OECD conference rethinks outcomes of regulatory policy

It seems hardly worth blogging about the OECD conference “Regulatory Policy at the Crossroads: towards a new policy agenda”, considering that among the some 330 delegates, most members of our expert community were there and are capable of drawing their own conclusions. However, some may have not been able to make it to Paris on 28-29 October, and pending the official report, here are some personal thoughts.

The conference was very rich in content, and covered all the current dimensions of the theme, with a real attempt to map out new directions for further development. With its new concept, smart regulation, the European Commission was perhaps at the core of the most significant trend. Cooperation between this institution and OECD was also highlighted with the launch of the “EU15” series of BR reviews. All the key European players were supporting the event: Bertelsmann, the European Belgian Presidency, the Swedish NNR.

Bearing in mind previous similar events (such as the Bertelsmann Nov 2009 conference and its 2008 predecessor) what new ground was broken? My answer would be the adjustment of regulatory policy to deliver updated policy outcomes.

• The first consequence is the increased relevance of ex-post evaluation as a prerequisite step for new legislation. It is the most significant change in the newly developed “smart regulation” of the Commission, and it was suggested it became even become stage 1 in the regulatory cycle (or loop) that we could now close. The idea had already been brought up in 2009, but is now coming of age. Similarly J. Dodds (from the UK) pointed out that better regulators had to focus more on policy outcomes, to justify the resources devoted to regulatory management. This idea is linked the UK “benefits of regulation” project.
• The second consequence is the stress on regulatory policy’s possible contribution to updated outcomes, such as innovation and green growth, as underlined by the Secretary General Angel Gurria in his introductory speech. “Both innovation and green growth are high on the policy agenda, and rightly so. (…) In both areas, regulatory policy has a key role to play. Good regulation enables innovation. It favours the growth of highly innovative small firms, by cutting red tape and administrative burdens. But what kind of regulations will foster green growth? This is one of the topics for discussion at this conference, where we are bringing together experts from the environmental and regulatory policy communities”.

At a more technical level, the conference did broach some other topics that may not have been addressed before with such force: “mapping sustainability” (=long term impacts), “governance in regulatory oversight”, social impacts of regulations.

 

 

 

 

British pubs bogged down by red tape

BR experts looking for catchy examples for their powerpoints can take another look at the BRE’s proposals to cut admin burdens on “micro-pubs”. The Better Regulation Executive has told Lord Young, the new “enterprise tsar” appointed earlier this month, that pubs are one sector that could do with a helping hand. The group consulted the industry (see BII site on red tape for pubs) and attended a Pubwatch meeting in Enfield. The BRE report already mentioned on this blog, Lightening the Load,  concludes: “We found that micro pubs [run by a single person] have a particularly high regulatory burden — they have to be registered with around five agencies, have around eight licences of various kinds and have to keep written records for National Minimum Wage, PAYE, food safety and refusals of underage sales”.

Ireland welcomes OECD BR review

While all of Europe is anxiously watching Ireland the Irish PM has endorsed OECD’s view that BR can help his country exit the economic crisis. See press release which shows the government wants to harness the potential of BR. “Noting that in many areas Ireland compares well with its European counterparts, the Taoiseach acknowledged that a greater engagement with the agenda is needed across the Government system. Referring to the need for strong linkages between this agenda and economic renewal and public service transformation strategies, he stated, "it is clear that Better Regulation has a key role to play in our efforts to improve competitiveness and reinvigorate the economy. Initiatives in this field are already contributing to better and clearer legislation and improved regulation of key sectors of the economy but further improvements are needed”

Deregulation à la française

This blog reported in March that the French president, Mr N. Sarkozy, was personally committed to some deregulation, seemingly far ahead of all other politicians in France on this topic.Two more public remarks show that Mr Sarkozy is not forgetting this dossier and wants change before the end of his mandate:

• During his live TV interview on 16 November, while listing policies for the last two years of his administration, and in a short list of four topics, he mentioned deregulation (in French “délégiférer”) but without using the word, giving a specific example of town planning. Strangely, this item was absent from all reports of the event published by the media and was only quoted in Le Monde’s pre-event analysis;
• Two months ago, he had been more explicit in a public speech where he said he was reflecting on the possibility of asking Parliament to take time in 2011 to devote time to rescind obsolete laws. He compared the legal corpus to a “legal cathedral… where no-one can find the exit”.

We know that France has for some time been primarily sensitive to "normative inflation". The president's approach is in keeping with recent simplification laws and is mainly directed at clearing the legal body and improving access to the law for citizens.

For legal experts: automatic transposition

This blog has been informed about a new development of IT in support of Better Regulation:  Dr Alain Souloumiac , Chairman and Managing Director of DirLab has developed and tested an innovative method of achieving better legislation, tapping ICT power. The new application claims to ensure rapid, accurate and uniform transposition of inter alia EU directives, while simultaneously integrating stakeholder participation, mutual evaluation, tables of correlation and follow-up. DirLab claims that the system is now ready for use, and that MEP Alain Lamassoure is supporting its introduction through the European Transposition Centre (ETC) and its network for transposers, EuRefer, which are presently being established. You are invited to visit the website at http://dirlab.eu/ to examine this new state-of-the-art, hands-on, better regulation tool, and give below your impressions for the network.

NZ business disappointed by regulatory reform

Continuing our tour of BR in far-off places, here is New Zealand, a country known since the 1980s for its commitment to regulatory reform. New Zealand has historically experienced cycles of economic de- and re-regulation and debate has tended to focus on the heavy or light-handedness of settings. After a period of significant deregulation and public sector reorganisation in the 1980s, the emphasis of regulatory policy is now on quality management and the maintenance of robust regulatory frameworks across all sectors. A Productivity Commission was established in 2010.

Red tape reduction was launched in 2009 but has not yet yielded its full potential. A government long term report stated "as much as a third of the income gap to Australia could be closed if we were able to move New Zealand to world best practice across all the major areas of regulation". Voluminous new legislation continues to be issued. Though NZ  scores well in some international surveys such as the World Bank's Doing Business index,  the effects of regulations such as the Resource Management Act or the regulation of network industries, are not covered. Business representatives claim that New Zealand scores poorly in surveys for the restrictiveness of hiring and firing regulations. Though a number of measures have been taken recently, for instance for minor construction authorizations, or marketing some pharmaceutical products, cutting red tape for business is not sufficiently high on the agenda. See business forum communiqué.

OECD and ASEAN cooperate on regulatory reform

Regulatory reform, under the denomination of Better Regulation, has greatly contributed to European economic integration. Has its potential been recognized and tapped in other regional groups? While the Asia-Pacific countries (associated in APEC) have been discussing BR since 2000, the South East Asia countries started more recently, in 2007. In both cases, these groups tapped OECD experience and exchanged best practices with its member states.

The APEC countries recognized that regulatory reform contributes efficiently to the promotion of open and competitive markets, and can be a key driver of economic efficiency and consumer welfare. As a result, APEC and OECD agreed a Co-operative Initiative on Regulatory Reform in 2000 and jointly issued in 2005 an Integrated Checklist for self-assessment of regulatory, competition and market openness policies, to build domestic capacities for quality regulation.

More recently, the ASEAN countries have engaged a similar dialogue with OECD since 2007. To date, ASEAN and OECD have organised two regional forums to strengthen cooperation between the two organisations:

• the 1st OECD-Southeast Asia Regional Forum on “Peer Review Mechanism for Policy Reform” in January 2007 in Jakarta,
• the 2nd OECD-Southeast Asian Regional Forum on “Enhancing Competitiveness through Regional Integration” in April 2009 in Bangkok.

A seminar on Challenges in Cooperation and Communication for Development in Southeast devoted to “Aid Effectiveness & Regional Economic Integration Asia” was held on 26-27 April 2010 in Hanoi, Viet Nam.

Other joint-activities include “ASEAN Special Dialogues with the OECD” in October in Paris and the coming “ASEAN-OECD South East Asia Investment Policy Conference” 18 -19 November 2010 in Jakarta. Preparations are also underway for the joint collaboration on the “Southeast Asian Economic Outlook Report” in 2012.

Regulatory reform has been identified as a specially promising tool to bring about greater economic integration and competitiveness. At their meeting in August 2010 in Da Nang, the ASEAN economic ministers agreed to an “ASEAN Regulatory Reform Dialogue” at the senior economic officials’ level early next year to address some of the issues starting with trade facilitation, services liberalization and investment facilitation.

In the meantime, as announced by Secretary General of the OECD, the Organisation will co-host the first ASEAN-OECD meeting on regulatory reform in Hanoi on 25-26 November.

UK: new report by BRE on SMEs

The UK Better Regulation Executive has just published a new report on "Lightening the load: The Regulatory Impact on UK's Smallest Businesses" which confirms many things we know about burdens on small companies. Some points developed in the report:

Businesses with fewer than 10 employees account for 96 % of UK businesses and around 7 million jobs. They are disproportionately affected by regulation, for instance SMEs may be spending almost six times more than larger ones on risk assessment. The study team interviewed 500 micro businesses, from which three key themes emerged:

Frustration - there are significant levels of frustration with the extent of regulation, the pace of regulatory flow and the expectation by government that a single business owner can cope with the cumulative array of regulations.

Complexity & Misunderstanding - a range of regulatory areas place a huge cumulative burden on micro businesses. For example, because of the complexity of employment law and the challenges of its implementation some businesses actively avoid recruiting and expanding.

Tax system – Although outside the scope of this project, the theme was often viewed as very close to regulation (both are seen as government intervention).

Two underlying issues emerged. 1/ Policy makers are still not 'thinking small first' when designing and implementing regulations. 2/ The level of managerial capability in micro businesses is a key constraint.

The Government is expected to present new measures within its better regulation policy.

Victoria slashes red (and green) tape

For yet another example of determined action to reduce administrative burdens, see what the State of Victoria (Australia) has been doing.

“Along with Denmark and the Netherlands Victoria is one of the world’s leaders in cutting red tape. This is one of the ways we have kept the worst of the Global Financial Crisis from crossing the Victorian border” says proudly the Treasurer (minister of finance) summing up his Government’s Reducing the Regulatory Burden initiative, now into its fifth year and credited for delivering over $401 million worth of red tape cuts per year. As in other countries, some stakeholders remain skeptic, as for instance the Victorian Employer’s Chamber of Commerce and Industry (VECCI) which calls for further measures to simplify procedures related to tourism, and address  “green tape” (environmental protection-related paperwork).

French PM appoints simplification czar

As announced on this blog, the French Prime Minister, Mr Fillon,  had decided to appoint a commissioner in charge of checking planned legislation for new administrative burdens.

The name of the incumbent of this new position has been made public: Mr Rémi Bouchez belongs to the Conseil d'Etat, the highest administrative court, and has contributed to compiling the "guide de légistique" which is the bible of all French drafters of regulation, with its emphasis on formal regularity. He will need to adopt the wider "better regulation" approach, including the economic perspective, to meet the requirements of his new mandate.
See previous post and today's press release.
The press release also confirms the search for common commencement dates, to be enforced by Mr Bouchez, and the moratorium on new regulatory burdens on local authorities.

Decentralisation and regulatory governance in France

 The French model of public governance is generally viewed as based on the principle of unity of the territory and centralization of the normative power. This slightly obscures the amount of devolution to regional and local entities, which has been actively pursued for over 200 years under the concept of “décentralization”. This blog has reported the discussion of the most recent bill reforming the distribution of competences between the various levels of government.

Fuelling this interesting debate, the “institut de la décentralisation (a think tank on public action at subnational level) published last week a report, unfortunately not on-line, entitled “public governance: consequences of a regional legislative power on public policies.”

The theme will be discussed in an evening seminar on 15 November, and the current issue of “Pouvoirs Locaux”  includes a very thorough dossier on the a desirable “territorial differentiation”  and its legal impact.