Simple, Effective, Transparent Regulation: Best Practices in OECD countries

Cesar Cordova-NovionDeputy Head of Programme Regulatory Reform, OECD

Regulation and Regulatory Management

Regulation is the most widely used policy instrument of governments

Regulation creates benefits and costs for society

Ensuring high quality regulation has become a key priority for OECD governments

Development of the OECD regulatory quality concept

A decade of experience and analysis, in terms of Economic structural adjustments Social cohesion Good governance

Three Stages of Regulatory Reform

Policy Objectives of Reform Managing aggregate

regulatory effects Setting frameworks Improving flexibility in

regulatory regimes

Producing effective andLow cost quality regulations Improving regulatory

processes Improving access to

regulations

Elimination, Reduction, Simplification ofregulations

Characteristics of Reform System-based Pro-active

Instrument-based Pro-active, Focus on quality, but

one instrument at the time

Instrument-based Reactive

REGULATORYMANAGEMENT

REGULATORYQUALITY

IMPROVEMENT

DEREGULATION

Strategies for Assuring Regulatory Quality

I. Building a regulatory management system Regulate the regulators through transparency and accountability

mechanisms

II. Improving the quality of new regulations Control of the flow

III. Upgrading the quality of existing regulations Control of the stock

I. Building a Regulatory Management System

1. Adopt regulatory reform policy at the highest political levels

22 countries have published a quality regulation policy

2. Establish explicit standards for regulatory quality and principles of regulatory decision-making

18 countries have explicit principles of good regulation

3. Build regulatory management capacities 20 countries have a dedicated body (or bodies) consulted

when developing new regulation– 12 of them assess RIAs– 9 dedicated bodies annually report progress of individual

ministries

The OECD Reference Checklist for Regulatory Decision Making

Is the problem correctly defined? Is the government action justified? Is regulation the best form of government action? Is there a legal basis for regulation? What is the appropriate level (or levels) of government for

this action? Do the benefits of regulation justify the costs? Is the distribution of effects across society transparent? Is the regulation clear, consistent, comprehensible and

accessible to users? Have all interested parties had the opportunity to present

their views? How will compliance be achieved?

II. Improving the Quality of New Regulations

4. Regulatory Impact Analysis In 12 countries RIA is required before adopting a regulation

5. Systematic public consultation procedures with affected interests

In 14 countries consultation with affected parties when preparing subordinated regulations is mandatory

14 countries publish draft laws under a system of ´notice and comments´ (13 in the case of draft regulations)

8 countries (7 through the Internet) mandatory publish a list of draft subordinated regulations

6. Using alternatives to regulation Specific guidance to assess alternatives has been implemented

in 11 countries

7. Improving regulatory co-ordination In 14 countries the competition authority is usually consulted

Aspects of RIAs

11

7

11

4

8

4

13

11 11

9

11

7

0

2

4

6

8

10

12

14

Num

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f cou

ntrie

s

19982000

RIA for draft bills

RIA for subordinated regulations

RIA quantifies costs

RIA quantifies benefits

RIA shows benefits higher than costs

RIA publicly consulted

III. Upgrading the Quality of Existing Regulations

(in addition to the strategies listed above)8. Reviewing and updating exiting regulations

Automatic review requirements of specific laws are used in 18 countries.

Only in 5 countries a periodic evaluation of existing regulations is mandatory for all laws.

9. Reducing red tape and formalities Initiatives to improve business licences and permits ‘silence is consent’ rule in 8 countries one-stop shops in 13 countries ongoing review programme in 13 countries

In sum Regulatory Reform means

Improving the quality regulation through a mix of regulation, deregulation and re-regulation

Implementing and enforcing a regulatory management and reform programme based on: Principles and Policies Institutions (i.e. budget and resources for

control unit) Incentives (i.e. positive and negative) Tools (RIA, consultation, communication,

alternatives, periodic reviews etc.)

To know more on OECD Regulatory Reform

Programme

http://www.oecd.org/subject/regreform/