Unpredictable Laws in Jordan: Exploring Economic Risks and Regional Policy Recommendations

The study examines Jordan's high rate of legislative unpredictability, where 10-15% of laws are modified within 24 months, posing challenges to economic stability and offering insights for broader application across the MENA region. The research highlights the importance of improving legislative stability to foster a conducive environment for growth.

A comprehensive research by Mihaly Fazekas from the Department of Public Policy at Central European University, Dominik Brenner from the Government Transparency Institute, and Peter Ladegaard from the World Bank delves into the issue of legislative predictability, a critical aspect of high-quality legislation, which is fundamental for ensuring a stable environment for businesses and individuals. In Jordan, where the frequency of legislative modifications is notably high, this unpredictability poses significant challenges for both economic stability and governance.

A New Approach to Legislative Predictability

The research proposes a novel big data analytics approach to measure legislative predictability, focusing on Jordan as a case study, with broader implications for the Middle East and North Africa (MENA) region. Legislative predictability is crucial because laws and regulations are the primary tools through which governments implement policies and achieve objectives. However, when these laws are frequently and suddenly modified, it creates an unstable environment that can deter investment and economic growth. In Jordan, the study found that around 10 to 15 percent of laws are modified within just 24 months of their enactment, a rate higher than in many other countries. This high rate of modification indicates a level of unpredictability that can lead to increased costs for businesses and citizens, as they must constantly adapt to new legal requirements.

Insights into Jordan's Legislative Environment

The study’s approach involved gathering legislative data from Jordan’s Legislation and Opinion Bureau, focusing on the frequency and timing of modifications to laws and regulations. The findings revealed that Jordan’s legislative environment is characterized by both short-term and long-term unpredictability. In the first 24-30 months after a law is passed, there is a high risk of modification, a trend that is consistent across many countries. However, in Jordan, this risk does not diminish as it does in other nations. Instead, after about four years, there is a resurgence in legislative modifications, indicating a persistent level of uncertainty even in the long term.

Sector-Specific Vulnerabilities

One of the key insights from this research is the identification of sectors that are most affected by legislative unpredictability. In Jordan, laws related to education and healthcare are particularly prone to frequent modifications. The study also examined the role of different legislative initiators, such as government ministries, and found that certain initiators are more likely to produce laws that are quickly modified. For instance, the Ministry of Higher Education and Scientific Research and the Ministry of Health were among the top initiators whose legislation was often modified within 24 months. This suggests that certain sectors and government bodies might be contributing more to legislative unpredictability due to the nature of the laws they produce or the specific challenges they face.

Extending the Analysis to the MENA Region

The research further explored the possibility of applying this legislative predictability measurement approach to other countries in the MENA region. A detailed mapping of data availability across ten MENA countries revealed varying levels of transparency and accessibility. For example, countries like Qatar, Saudi Arabia, and Tunisia were found to have relatively robust data sources that could support similar analyses, while others, such as Iraq and Djibouti, had more limited data availability. This variation in data quality and accessibility presents both challenges and opportunities for extending the research beyond Jordan.

Implications for Policymakers

The implications of this study are significant for policymakers in Jordan and the broader MENA region. High legislative unpredictability can undermine business confidence, deter investment, and ultimately slow economic growth. By identifying the factors that contribute to legislative modifications and understanding the patterns of these changes, governments can take steps to improve legislative stability. This could involve enhancing the quality of law-making processes, and ensuring that laws are clear, precise, and less prone to frequent amendments. Moreover, the study suggests that adopting better regulatory management systems, such as Regulatory Impact Assessments (RIA), could help increase legislative predictability and thereby foster a more stable and conducive environment for economic development. As Jordan and other MENA countries strive for economic growth and stability, improving legislative predictability will be a critical step in achieving these goals.