China - Economic Law Reform

 ICRR 12159 Report Number : ICRR12159 ICR Review Operations Evaluation Department 1. Project Data: Date Posted : 07/26/2005 PROJ ID : P003647 Appraisal Actual Project Name : China Economic Law Project Costs 13.30 12.50 Reform US$M ) (US$M) Country : China Loan/ US$M ) 10.00 Loan /Credit (US$M) 9.43 Sector (s): Board: PS - Law and Cofinancing - - justice (76%), Tertiary US$M ) (US$M) education (24%) L/C Number : C2654 Board Approval 95 FY ) (FY) Partners involved : Closing Date 06/30/1999 06/30/2004 Prepared by : Reviewed by : Group Manager : Group : Rene I. Vandendries Fareed M. A. Hassan Laurie Effron OEDCR 2. Project Objectives and Components a. Objectives The project was designed to assist China in developing its legal framework to facilitate the move to a market economy. The specific project objectives were : (a) to strengthen the preparation of economic legislation in priority areas; (b) to support legal training; and (c) to strengthen key legal institutions responsible for legislation and the implementation of economic laws. b. Components The project had three components : (i) The legislative component supported the preparation of laws and their supporting regulations and implementing rules. Each legislative subproject consisted of a package of technical assistance, designed to provide comparative legal experiences and advice . (ii) The training component provided support for activities that would either have a broad impact on teaching, training or implementing economic laws, or demonstrate innovative approaches to meeting the changing needs of the legal profession in a market economy . (iii) The institutional support component would provide targeted assistance to key legal institutions, including the National People’s Congress Commission on Legislative Affairs, the State Council ’s Bureau of Legislative Affairs (subsequently renamed the Office of Legislative Affairs ), and the Ministry of Justice. Office modernization and development of databases were important objectives . At mid-term the project's legislative component was broadened at the request of the Government to include an expanded legislative agenda brought about by China's accession to the WTO . The institutional component was also broadened to include access by the public to the legal information network system through the internet, study tours, and support to the judiciary . c. Comments on Project Cost, Financing and Dates The credit was almost fully disbursed . The closing date was delayed by 5 years, following 3 extensions. There were several reasons for the delays, including the 1997 Asian financial crisis which diverted attention, the accession to the WTO, the Ministry of Finance’s reluctance to provide grant funding to some of the project entities as had been agreed originally, and civil service reform which affected staffing of subprojects . But the delays helped ensure that all project objectives were implemented and allowed the Government to deal with WTO accession which necessitated adjustments in legislation. 3. Achievement of Relevant Objectives: The project achieved its objectives . It successfully supported (a) the drafting of more than 50 pieces of legislation, necessary for the functioning of a market economy, including, among others, bankruptcy, property, contract and intellectual property laws; (b) five training institutions that met the output targets and provided training to public officials, private lawyers and businesses, and judges; the largest expenditure under this component was for library materials, databases and online legal reference materials; and (c) reform and strengthening of some key institutions through, among others, modernization of document processing and circulation, and introduction of a legal information network system accessible to provinces, directly administered cities, and other large cities . 4. Significant Outcomes/Impacts: Probably the most significant outcome of this project is the preparation of major economic laws, presented to the National People’s Congress, which is allowing China to integrate into the international market system . This legal work was greatly facilitated by exposure to international experience and expertise and also profited from public participation through the institutional development component, all made possible by the project . At the same time, thus far, only about 13 of the laws have been enacted, with the majority still in draft status . 5. Significant Shortcomings (including non-compliance with safeguard policies): The absence of outcome indicators in project design translated into a focus on monitoring physical inputs and outputs, thereby making a full assessment of the project ’s outcomes and achievements impossible . Thus, for example, it is not possible to judge whether the training and the unified examination system have led to improving the efficiency of the judiciary system . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Institutional Dev .: Substantial Substantial Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory NOTE: NOTE ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness. 7. Lessons of Broad Applicability: (i) The lack of an adequate monitoring and evaluation system does not enable a complete assessment of the achievements of this project . (ii) Public participation in the drafting of legislation promotes a better understanding of practical issues that need to be addressed in the laws. (iii) When there is full government commitment, project implementation through existing government structures greatly increases the chances of success and sustainability of the project . 8. Assessment Recommended? Yes No 9. Comments on Quality of ICR: The ICR is clear, straightforward, informative and complete .