Institutional Assessments:Emerging Best Practice in Sustainable Economic Community Investement

CIM Vancouver 2010
Roxanne Scott,
Abstract Mining companies can find themselves operating in developing economies where there is a lack of clarity on central and local government roles and functions (undermining local governments’ ability to effectively carryout effective economic development), weak local government capacity, and poorly define systems of fiscal transfers (limiting local government resources and investment capability). Emerging practice shows that targeting a company’s investment in local economic development can be facilitated by understanding this policy and institutional environment, and how it affects sustainable economic development and growth over the long term. This includes knowledge of:

• administrative and fiscal arrangements between national and local governments;
• functions, responsibilities and capacities of various levels of government,
• national and local poverty reduction strategies, goals, and performance targets,
• Sources, sufficiency and predictability of funding to support economic development and poverty reduction strategies at the national, regional and local level

Such policy and institutional analysis can inform mining companies of economic development needs and priorities of regional and local governments, funding sources and gaps; opportunities to harmonize project goals and performance targets with host government development goals and initiatives; and opportunities to leverage community investment cost sharing, technical expertise and capacity building partnerships with government and donor agencies, NGOs and the private sector.

This paper outlines steps of an “institutional assessment” as supportive tool for sustainable community and economic investment planning, and provides examples of how this tool is helping mining companies effectively target sustainable investments that are integrated with, and support local and national governments’ economic and social development strategies.

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