuring of public-private policy dialogue in the Toronto Region. As endorsement at the federal level. In stakeholder consultations discussed in Section 2.4, pre-existing high-level forums at the beginning of the project and through the formulation of and relationships can facilitate advocacy on multiple tracks solutions, TG and TRBOT were able to secure the agreement simultaneously. The shared history of joint action for mutual of an audience of the region’s CEOs and civic leaders in all benefit builds trust, which allows for quicker, more far- sectors with respect to the project’s parameters for discussion reaching action. What might be impossible or take years in and to periodically review the work in progress. Then, as the another environment may be done in months or weeks in broad outlines of the playbook became clear, TG met with the an environment where investment ecosystem analysis and federal deputy minister of infrastructure to ensure alignment of reform is well institutionalized. the Toronto playbook with federal priorities. Because of the project’s high-level, public-private participation, Then, after the playbook was adopted in September of the same stakeholders who might normally be the object of 2020, TG and TRBOT immediately began advocating EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 18 implementation. All 34 municipal councils received a copy of TG and TRBOT’s follow-up work is the mark of agencies the playbook highlighting the participation of their own senior which strictly evaluate their own performance based on real city officials in its development. The region’s municipal-level outcomes and not simply activities undertaken. Today, TG and economic development officials were briefed on the playbook’s TRBOT continue to monitor regional indicators of growth and implications for their cities, as were key implementing equity (for example, GDP per capita, Gini coefficient, shelter organizations, such as the Urban Land Institute, the Greenbelt consumption affordability ratio) as measures of the success Council, and Toronto Pearson International Airport. TG and or failure of the Shaping our Future project. TG and TRBOT’s TRBOT or their partners made sure that other initiatives on follow-up work also promotes long-term advocacy success by related topics took the playbook into account by, for example, continually building stakeholder awareness of and enthusiasm presenting it at regional summits on pandemic recovery and for its advocacy. A summary of the steps taken by TG to secure transportation, as well as at the One Corridor Working Group, this advocacy can be seen in Figure 5, below. a roundtable of federal deputy ministers and municipalities touching on the innovation corridor running through Toronto. >>> Figure 8. Timeline of TG’s Advocacy Reform Issue Solution Advocating Adoption/ identification formulation reform implementation Sep 2020: Distribution Apr 2020: COVID Sep 2020: EBI analysis to 34 cities; Regional adds to pre-existing and consultations recovery summit Mar 2021: Ontario socioeconomic stresses turned into Nov 2020: One Corridor budget TRBOT Economic recommendations Working Group, Blueprint Initiative (EBI) Transportation Summit IMPACT OF REFORM Expansion program which will offer two-way, all-day service between multiple regional hubs by 2025 Specific impacts attributed at least in part to TG and TRBOT’s • TG closed 39 new international investments in 2021-22, successful advocacy include: creating the highest number of annual jobs and capex to date, with approximately 40 percent of those investment • Playbook recommendations incorporated into the recent benefits distributed regionally, outside the City of Toronto.16 budget of the Government of Ontario ◦ Funding to support in-demand skill development ◦ The largest single investment in broadband ◦ $1 billion in financial relief to municipalities ◦ The announcement of a two-way, all-day GO train service by 2025 ◦ $61.6 billion over the next 10 years to support priority transit projects, including the Metrolinx GO Rail 16. WAIPA. Silver Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards. (Geneva, CH, 2021), https://www.youtube.com/watch?v=5NY4kqbp- J5w&t=1s EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 19 3.3 Invest India: Advocacy to support 2016 data and only 4 of the 36 Indian state governments had policies specific to support startups.19 To overcome these the scaling of an innovation and challenges, Invest India adopted a comprehensive approach start-up ecosystem based on the notion of competitive federalism: By creating a national ranking of start-up-friendliness Invest India would incentivize states to augment the quality of their start-up support. This was done by relying on a given state’s desire to rise in the rankings and then to provide capacity-building assistance to states that sought it out. This process is detailed in the Solution Formulation subsection, below. I S S U E I D E N T I F I C AT I O N In this context, the growth opportunities that needed to be Invest India’s Advocacy Award Video identified were the misalignments between existing and best practices with respect to each of the state government’s CONTEXT support for start-ups. These issues would need to be objectively assessed annually so that state governments can Projected to become the world’s most populous country within build a more cohesive support system on a yearly basis. The the next few years, India is vast and diverse. It is ranked 3rd first year of this project would necessarily also be tasked with in the world for number of “unicorns”—start-ups valued at developing the benchmarking methodology to be used. more than $1 billion.17 In 2016, seeing start-ups as a driver of sustainable economic growth and large-scale employment, At its core, this required expert definition of the characteristics the national government undertook the Startup India initiative of good government support for start-ups and developing with an action plan for the national government in the three a feasible and objectively applicable scoring key. To do areas of (i) simplification and handholding, (ii) funding support this Invest India looked to international benchmarking and incentives, and (iii) industry-academia partnership and methodologies—such as the World Bank Group’s Ease of incubation.18 As the national body responsible for promotion Doing Business ranking—for structure and process and held of foreign and domestic investment, Invest India was multiple roundtables and workshops with stakeholders for designated the Startup India Hub. This made Invest India substance. These stakeholders included state government both a direct service provider to entrepreneurs and the lead officials, start-ups, and key ecosystem enablers, such as coordinator for collaboration among the central and 36 state incubators, angel investors, and venture fund managers. This governments, Indian and foreign venture capitalists, angel yielded inputs from more than 200 stakeholders in 31 states. networks, banks, incubators, legal partners, consultants, universities, and R&D institutions. In its first year, 2018, this outreach produced a framework with seven areas of government support and 38 action points that State governments in particular were viewed as essential would be expected of the most supportive governments and a partners because it was at the local level that entrepreneurs scoring key with criteria for allocating up to 100 points across would receive the most public support and services, such as all action items. Beneficiary feedback led to a revised set of 30 institutional support, simplified regulations, public procurement criteria in 2019, presented in Table 1, below. from startups, incubation support, funding support, and awareness-raising. However, varying governance capacities among the states and varying degrees of policy alignment with the central government made for formidable challenges in getting states to actively improve their support. When the initiative was launched, India had 471 startups based on 17. Statista, ‘Unicorns by Country 2021’, Statista, 2022, https://www.statista.com/statistics/1096928/number-of-global-unicorns-by-country/. 18. StartupIndia, ‘Action Plan’ (Vigyan Bhavan, New Delhi: StartupIndia, 16 January 2016), https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/Ac- tion%20Plan.pdf. 19. Today there are over 74,000 startups and policies for 31 states and/or union territories. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 20 >>> Table 1. Invest India’s benchmarking criteria for state support of start-ups Benchmarking criteria Area of support (points for each criterion given in parentheses, total = 100) Start-up policy (3), nodal department, officer, and team (1), online implementation 1. Institutional support system (4), mentor network (2), intellectual property support (1), partnerships (2), women entrepreneurship (6), support from various departments (5) Business compliance information system (4), invite or identify regulatory issues (2), 2. Simplifying regulations amendments in rules, regulations, or acts for supporting (6) Relaxation in “prior experience” criteria (1), relaxation in “prior turnover” criteria (1), 3. Easing public procurement relaxation in “submission of EMD” criteria (1), preference in public procurement (1), number of start-ups awarded work orders (8), grievance redressal mechanism (2) Setting up of new and upgrading existing incubators (12), number of seats (3), subsidized 4. Incubation support incubation (4), acceleration programme (4) Seed funding guidelines (2), online system for seed funding (2), seed funding beneficiaries 5. Seed funding support (7) 6. Venture funding support Support to venture fund (2), Start-ups funded from venture funds (6) Bootcamps (2), hackathons or grant challenges (2), angel investment workshops (2), 7. Awareness and outreach national or international events (2) Note: EMD stands for Earnest Money Deposits. The reform submission notes that ‘Startup India spearheaded several key amendments to enhance the growth of startups by opening doors to new avenues for startups in public tenders. Currently, all Startup India recognized entities are exempted from submission of Earnest Money Deposits (EMD)/ Bid Security under public procurement, thereby addressing a substantial barrier of capital locking while participation in tendering processes.’ Additional information is provided online.20 20. https://doe.gov.in/sites/default/files/Amendment%20to%20Rule%20170%28i%29%20of%20General%20Finance%20Rules%20-GFR%202017.pdf EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 21 With this framework in hand, a team from Invest India better-ranking states, providing the momentum for a “race to introduced the framework to each of the 36 states, of which the top.” This has the inherent advantage of strong buy-in from 30 chose to participate in the initiative’s inaugural year. Each reforming states. participating state was assigned a dedicated Invest India staff member to advise on submitting evidence of the state’s Invest India’s advocacy retained a push aspect in its qualifications. This was processed into a score for each state, awareness-raising campaign to notify all stakeholders of the as well as a report of its efforts and shortcomings in the seven issues and available options, as well as in its follow-up with areas of government support for start-ups. individual states. Specifically, Invest India took five steps. First, its state-specific reports included policy recommendations S O L U T I O N F O R M U L AT I O N (“action points”), which if implemented would allow states to close their gaps with top performers. The state initiatives were then summarized in a national benchmarking report, the State Startup Ranking (SSR), Second, Invest India hosted regional capacity-building and and a compendium of 166 “best practices” conceived knowledge exchange workshops after each annual release and implemented at the state level under a variety of of the rankings. Hosted in the top-performing regions of circumstances. In this way, the SSR initiative stimulated 30 Kerala, Maharashtra, and Rajasthan, the two-day workshops states to formulate and implement their own solutions. In allowed officials from other states to engage in insightful policy the federal system of government, states have been called discussions, exchange best practices, and meet with start- laboratories of democracy. Many state governments mean the ups, investors, and incubators in the leading states. simultaneous innovation and parallel testing of a wide variety of policy solutions to a wide variety of problems. The most Third, international capacity-building and exposure trips were successful results from this campaign of real-world testing can organized for more than 35 state officials to the U.S., Israel, then be implemented at the federal and state levels without and Germany with the aim of raising the national bar, so that the time, expense, and pain of having to come up with and even India’s top-performing states could find ample room for then validate each solution themselves. improvement as they learned to compete at the international level of proficiency. By recording, analyzing, and disseminating the states’ 166 best practices for start-up support, Invest India offered states Fourth, over 12 months, states were supported by their Invest a menu of options from which they could choose the measures India focal points in the implementation and documentation they found best suited to their own circumstances. The same of reforms. Using a dedicated online portal, states could Invest India staff member dedicated to helping each state securely share published policies, lists of beneficiary start- submit evidence of their qualifications was also tasked with ups, acknowledgment letters, proof of release of funds, event advising the state on the implementation of new policies and reports, and other evidence to improve their positions for the initiatives, ensuring that the best practices were utilized in the next year’s ranking. provision of tailored advice. And finally, Invest India undertook extensive validation work directly with the beneficiaries of each state’s reported efforts. A D V O C AT I N G R E F O R M For the 2019 ranking, Invest India made more than 60,000 calls in 11 languages to secure survey responses from more Invest India’s novel appeal to the inherent competition within a than 6,500 entrepreneurs to determine their ground-level federal system flipped advocacy efforts upside down. Instead perspectives of each state’s services and improvements over of the typical “push” of solutions onto stakeholders by an the previous year. advocate, the desire of individual states to move up rather than down in the ranking created a “pull” of states seeking A summary of the steps taken by Invest India can be seen in out advice on how to close the gaps between themselves and Figure 9. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 22 >>> Figure 9. Timeline of Invest India’s advocacy reform Issue Solution Advocating Adoption/ identification formulation reform implementation Growth opportunity Capactiy building Preliminarily built into Rolling basis across analysis: State through best practice the process, as state multiple issues in most submission evaluation propogation through authorities initiate the states and impact generation knowledge sharing process IMPACT OF REFORM the impact of this ecosystem through inculcating these lessons in the support provided to the states and updates made to Impacts attributed to the SSR Initiative in its first two years the framework. Indian states adapted to these challenges include: and their efforts have been recognized in the States’ Startup Ranking Exercise 2021. The comprehensive report for the • The percentage of India’s 718 districts with at least one exercise can be found online.22 start-up increased to 85 percent • The number of Indian unicorns increased from 21 to 32 in 2020 3.4 CINDE: Rapid-response advocacy • 18 states have provided seed funding to more than 1,300 start-ups to support economic growth in the • 19 states offer special incentives to 1,200+ women face of COVID-19 entrepreneurs • 610+ amendments have been made in rules and Proactive advocacy, of the type demonstrated by EIC, TG, and regulation to support start-ups Invest India is admired for its ability to attract new investors • More than 300 incubators have been upgraded by state and better kinds of investment than that which the current governments investment ecosystem has so far enticed. The Costa Rican IPA, • 10 states offer an interactive portal to startups which Coalición Costarricense de Iniciativas de Desarrollo (CINDE), include online registration and related activities also has a record of proactive advocacy, most famously when • 14 states have established partnerships with more than it successfully advocated the conditions that allowed it to 190 institutions or business enterprises for supporting attract key and strategic industries, such as semiconductor startups21 assembly and test, with Intel as anchor company.23 However, this section features a case of CINDE’s responsive advocacy. The States’ Startup Ranking exercise was further conducted The constantly-changing global landscape alters the terms in 2021 for a consideration period from October 1, 2019 to that most effectively address issues raised by existing July 31, 2021. The third edition exercise built on the founding investors, and this is also an essential component of full- principles of the previous two editions and also streamlined fledged advocacy work. Existing investors are the largest reform areas to adapt to the development of the startup global source of new FDI (that is, reinvestment) making ecosystem in India. The innovation and entrepreneurship investor retention and expansion as important an objective ecosystem were pivotal in tackling the challenges posed by as attraction of new investors.24 Expansions offer potential for the COVID-19 pandemic. The exercise has also rationalized more jobs, exports, and tax revenues from the same business 21. WAIPA. Bronze Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards. (Geneva, CH, 2021), https://www.youtube.com/watch?v=ivOm3COyaJI 22. Link to report available here: https://www.startupindia.gov.in/srf/result-2021.html 23. Spar, Debora. 1998. Attracting High Technology Investment: Intel’s Costa Rica Plant. Washington, DC: World Bank. https://documents1.worldbank.org/curated/ en/949541468770676701/pdf/multi0page.pdf 24. OECD data for 2018-2021 EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 23 lines but also the prospect of higher skills and value addition talent development, and facilities. As FTZs are geographic from new business lines. As a result, advocacy efforts should designations within the boundaries of which companies enjoy also prioritize improving and strengthening business climate special incentives, remote work had proven to be only a mild conditions, taking into consideration the global trends that issue over the years, but CINDE’s issue intake mechanisms impact company operations. flagged that the issue had become critical during the pandemic. As originally designed, and as a condition of the customs CONTEXT exemption they enjoyed upon import to the FTZ, the FTZ regime prohibited productive assets other than laptops from During the past twenty years Costa Rica has typically ranked being deployed outside the FTZ. However, in the decade among the top 20 or 30 countries in the world for FDI per since the FTZ regulations were updated in 2009, companies capita.25 The number of foreign investors makes it challenging world-wide trended toward more digitalization and remote to keep abreast of them individually. However, waiting for work. By 2019, FTZ companies surveyed by CINDE reported individual investors to raise issues risks CINDE’s missing an average of 20 percent remote work modality and that the relevant issues, discovering some too late, having a poor asset movement restrictions posed an operational challenge. sense of the sector- or economy-wide severity of an issue, From the perspective of the government’s development missing others entirely, or focusing too much on the most objectives, too, a wider scope on remote work within the noticeable issues. CINDE avoids these problems by building FTZ Regime was viewed as an enabler of FDI attraction to strong communication channels with its investors through the country’s regions external to the Greater Metropolitan standing mechanisms for the regular, systematic receipt and Area (GMA). Nevertheless, the relatively low percentage of processing of issues elicited from large samples of investors companies requesting an amendment, and, more importantly, in high-priority areas; as well as keeping a close watch on the relatively low intensity of the issue kept it from rising to transformative trends that impact businesses. CINDE uses the top of CINDE’s advocacy agenda. regular listening sessions on global tendencies, surveys of investors and participation in a number of public-private Then, in mid-March 2020, the government declared a state dialogue platforms. The deep insight CINDE has developed of emergency due to the pandemic. In the days and weeks into its investor community over the years has positioned it to come, CINDE used surveys to monitor the impact of as a strategic partner, earning invitations to sit on public and emergency regulations on investors and the evolution of private sector-related committees and task forces, including remote work. Soon, the number of FTZ-based companies the government’s emergency task force for dealing with the reporting a need to move all manner of equipment outside of COVID-19 pandemic. the FTZs, in order that staff could continue operations during lockdowns in compliance with social distancing guidelines, rose by 60 percent. I S S U E I D E N T I F I C AT I O N One of CINDE’s standing mechanisms for obtaining investor S O L U T I O N F O R M U L AT I O N issues is its seat on the government commission overseeing Free Trade Zones (FTZs), an investment promotion regime CINDE’s continual close contact with investors and monitoring credited with winning substantial FDI, export diversification, of their issues meant that the solution to the immediate issue and quality employment, and which has been fundamental to had already been clearly established as permission to move the country’s economic transformation. several assets outside of the FTZs, as might be necessary to conduct remote operations. The urgency of the situation under Considering the changing global landscape, particularly as the pandemic meant that this would have to be adopted as an accelerated by the pandemic, CINDE closely monitors the emergency regulation. operational needs of its existing investor base, including those situated in FTZs, through periodic surveys and meetings of However, CINDE’s long awareness of this issue and constant topic-specific working groups, such as human resources, monitoring of global trends made it clear that the emergency 25. Excluding pass-through economies, tax havens, and economies of under half a million people. Based on data at unctadstat.unctad.org. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 24 regulation should eventually be made permanent, and that a Today, CINDE continues to monitor the global trends on work fuller framework for remote work under the FTZ was needed. transformation and keeps in close communication with all This was done in consideration of the irreversible change in stakeholders, including the government, in preparation for the work models, and the importance of remote work as a tool to next big change. enable both more inclusive employment and FDI opportunities in regions located outside of the GMA. A D V O C AT I N G R E F O R M As soon as the state of emergency was declared, CINDE reached out to its network of partners in advocacy, including the Ministry of Foreign Trade and its customs authorities, to communicate the urgent need for an emergency regulation. Within the emergency task force set up to deal with the pandemic, CINDE worked with relevant technical experts in drafting the regulation. External to the task force, CINDE acted as the strategic liaison between the committee and the investor community, gathering feedback on the adequacy of the draft regulation. As a result of this close public-private collaboration and the successful highlighting of the urgency of the issue to be resolved, the regulation was passed within a week of the state of emergency being declared, greatly promoting continuity of business during a turbulent period. IMPACT OF REFORM During the next year and a half, CINDE continued to collect feedback from investors through its surveys and working groups, with the aims of properly monitoring their business transformation. Discovering that, overall, remote work and hybrid models have been incorporated as part of the investors dynamic in many sectors—because of its positive impacts on productivity and employee satisfaction—CINDE was able to advocate successfully for it to be made permanent and for the government to develop a modern framework for remote work under the FTZ. The formalization of this regulation as part of the FTZ provided a more comprehensive approach towards remote work and has allowed companies to implement a more ambitious recruiting process in areas outside of the GMA. As a result, during the first year of the pandemic, two important projects were announced in regions outside of the GMA under the FTZ regime, with over 2,000 open positions and a relevant remote work component. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 25 >>> Conclusion and Policy Recommendations These examples demonstrate the varying ways in which successful IPA advocacy can positively impact a country or region’s investment ecosystem, and the diversity of approaches, audiences, and partners involved and contexts within which such reforms can take place. From CINDE and EIC’s more specific issues to the broader, intergovernmental bundles of solutions in the TG and Invest India cases, these examples illustrate the variety of methods for handling advocacy cases as well as the enormous potential scope of benefit such advocacy can provide. There is no single template for success in this field. Further, the exact steps and timelines involved in issue identification, solution formulation, and advocacy may change based on the context of the necessary reform, though all of these components are clearly present in each example. All of these cases demonstrate that the key to being a good advocate is to be both a champion of investors and of national development objectives, bridging a public-private gap in a way that is valuable to both sides. The length of time that may be required to successfully advocate impactful reforms also demonstrates the importance of IPAs dedicating multi-year commitments to advocacy efforts and advocacy programs. It is also clear that partnerships and established relationships with key stakeholders within the private sector, relevant agencies and organizations is critically important for the success of advocacy efforts. Proactive aftercare programs are also a clearly important source for gathering investor insights and identifying reform issues. Lastly, these cases provide useful examples of how the various types of interventions and methods of issue identification can be tailored to local contexts, data constraints, and levels of development through innovative solutions. Advocacy services play a key role within an IPA’s overall mandate and make a critical contribution to improving the IPA’s “product” by enhancing their location’s investment ecosystem, attractiveness to investors, and competitiveness for investment promotion. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 26 References Alfaro, Laura, and Andrew Charlton. 2007. “Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?” SSRN Electronic Journal. doi: 10.2139/ssrn.981163 de Crombrugghe, Alexandre. 2019. Supporting Investment Climate Reforms through Policy Advocacy. OECD Investment Insights. Paris: OECD. https://www.oecd.org/daf/inv/investment-policy/Supporting-investment-climate-reforms-through- policy-advocacy.pdf Heilbron, Armando, and Hania Kronfol. 2020. “Increasing the Development Impact of Investment Promotion Agencies.” Global Investment Competitiveness Report 2019/2020. Washington, DC: World Bank. doi: 10.1596/978-1-4648-1536-2_ch5 Heilbron, Armando, and Yago Aranda-Larrey. 2020. Strengthening Service Delivery of Investment Promotion Agencies: The Comprehensive Investor Services Framework. Finance, Competitiveness and Innovation in Focus. Washington, DC: World Bank. doi: 10.1596/33498 Kalinowski, Tess. 2019 “Toronto Has Seen Huge Growth in the Last Decade. The Challenges Ahead Are Just as Huge.” The Toronto Star. sec. GTA. https://www.thestar.com/news/gta/2019/12/27/toronto-has-seen-huge-growth-in-the-last-decade- the-challenges-ahead-are-just-as-huge.html. Macrotrends. 2022. “Toronto, Canada Metro Area Population 1950-2022.” Toronto: Macrotrends. https://www.macrotrends.net/ cities/20402/toronto/population. Morisset, Jacques. 2003. Does a Country Need a Promotion Agency to Attract Foreign Direct Investment: A Small Analytical Model Applied to 58 Countries. Policy Research Working Paper 3028. World Bank, Washington, DC. https://openknowledge. worldbank.org/handle/10986/18230 Reichel, Marc, Robert Whyte, and Armando Heilbron. 2022. High-level Structures Supporting the Institutional Framework for Foreign Direct Investment Promotion. Equitable Growth, Finance & Institutions Insight. Washington DC: World Bank. Spar, Debora. 1998. “Attracting High Technology Investment—Intel’s Costa Rican Plant.” 1–38. Foreign Investment Advisory Service, Occasional Paper 11. Washington, DC: FIAS. https://documents1.worldbank.org/curated/ en/949541468770676701/pdf/multi0page.pdf. Startup India. 2016. “Action Plan.” Vigyan Bhavan, New Delhi: Startup India. https://www.startupindia.gov.in/content/dam/ invest-india/Templates/public/Action%20Plan.pdf. Statista. 2022. “Unicorns by Country 2021.” Hamburg: Statista. https://www.statista.com/statistics/1096928/number-of-global- unicorns-by-country/. 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EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 27 WAIPA. 2021. “Bronze Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards.” Geneva, CH. https:// www.youtube.com/watch?v=ivOm3COyaJI ———. 2021. “Gold Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards. Geneva, CH. https:// www.youtube.com/watch?v=Dd8QlcYPuzY&t=1s ———. 2021. “Silver Award | WAIPA - World Bank Strengthening IPA Advocacy Services 2021 Awards.” Geneva, CH. https:// www.youtube.com/watch?v=5NY4kqbpJ5w&t=1s ———. 2019. “Overview of Investment Promotion: Report of the Findings from the WAIPA Annual Survey of 2018.” Geneva, CH: WAIPA. https://waipa.org/waipa-content/uploads/Overview-of-Investment-Promotion-2019.pdf. Whyte, Robert, Celia Ortega Sotes, and Carlos Roberto Griffin. 2011. Investment Regulation and Promotion: Can They Coexist in One Body? Investment Climate In Practice. Washington, DC: World Bank. http://documents.worldbank.org/curated/ en/832851474483734837/Investment-regulation-and-promotion-can-they-coexist-in-one-body World Bank Group. 2020. “2020-2021 Global Investment Competitiveness Report: Rebuilding Investor Confidence in Times of Uncertainty.” Washington, DC: World Bank Group. https://openknowledge.worldbank.org/bitstream/ handle/10986/33808/9781464815362.pdf?sequence=4&isAllowed=y. ———. 2022. “Explore Economies – Ethiopia.” Washington, DC: The World Bank— Doing Business Archive. https://archive. doingbusiness.org/en/data/exploreeconomies. EQUITABLE GROWTH, FINANCE & INSTITUTIONS NOTE <<< 28