This independent blog collects news about projects or achievements in regulatory reform / better regulation. It is edited by Charles H. Montin. All opinions expressed are given on a personal basis.
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19 December 2011

US regulatory reform goes into overdrive

Last week the House of Representatives passed two far-reaching regulatory reform bills long sought by many in industry, though the White House has vowed to veto both bills.
On Friday, the House voted 253-167 for the Regulatory Accountability Act (H.R. 3010), a major reworking of the 1946 Administrative Procedures Act. It would codify requirements on agencies to pursue earlier public outreach, improved scientific data, less closed door regulating, more built-in cost benefit analysis and more formal reviews of evidence of the effects of proposed "high-impact rules" costing more than a $1 billion.
On Thursday, the House voted 263-159 for the Regulatory Flexibility Improvements Act (H.R. 527), which would require agencies to step up efforts to identify costs that new regulations could impose on small businesses, write the regulations in ways that reduce costs and increase input from small businesses in the process.

Denmark unveils smart regulation agenda for next 6 months

Last Friday, the Danish incoming EU presidency unveiled its priorites and a dedicated presidency website went online. Within the green growth agenda, it is likely that Smart Regulation will receive a fresh impetus. This can be inferred from a speech, earlier this month by the Minister for Business and Growth, Ole Sohn, at the conference “Directors and Experts of Better Regulation”, held on 8 December in Copenhagen, (text avaiblle online.)
(Extract) "In dealing with this crisis, we must find a way out that creates jobs and growth all across the EU. Getting the economy back on track will be of benefit for everyone in the EU.
Smart regulation can be part of the answer when it comes to creating smart, sustainable and inclusive growth, as set out in the Europe 2020 strategy.
But at the same time we must keep in mind that smart regulation as a policy area is not an end in itself. The agenda has a higher purpose. The principles of smart regulation only result in added value when they are used in a targeted way to bring about overall policy goals, such as competitiveness and growth.
When smart regulation is put into practice we see considerable effects. More resources are set free for business to devote their time to core activities instead of doing unnecessary paper work.
And one thing we have to remember: A smooth business environment with few administrative burdens is key to creating an attractive business environment.
Doing business in Europe has to be simple. We have to understand that the level of burdens is an important parameter, and a key element in encouraging start ups and attracting foreign business.
In short, we must simplify while making sure that we do not put fundamental levels of protections at stake. "
The two prominent features of the Danish approach are: 1/ a focus on the "end user" and 2/ a broader perspective including the full regulatory cost.

UK makes specific proposals to simplify EU law

On 29 November 2011 the UK Government published areport, Let's get down to business: smart regulation, more growth, better Europe (PDF, 1.9 Mb) , on the conclusions of a review conducted since March 2011 on ways to improve European growth opportunities for UK businesses. The report includes detailed reform proposals submitted in the form of case studies by leading companies surch as Balfour Beatty, GlaxoSmithKline, Kingfisher and Tribeka Limited. The case studies are intended to illustrate the UK proposals, which view European growth as conditioned by a reform of the EU regulatory framework to reduce overall burdens.
The key messages from the UK businesses, as recorded by BIS, include the need to reduce the overall European regulatory burden, foster innovation and ensure the internal market realises its growth potential For context (the wider Better Regulation agenda), see the BIS policy page on the topic.

15 December 2011

Admin burden in EU: what next?

Last week the four European independent regulatory "watchdogs" in DK, NL, GE and UK have published an important joint paper entitled "The end of the Commission's action programme for reducing administrative burdens in the European Union - What comes next?"
These advisory bodies take the view that "in times of economic and financial crisis, political support for the EU is liable to decline. Transparent procedures and smart regulation are needed more than ever to drivecompetitiveness and support of the EU as a positive institution for growth.
They suggest that "the EU should continue to reinforce its programmes on smart regulation. As the Action Programme for reducing administrative burdens will end in 2012, a new programme needs to be developed to keep the momentum. Some progress has been made so far, but there is still quite a way to go. A change in the mindset, a cultural shift towards smart regulation as a basic prerequisite of proposed legislation has not yet been reached."
The paper draws lessons from the Smart Regulation agenda initiatives over the recent past: for admininistrative burdens, it notes the 31% reduction proposals from the Commission and recommends widening the scope of the programme to the overall regulatory burden; for impact assessments, it points at a number of "inconsistencies" of current efforts and suggests improvements in the consultation and quality check; to support progress, it recommends extending the mandate of the HLG of independent stakeholders ("Stoiber Group") to advise all three institutions on the full range of smart regulation issues.
For more see DG Enterprise and Industry site on smart regulation which includes a section on the Stoiber Group.

EU Council supports Commission SR proposals

Though devoted principally to economic governance and employment issues (see also statement of the heads of state and government), the European Council on 9 December restated its commitment to growth, in which smart regualtion, and particularly the reduction of administrative burdens, has a role to play.
The Council conclusions recalled key priorities for growth, identified in October 2011, "in particular, the Single Market Act, the Digital Single Market and the reduction of overall regulatory burden for SMEs and microenterprises," and called the legislator to fast-track the Commission's proposals. It also endorsed the actions proposed by the Commission in its report on minimising regulatory burdens for SMEs.
Regulatory impact assessment was also discussed at a 30 November ECOFIN council, in which member states "underlined the need for the Council to consider, where appropriate and necessary, the impact assessment of new legislative proposals on competitiveness and public finances without prejudging the importance of their social and environmental impacts."

6th progress report of public policies review (France)

Yesterday the Council of Ministers heard a report about progress of the general review of public policies (RGPP), the major initiative under way since 2007 to reform public administrations in France. Our interest will be in the list of measures taken under the general heading "improve the quality of public services." This programme includes structural reforms (such as the creation of one-stop-shops and reducing the number of departmental offices at the local level) and an impressive list of 100 simplification measures reducing red tape for citizens and businesses over three years. The emphasis is on electronic procedures, which now cover most of the most current benefits. Success of the programme is claimed from the results of regular satisfaction surveys ("perception of complexity") rather than measuring the reduction of burdens. Some of the simplifications require the amendment of legal clauses. Another major component of the RGPP is the reduction of public spending through staff reductions (150.000 positions suppressed over 5 years by not replacing one out of two staff on retirement) and increased productivity. The full report (300 pages) draws a complete picture of administrative reform, distinguishing cross-cutting issues and departmental reforms. It also reads as the final report of this goverment's modernisation plans for the public sector, in the run-up to the elections in the first part of 2012.

14 December 2011

Common commencement dates launched in France

As mentioned before on this blog, the French government has set up a tool to help businesses cope with the regular flow of new legislation by making sure that they have at least 2 months to become aware of the new norms and adapt if need be, and by reducing the number of commencement dates in the year.
Full explanations of the scheme are online in a new rubric on the governement's legal portal Legifrance.
A first table offering a summary of the new legislation, by commencement date, has also been published online, with a legal disclaimer.

Open consultation now operational (France)

As reported in a previous post, the 5th simplification law adopted in May 2011 introduced the possibility for administrations to replace a legally obligatory consultation of a standing advisory body by an "open consultation" using the internet, prior to finalising new legislation (article 16 of the law dated 17 May 2011). The implementation text (décret) has now been adopted (dated 8 December). It specifies that the reform applies from 1 January 2012 and provides for a centralised publicity for such consultations. Not mentioned in the aforementioned previous post: by law, the minimum duration of an open consultation is 15 days. A good comment by a French expert highlights the wordy by poor content of the text which does not promote a culture of consultation but only organises it legally.

06 December 2011

Red Tape closely associated to corruption (Philippines)

According to news from the Philippines published yesterday, the struggle against red tape, closely linked to fighting corruption, is active though according to the Doing Business index, the country is still losing ground at 136/183, a region where it has been stuck since the beginnings of the ranking.
A press report yesterday gives some details about how the government combats bureaucracy, on the legal basis provided by the Anti-Red Tape Act (Arta) of 2007: among other tools, the Civil service commission conducts a Arta Report Card Survey at regional level (RCS) to gather feedback on how agencies, including local government units, follow provisions of their Citizen’s Charters. The RCS also rates the agencies performance and clients’ satisfaction in relation to frontline service delivery. Results of the survey may be used by the agencies in improving or modifying their frontline services and Citizens Charter.
The Philippine Public Transparency Reporting Project (a Human Rights group) gives some background about the main item of legislation (Arta), which was introduced in 2007 in an attempt to make government services more business-friendly and help stamp out corruption. One of its most salient provisions is to automatically grant requests for renewal of licenses, permits and authorization should a government office fail to act within a prescribed period. The Anti- Red Tape Act was in fact only the latest in a long line of attempts to address inefficiencies and corruption in government services in the Philippines. They included the "People First, Not Later" program in 1994 which encouraged a client who is dissatisfied with the service of a government office to file a complaint at the Civil Service Commission. The Commission was supposed to ensure immediate action is taken to investigate and resolve the complaint. The “People First” campaign was later reinforced through the program TEXTCSC where citizens were invited to report irregularities and allegations of corruption in public service to the CSC simply by texting 0917-TEXTCSC. Transparency Reporting describes in detail how the "fixer" system works (fascinating), and concludes: "More than a decade after these programs were launched, the general public sentiment is that the quality of government service has improved very little if not actually worsened." For other measures in PH, see posts dated 11 September and 19 August.

Delivery: the new challenge for smart regulators?

Not really but there is news on the topic.  The new term ("delivery") is being brought in to focus the issue of "enforcement and compliance of regulation" on outcomes, especially in the business world. Regulation is perceived as a service authorities deliver to society. Local Better Regulation Office (LBRO) members posted on the Smart Regulation LinkedIn group news of the publication of an interesting report by the Department of Business, Innovation and Skills (BIS) on "Delivering Better Regulation." This report, well worth reading, summarizes the responses to a consultation on the future of the LBRO, especially in relation to its transfer into BIS, "to make greater use of its experience and expertise as part of the core policy-making of the Department."
The UK experience with LBRO was quite unique in providing this delivery and service role for regulation, which will be preserved in the new structure.
Among the comments received on LinkedIn: Oscar F. reminds us that "NNR ( www.nnr.se  ) presented a study on the need for Better Regulation on the local level in Sweden a few months ago. Next step towards Better/Smarter Regulation needs to focus more attention to regulations on local level as well as the use of "Goldplating " within the EU."
Smart Regulation in its EU version equally places emphasis on the full cycle of regulation, including implementation, and emphasises the transposition and application of EU law.
OECD did some gathering of good practices some years back: chapter 5 of "Regulatory policies in OECD countries" (2002) defines "tools to improve implementation of regulations." (only on a WB site.) More recently, it included an indicator in Government at a glance 2011, (see page 162 indicator "preparing for effective compliance and enforcement of regulations) which contains an interesting table showing which member states have an enforcement policy.) Now a new stream of projects on enforcement and compliance has been launched.
The World Bank, in keeping with its development of business approach, focuses on modernising and making more effective inspections. A kind of manual is offered by "How to reform business inspections: design, implementation, challenges" (main author Florentin Blanc, see his March 2011 ppt for an introduction.)

02 December 2011

US goes back to basics of (drastic) RR

A major discussion has been going in past weeks in Washington about the nature and extent of a new wave of regulatory reforms. There is too much information and opinion online for this blog to summarize. But it is by our standards a major event, and interested experts are invited to check it out, for potential new insights. An apparently objective introduction is provided by an online article in the Washington Post.
What is most striking for us observers is the intensity of the attack on regulation, which makes the UK deregulation unit look moderate.
For a detailed presentation of the draft Regulatory Accountability Act, one of the new texts under consideration, see an article from the Heritage Foundation.

New package for the business environment (France)

This week's Council of Ministers heard a report by the minister in charge on the package of 80 measures in favour of business. Most of them originate in the feedback received during the Assises de la Simplification on 29 April. The most innovative is the creation of an "electronic safe" where companies can store information often requested by administrations, to avoid multiple submission of the same data. Another ground-breaking initiative is the possibility for firms to get a legally binding position from the administration on a permit or authorization scheme, prior to taking a corporate decision. Statistical requirements are also being reduced. About three quarters of the measures have been implemented on schedule, 30 being subject to amendments of existing legislation (see bill adopted by the National Assembly, now in the Senate). A new package, stemming from a parliamentary report, will be presented on 6 December, when a second session of the Assizes will be held. The invitation to the press was published yesterday.

Accountants criticise EC plan for SMEs

Friend of the network Manos draws our attention to his organisation's reaction (published today on Euractiv) to the recent report by the Commission on relief from EU law for SMEs (23 November). Under the title "Smart regulators must be able to tell regulatory burdens from regulatory capital," the Association of Chartered Certified Accountants (ACCA) points out that the Commission's inititatives on exempting small businesses from individual regulations risk misinterpreting the needs of SMEs and introducing "two-tier markets". This viewpoint is based on the newish concept that regulation does not only impose costs (which when not justified are called burdens): "some regulations, including those governing financial disclosures, "are more like public investment in that they build capital – trust, standards and confidence – which private firms can then leverage to create value." Exemptions from these specific rules would not be economically stimulating. For discussion.

EC upgrades Think Small First principle

Last week the European Commission presented a number of initiatives to boost the contribution of Small and Medium Enterprises (SMEs) to the creation of growth and jobs, relying principally on exempting the smaller companies (micro-enterprises) from some EU laws. A press release summarizes the news, but it is worth reading through the Report to Council and Parliament on "minimizing regulatory burden for SMEs." The new steps are taken within the Europe 2020 strategy with smart regulation playing a rôle in making European business more competitive by providing a lighter regulatory environment. They build on the Small Business Act (2008) which has eased access to finance. The report states that administrative burdens have already been reduced by 22%, with more proposals from the Commission (totalling 33% reduction) still in the legislative pipeline and lists existing full or partial exemptions granted to micro-enterprises. The package also contains an action plan to involve SMEs better in law-making. A landmark document which will contribute to the reflection on what will come after the end of the current Action Programme for reducing administrative burdens, which closes next year.

01 December 2011

Smart Regulation slated to promote sustainable growth

Yesterday, your blogger attended the conference in Paris on "Smart Regulation and Sustainable Growth" organised by the Korean Legislative Research Institute and the University of Aix-Marseille (FR). The two communities of experts were represented and explored how they could better work together for more effective policy outcomes. This would include tapping the potential of the principles of Better/Smart Regulation to improve the long-term perspective in making and enforcing regulation, to enhance results in the areas of green growth, climate change and biodiversity. Contributions also addressed the effectiveness of regulations compared to other interventions, and means to enlist citizens in securing enforcement, including through easier and less costly access to litigation. Korea put forward the point that incentives could be a major factor for obtaining the right change of behaviors. Participants were referred, for further study, to the OECD publication "Towards Green Growth" (April 2011) which includes sections on how well conceived regulation can contribute to the policy (see pp 45 sq). This blog will report as proceeds are published online.

European regions ponder smart regulation

With all eyes on the new Belgian government constituted after a record inter-regnum, how could we not signal that Flanders has just uploaded proceeds of the conference announced on this blog, which invited officials from regions of European countries to reflect on "How do Flanders and the other European regions cope with the competency for smart regulation in a multilevel environment?" Representatives from Wales, Lombardy, Scotland and Flanders presented their regional policy of smart regulation and discussed with OECD, EC and the Committee of Regions how they could interact with the smart regulation central strategy. The other Belgian region (Walonia) seems not to have been present. A pity neither German lander, nor Spanish communities (for a study of their regulatory work see a previous post), attended. (For more information see also post on Commitee of Regions multi-level governance and better regulation.)

Visas hinder ease of doing business

Making it easier to enter the country for people bringing investment seems a pretty obvious way for a naitonal administration to increase business opportunities and returns by fostering FDI. But many countries have not yet been able to curb their bureaucratic tendencies and cease penalising themselves. This has recently been highlighted at the 5th Arabian Business Forum in Dubai. A quick look around the world shows that Singapore, top performer in business and competitiveness indexes, offers a variety of visas for potential workers and investors. The city-state has a specific Entrepreneur Pass for those intending to set up businesses, and a Multiple Journey Visa can be issued for up to five years.

25 November 2011

Mexico links competitiveness to regulatory reform

Last week, Regulatory Reform was in the news in Mexico, where a very active agency (COFEMER) has been conducting work for a number of years. The third annual meeting of the national commission for regulatory reform held on 19 November was the opportunity to take stock of progress made, especially in e-gov procedures for citizens and business, and promote good regulatory practice. A federal level online one-stop-shop (ww.tuempresa.gov.mx) was recently upgraded for the registration of new companies.
Two traits characterize the Mexican approach to regulatory reform:
- Regulatory reform is considered a major contribution to national competitiveness, the point was again made by the ministerin charge, J. A.Torre at the event, as he highlighted the results of the implementation of the OECD guide on regulatory quality and competitiveness. Mexico is the only country to have organised an international conference linking the two themes (see OECD report);
- better regulation principles are applied not only a the federal, but also at the sub-national level (see OECD 2010 report). Compilation and promotion of good regulatory practices is key to the overall improvements. As part of the last week's conference proceedings, OECD published a report (in Spanish) on the 19 successful practices presented by A. Carballo, DG of COFEMER and compiled with OECD support (J. Pastor Garcia Villareal, from the regulatory policy division, who attended the conference)

UK peer criticises deregulation

A balanced view about the costs and benefits of regulation, and a comparison with Germany, was given by Lord Heseltine, a heavyweight Conservative politican, last night in a speech at the Whitehall and Industry group, according to a post today on a FT blog under the title "Lord Heseltine challenges Tory orthodoxy on red tape." "Regulations provide benefits and opportunities for business as well as adding to costs and workload," he said citing the example of crash helmets. What was needed was to concentrate on the red tape, not wholesale deregulation.

23 November 2011

Announcement: conference on Smart Regulation and Sustainable Growth

The Korea Legislation Research Institute and the Administrative Research Centre at Paul Cézanne Aix-Marseille III University invite all smart regulation experts to a conference on "Challenges and Opportunities for the Future: European and Korean Perspectives on Sustainable Growth and Smart Regulation."
Date: November 30th (Wed), 2011 Venue: Hotel Marriott Rive Gauche Paris.
The invitation is online, as well as the conference book.
RSVP by e-mail to klri @ koconex. com

22 November 2011

EU 2020 banks on social business

On 18 November, addressing a conference on social entrepreneurship, Internal Market Commissioner Michel Barnier developped regulatory aspects of his Social Business Initiative which proposes to promote a highly competitive social market economy, within the 'Europe 2020' strategy.
The social economy — cooperatives, foundations, associations or mutual societies — employs more than 11 million people in the EU, accounting for 6% of total employment. Social enterprises have been identified as a priority for funding under the EU's regional policy. About €90 million has been earmarked for a new social investment instrument to support debt and equity investments in 2014-2020. The Commission is set to propose a European regulatory framework for social investment funds before the end of 2011 to facilitate access to financial markets for social enterprises, seen as one of the major obstacles to boost the sector. Cutting red tape, especially on public procurement, will be an essential component of the plan. Very good article on Euractiv.
The simplification drive seems ever more necessary: the Commission Work Programme for 2012, presented last week, lists 129 EU laws and assorted non-binding strategy papers and recommendations to be developped in that year, including an Annual Growth Strategy, measures to put an end to tax havens and a "quick reaction mechanism" against VAT fraud, as well as laws to end fiddles in the disbursement of EU funds.

India: senior businessman calls for regulatory oversight body

Another well documented article dated 13 November completes the picture presented by a recent post. By the same author (a former chairman of the Telecoms authority) it calls for the establishment of an independent oversight body such as exists in the UK an other countries. This article summarizes the Indian RR approach and argues that the stock-taking of existing acts, which has been conducted in India in the past, should be viewed as only the first step of regulatory reforms. Now "it was expected that an institutional mechanism would be put in place towards producing high-quality regulations based on the touch-stone principles of legitimacy, efficacy, transparency and accountability. To accomplish this enormous task, an oversight body to provide structured directions to the regulatory regime of the country is needed. Such a body already exists in many developed countries.
In order for it to be effective, it should be located in the prime minister's office, vested with powers to independently coordinate, review and approve all regulatory policies and thus function as a focal point for quality regulation and good regulatory governance in the country. Such an oversight institution would provide a comprehensive regulatory management system through which regulations are developed, enforced and adjudicated, thus supporting the broader objectives of efficiency, transparency and accountability in governance.
Accountability of regulators cannot be addressed by a single piece of legislation. In the United Kingdom, there is a Committee of Parliamentarians which monitors the functioning of various regulators. Perhaps this can be experimented with in our country as the first immediate step for regulatory oversight."

18 November 2011

ASEAN pursues regional regulatory dialogue

As reported in the international press (example Thailand), on 17 November 2011, ASEAN held its 19th ASEAN Summit in Bali, Indonesia, followed by a meeting with the ASEAN Business Advisory Council (ABAC). Key issues discussed at the Summit were ASEAN Community building by 2015 (see the Blueprint), the role of ASEAN in the global community and other regional and international issues of mutual interest.
At the end of the Summit, ASEAN Leaders signed a Bali Declaration on the ASEAN Community in the global community of nations and witnessed diverse technical agreements.
Regulatory reform remains high on the agenda to achieve regional integration, and is most visible in the third pillar, which calls for streamlining standards and technical barriers to trade including systems of standards, quality assurance, accreditation and measurement. Leaders called for the institutionalisation of the High-level Task Force on Regulatory Reform, whose first meeting was held in Jakarta on Aug. 3, 2011 (as reported on this blog.) For more on this event, see an article in Jakarta Post.

US Senate consider British RR experience

The British government’s experience with Better Regulation tools was presented this week to the Senate Budget Committee’s special task force on government performance, in support of a bipartisan initiative for regulatory reform. Differences in political cultures could limit the extent to which the UK approach could bridge the American ideological divide over the value of regulations. Jitinder Kohli, formerly in charge of the UK regulatory reform initiative, now a member of an American think tank, was gave a brief description of the origin and spirit of British regulatory reform policies, pointing out the difference between the European and American contexts:
"The context in the United Kingdom was similar to that in many European nations and did not suffer from the polarization around the issue of regulation that you appear to have in this country. There was broad consensus that regulation played an essential role in providing protections for our citizens and quality of life. No one argued that we did not need regulations to protect workers, or consumers, or provide clean air and water, and there was even agreement that regulation was needed to tackle emerging challenges such as climate change. And yet British business often claimed that there was too much regulation, and in many cases regulatory oversight felt like mere bureaucracy. As a result, they called on government to reduce the burden" said M. Kohli.

Serbia announces new regulatory reform strategy

The Serbian government announced yesterday that the new strategy of regulatory reform is in preparation, which will simplify administrative procedures and improve the competitiveness of enterprises in Serbia. Supported by the US Agency for International Development (USAID), the project aims to improve significantly the Doing Business ranking (currently 92nd, down 4 places since last year) A recent survey showed that the reform is urgent. In spite of the application of the regulatory guillotine, 83 percent of the respondent companies said the bureaucratic burden has not diminished in the last year.

15 November 2011

How does smart regulation support competitiveness?

While we all agree that regulatory reform directly contributes to a better regulatory environment for business, we rarely stop to examine how effective this contribution can be, and how it combines with other policies to improve a country's economic performance relative to its competitors. Your blogger was invited by the Chinese Taipei ministry of finance to investigate this topic for a roundtable with the vice-minister and senior staff of the ministry last month. The resulting presentation published online examines various academic contributions and national approaches to competitiveness, to ascertain the place of regulatory reform: in short regulatory competitiveness is one one of the three pillars of economic competitiveness with competition policy and the infrastructure policy. The detailed Powerpoint takes stock of the various stages of regulatory reform from deregulation to smart regulation and examines current varieties practiced by countries and international groups.
A worldwide tour of economic performance in national and intergovernemental policies shows inter alia that approaches come under different banners corresponding to governement priorities. Supported by the economic research of the Global Competitiveness Forum, several countries have set up competitiveness bodies (the European Commission, Sweden, Ireland and many others), while others prefer the more economically mainstream concept of productivity (following in the Australian model, Hong Kong, Malaysia, Philippines and others). The US and India apply both concepts while Mauritius entrusts the two objectives to the same organisation. Other countries seem to believe that public policy should not interfere with the use of factors of production and prefer to seek growth and jobs primarily via other interventions: France and Germany favour making the administration more efficient, the UK emphasizes efficient markets with its Competition Commission. Most of the others closely watch the Doing Business index and make raising their ranking a national priority.

APEC promotes good regulatory practices

In complement to yesterday's post about the APEC ministerial, our network correspondent in Chinese Taipei, who was at the conference, draws our attention to the APEC Leaders' Honolulu Declaration ("Towards a seamless regional economy) published yesterday. Go to Annex D "Strengthening Implementation of Good Regulatory Practices" to see how member countries will try "to embed the concepts of non-discrimination, transparency, and accountability into the regulatory cultures of APEC economies", to help create jobs and promote economic growth. Experts will want to check the new formulation of principles of high-quality regulation contained in that document. Compared to the new OECD principles, which are now close to finalisation and publication, the APEC text provides a shorter and more general list of actions to be implemented by November 2013. On substance, there is little new in this document (except perhaps the notion of "incentives to review regulation") but we can hope that it will create some momentum for domestic reform in member countries.

14 November 2011

Greek bailout package includes RR measures

Implementation of the Oct. 27 bailout package brokered between former Prime Minister George Papandreou and other European leaders is key to the new government's access to international assistance. Among the austerity measures, experts will have noticed the mention of steps to raise Greek external competitiveness, relying mainly on reducing administative burdens. An investment expert, speaking in Beijing on 10 November, said the Athens has introduced a new investment law to create a business-friendly environment, including providing tax incentives and subsidies in such areas as renewable energy, logistics, tourism, food and beverages. A fast-track law has also been put in place to help cut red tape, fight bureaucracy and facilitate investment. Not much detail for the moment on public sources.

Ukraine needs to reform inspections (IFC)

A study by IFC published last week found that the system of permits, inspections, and technical regulations in Ukraine remains a burden for businesses, costing them nearly $900 million last year and hampering their efforts to grow and create jobs.
The IFC study, “Investment Climate in Ukraine as Seen by Private Businesses 2011,” surveyed approximately 2,000 businesses and found that 46 percent of them resorted to unofficial means to resolve issues with state officials. Ukrainian companies surveyed spent an average of 10 percent of company revenue in 2010 to comply with official regulations.
“Less regulation and a transparent economic environment will help promote growth and enable Ukrainian businesses to attract more investments,” said Elena Voloshina, IFC Head of Operations for Ukraine. “Ukraine has made some positive steps forward to ease the regulatory burden for private businesses over the past year. However, poor implementation and the slow pace of reforms remain among the key barriers to private sector growth.”
Since 2009, Ukraine has made some progress, particularly in the reform of technical regulations. However, the IFC study found that local entrepreneurs have not fully benefitted from the regulatory changes due to the low level of implementation, which significantly undermines the reform process.
The study also recommended steps to improve the investment climate. These steps include decreasing the number of permits and the number of businesses subject to licensing; extending the scope for self-certification; enforcing the use of inspections checklists; and streamlining norms and requirements.
IFC’s Ukraine Investment Climate Advisory Services Project is supported by the Canadian International Development Agency; the Dutch Agency for International Business and Cooperation; the Swedish International Development Cooperation Agency; and Switzerland’s State Secretariat for Economic Affairs, SECO.

APEC links RR with trade and green growth

There is a lot of conceptual material to be found in the proceedings of the 2011 APEC ministerial meeting held in Honolulu, Hawai, on 11 November and chaired by Ms Clinton. In a “Declaration of Honolulu – towards closer regional economic ties,” APEC Ministers committed to take action to strengthen economic integration and expand trade, promote green growth and advance regulatory convergence and cooperation, to achieve economic growth in the region. The statement published on the APEC site and the annex F on regulatory issues provide rich reading. Here are the main chapters (our unofficial summary):
  • "Regulatory Cooperation on Emerging Standards and Regulatory Issues for green growth": the objective is to prevent unnecessary technical barriers to trade, support interoperable emerging standards for smart grids, green buildings, and solar technologies.
  • Approval of a "Regulatory Cooperation Action Plan" to inter alia improve the efficiency and effectiveness of regulations, build public trust in regulations, improve consumer confidence in globally traded products and encourage implementation of the APEC-OECD Integrated Checklist on Regulatory Reform;
  • Regulatory Convergence: streamlining approval procedures for Medical Products , harmonised classification of Chemicals, cataloguing regulations on Services, reducing unnecessary testing and streamlining paperwork on Wine certification and trade procedures, raising common Food Safety rules, including closer alignment on international standards (with APEC-World Bank collaboration).
In summary, a fine example of effective regional regulatory cooperation.

08 November 2011

IMF boss renews call for RR

Regular readers of this blog must have noticed that we have up to now desisted from commenting on one of the major industries constantly under scrutiny and proposed for regulatory reform: the financial sector. This is a deliberate omission. Regulatory Reform as tackled in this blog is a horizontal set of institutions, policies and tools that can be applied in most sectors of the economy. It is up to regulators in each sector to make the best use of the principles. But to avoid leaving such a major gap in our coverage, we will henceforth report the most stimulating news in regulatory reform of the financial markets, starting with Monday's declarations by Christine Lagarde, the managing director of the IMF. "Better regulation of the financial sector remains critically important in the years ahead to make the financial sector safer and more stable, and to put the industry back in the service of the real economy," she said . Ms Lagarde cautioned against the inconsistency of implementation.

Indian RR: poor results

Though an impressively dynamic economy, India still does not offer a competitive business environment. According to the 2012 Doing Business ranking, though present in the 30 economies that improved the most over time, India still ranks low overall , with its rank improving marginally from 139 to 132 between the 2011 and 2012 reports. On the reform undertaken in India, the 2012 report said, “When India dismantled a strict licensing regime controlling business entry and production the benefits were greater in states that had more flexible labour regulations”.
These results point at insufficient results fromRegulatory Reform which, though on the books since the late 1990's seems to be slow in delivering, as reported on this blog.
Today, in awell documented article is published on India Express, a former chairman of Public Interest Foundation, gives figures about how the Indian legal corpus has been streamlined, but not sufficiently. Texts remain from the colonial days. He also calls for a framework to channel regulatory activities ("regulate the regulators.")

OSCE-supported 'regulatory guillotine' (Armenia)

An Armenian radio bulletin announces the launch of a legal simplification programme to be conducted over the next 2 years, using the "regulatory guillotine" approach. The project will involve reviewing and streamlining the national regulatory frameworks affecting business activity and the daily lives of citizens. Throughout the duration of the project, a Joint Dialogue Forum will be facilitate the exchange of information and further discussions between stakeholders. Other donors are contributing: the Austrian Development Agency , USAID, the World Bank and UNDP. For more, see previous posts about Armenia.

07 November 2011

A circular to boost "the quality of the law" (France)

The French Prime Minister issued in July a new circular (non legally binding instruction to ministers) upgrading procedures for better "legal security and predictability, and simplification of ill-adapted or obsolete rules" and also to improve the attractiveness of the French legal model. The text primarily deals with organisational issues: annex I offers ways to enhance the regulatory management process (with better planning and monitoring of the legal production); annex II suggests improved documentation of new regulations, including early planning of subordinate legislation and RIAs and the drafting of short presentation note stating the public(s) concerned and new legal content (akin to the EU "citizen's summary"). In spite of the mention of "attractiveness" in the first paragraph, the circular consolidates the traditional legal approach to law drafting.

02 November 2011

New definition of smart regulation (US FDA)

Under the title " FDA official urges smart regulation" a short article in the Philadelphia Inquirer online edition uses smart regulation to sum up a necessary new paradigm for Health law. "Caught between wary patients who want safe artificial hips and demanding medical-device manufacturers who want their potentially lucrative gizmos approved yesterday, the top device official at the U.S. Food and Drug Administration told skeptical industry executives gathered Monday at the Convention Center that he was trying to institute a paradigm shift to help all parties.
'It's not safety or innovation, Dr. Jeffrey Shuren said. It's safety and innovation.
'We needed to move away from this construct that safety and effectiveness and facilitating innovation are incompatible," Shuren, director of the FDA's Center for Devices and Radiological Health, said at the Biotech 2011 conference, "They are both sides of our mission."

Extra red tape on rule making? The new RAA (US)

An interesting discussion in the US, on the same theme as the previous post (accountability of regulators) is provided by a recent post on "the Hill" (US Congress Blog) under the polemic title: "Regulatory reform good for multinationals, yet bad for you."
The Regulatory Accountability Act of 2011 (RAA), a bipartisan bill introduced in the House and Senate, updates rules on how Federal agencies analyze costs and benefits, with detailed procedures for agencies promulgating regulations that are projected to have a minimum effect of at least $100 million on the United States economy.
The vice-chair of the American Sustainable Business Council questions the proposed legislation. It "will likely dramatically drive up the cost of almost every rule-making process and budget of a federal agency. Second, federally elected officials will be stripped of their ability to responsibly lead our country. And third, the RAA is a highway to never-ending lawsuits by special interests against the federal government.
The RAA is designed to micromanage every federal agency in its efforts to create rules necessary to carry out legislation passed by Congress.
By doing so, it turns over 60 years of effective regulation promulgation under the Administration Procedures Act into a protracted process that will stretch the time needed for rule-making into decades. Federal agency budgets will need to be expanded by hundreds of billions of dollars to comply with the RAA and perform their usual functions of protecting the public and small businesses from unsafe products and practices."
A similarly critical view is taken by OMB Watch, a nonprofit research and advocacy organization.
For a more balanced view, see RegBlog post reporting the most recent hearing in the House (Judiciary Committee).

BR by better regulators (UK)

Regulating the regulators to enhance the quality of regulation. OECD papers regularly call for greater accountability by regulators toward government for delivering on stated policies, with results to be obtained by a change of culture including greater evidence base for regulation, and effective consultation, with appropriate oversight arrangements (see for example new Recommendation on Regulatory Policy and Governance section 7).
Yesterday the UK fleshed out these principles in a new formulation for the British context. The Business and Enterprise Minister made a number of proposals for improving the regulatory landscape, based on "a more mature relationship between business and regulators" (see BIS press release) including :
  • More use of co-regulation, where business shares a degree of regulatory responsibility, for example through industry bodies setting professional and working standards
  • Greater 'earned recognition' – where regulators recognise business activities that support compliance and reduce intervention, creating a stronger incentive for private sector led compliance
  • A role for Local Enterprise Partnerships (LEPs) to improve the transparency and accountability of local regulation – bringing business and regulators together to look for ways to reduce unnecessary burdens
  • Clearer, more straightforward guidance – so that businesses, particularly SMEs, have greater access to clear guidance on what they need to do to comply.

31 October 2011

Pakistan reviews cotton legislation

Regulatory reform principles are most effective when designed and applied across the full regulatory spectrum. But specific sectoral examples can also be useful, to feed into research of international best practice and flesh out how principles are supposed to be applied. A news article from Pakistan "Business Recorder" published yesterday explores, on the basis of a USAID-sponsored study, how regulation should be adjusted to foster efficiency and growth in an important economic sector in Pakistan: cotton production. The study recommends the abolition of Pakistan Cotton Board and Provincial Cotton Control Board and the reform of the regulatory framework in the cotton ginning sector. Here is my summary of some point suseful for RR experts:

- Cotton legislation is too complex (too many texts) and has not been able to facilitate production and processing of high value cotton. Some texts are outdated and do not incorporate improvements in cotton grading/standardisation and marketing.
- "regulation is intrusive and attempts to control factors which are related to operation of markets;... enforcement is weak because of lack of resources, inappropriate focus, multiplicity and overlaps."
Suggestions include shifting the focus of regulation from maintaining varietal purity to adequate 'labelling' and disclosure, and strengthening enforcement of labelling provisions by establishing incentives and penalties.

20 October 2011

Doing Business 2012 studies 245 business regulatory reforms

Released today, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year's report data cover regulations measured from June 2010 through May 2011. The report rankings on ease of doing business have expanded to include indicators on getting electricity. The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong SAR, China; and Singapore.
The global report shows that governments in 125 economies out of 183 measured implemented a total of 245 business regulatory reforms—13 percent more reforms than in the previous year. In Sub-Saharan Africa, a record 36 out of 46 economies improved business regulations this year. Over the past six years, 163 economies have made their regulatory environment more business-friendly. China, India, and the Russian Federation are among the 30 economies that improved the most over time.

This year, Singapore led on the overall ease of doing business, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. The Republic of Korea was a new entrant to the top 10.  The 12 economies that have improved the ease of doing business the most across several areas of regulation as measured by the report are Morocco, Moldova, the former Yugoslav Republic of Macedonia, São Tomé and Príncipe, Latvia, Cape Verde, Sierra Leone, Burundi, the Solomon Islands, the Republic of Korea, Armenia, and Colombia. Two-thirds are low- or lower-middle-income economies (from the press release.)

19 October 2011

New simplification omnibus in French Parliament

Yesterday, the National Assembly adopted in first reading a new bill (tabled from the floor) for the "simplification of the law." This is the fourth text since the beginning of the mandate of this parliament. The text is geared to improve the legal environment for business, especially SMEs. The Opposition calls the omnibus a heterogeneous compound that far from improving the situation, will further cloud the issue. Specially interesting items (listed at the top of the online dossier) are company law simplifications and a streamlined payslip. The bill still  needs to get Senate approval (tip from M. Hainque). For background, see joint previous post, and joint article by M. Hainque and C.H. Montin.

Food for thought: benefits of regulation

After the deregulation fever and the anti-regulation campaigns across the world, is a more reasonable approach under way? From "Politico" (US) "Challenging a flood of firsthand business testimonials about the burden of federal red tape, new research by environmental and consumer groups suggests some regulations might even lay the groundwork for a lasting economic recovery."
A 2008 "occasional paper" by BERR (UK) on "the impact of regulation on productivity" develops the same idea: "On the other hand, some regulation can have a positive indirect impact on productivity. Broad regulatory frameworks can drive productivity growth by promoting competition and facilitating an improved investment and innovation climate, despite the fact that the individual regulations that comprise them will impose some direct compliance costs on to firms. The existence of an appropriate corporate governance framework, for example, is a pre-condition for enterprise and investment, and a key determinant of company performance."

A 2008 "occasional paper" by BERR (UK) on "the impact of regulation on productivity" develops the same idea: "On the other hand, some regulation can have a positive indirect impact on productivity. Broad regulatory frameworks can drive productivity growth by promoting competition and facilitating an improved investment and innovation climate, despite the fact that the individual regulations that comprise them will impose some direct compliance costs on to firms. The existence of an appropriate corporate governance framework, for example, is a pre-condition for enterprise and investment, and a key determinant of company performance."

Better Regulation in Greece: will the crisis promote or undermine reform?

Maria Mousmouti gives us an update on BR in Greece. "Going through the worst crisis in its recent history, Greece hits daily the headlines due to its delay to successfully push through painful reforms. This turmoil often leaves unnoticed several important initiatives taking place at the same time. A recent one is a draft law on the improvement of regulatory governance, which was presented for consultation in August 201 by the Ministry of Administrative Reform. The draft law attempts for the first time to legislate the principles and means of better regulation and to consolidate better regulation processes that will improve the labyrinthal legal and regulatory environment. So far, regulatory issues are dealt with by a PM circular from 2006. The bill introduces the obligation for annual programming and prioritization of legislative initiatives per Ministry (article 3) and consolidates impact assessments (article 6), consultation (article 8), codification (article 10), simplification of legislation (article 9) and the obligation to evaluate the results of legislation (article 7) as the main means for achieving legislation of improved quality. It further establishes better regulation structures (articles 12-17) and promotes, for the first time, a consistent and ‘whole of government’ approach to legislative quality. The draft was positively received by all actors that participated in the consultation and is still to be presented to Parliament. Let us only hope that the crisis will leave way and not undermine such initiatives." Maria Mousmouti is the Executive Director of the Centre for European Constitutional Law in Greece.

16 October 2011

Viet Nam engages regulatory reform

According to a report from Viet Nam news, experts at a conference organised in Ha Noi last week by USAID and the Central Insitute for Economic Management agreed that Regulatory Reform was needed to encourage growth and competitiveness in a riskier global environment.
Officials in Viet Nam are concerned about the growth of the legal stock. Statistics from the National Assembly Office have shown that the number of regulations issued by central authorities increased from 1,043 in the year 2000 to 5,810 in 2010.
"The rapid increase in the number of new regulations makes it quite difficult for citizens and businesses to understand them all," Cuong said. The nation also lacked a focal-point agency to control the quality and consistency of regulations, leading to the issuance of unclear regulations that require additional documents to clarify them, he added.
Policy instability and bureaucratic inefficiency are concerns hightlighted by the Global Competitiveness Index, where VN lost 6 places in 2010-11.
Phan Ngo Hai, general director of the Administrative Procedures Control Agency, which has been overseeing the Prime Minister's master plan to reform administrative procedures, also known as Project 30, said the quality of regulations remained poor, though the project had delivered results impressive numerically.

Hungarian red tape package to save € 1.7 bn

This blog reported in July on the Hungarian governments anti-red tape plans. In August, details were published concerning measures under consideration, numbering 232 items concerning various areas such as family and child services, naturalization, property administration as well as employment and agriculture.Last week, the savings for companies, to be derived from the package were estimated to reach HUF 500 billion (1.7 billion euros), with 150,000 jobs created (see a critical article from the Budapest Business Journal, which includes details about the intended measures.)

How to boost European competitiveness

Three interesting and informative updates from the European Commission were published on 14 October: the Communication on "Industrial policy: Reinforcing competitiveness,"the yearly report on "Member States competitiveness performance and policies 2011" and the "European Competitiveness Report 2011." The joint message, as summarised in the press release, is that the European economy needs coherent and coordinated industrial policies from the Member States if it is to get back to a growth path. Whilst financial and fiscal stability are necessary preconditions for sustainable growth, they need to be complemented by the implementation of structural reforms and microeconomic policies enhancing the competitiveness of the EU economy and its long term growth potential. Drawing on the Communication and the two reports, a press Memo presents an abridged look at industrial competitiveness in EU Member States in the fields: innovative industry, sustainable industry, business environment and SME policy. It contains a brief update on the situation of each of the 27 member states. Among key areas of action, the importance of improving the regulatory environment of business (including efforts to reduce administrative burdens) and the need to further improve the Internal Market, are reaffirmed.

09 October 2011

New assault on red tape in Ireland

Though engaged in reducing administrative burdens since 2008, along with the other EU members, the Irish government has just launched a new cross-government initiative, targeted specially at small firms, with the objective of saving the Irish economy €500m.
At a meeting last week, a newly created high-level group comprising representatives of Government, business and trade unions was informed that burdens had already been reduced by 22%. A further phase was underway to save the economy an additional 25% by the end of 2012.

08 October 2011

Rich discussion of new principles of Regulatory Governance (OECD)

The OECD has posted some of the responses to their call for feedback on the Draft Recommendation on Regulatory Policy and Governance.  The comments  whose authors authorised publication are posted at authorised publication are now online. The OECD Regulatory Policy Committee is expected to consider the revised version of the Draft Recommendation at its meeting on 3-4 November 2011. [Lorenzo Allio]

27 September 2011

Australia scrutinises evaluation of reform

An  Australian active member of our network draws our attention to an interesting technical document issued by the Productivity Commission on 23 September. It is a "discussion draft." to support on-going work on Identifying and Evaluating Regulatory Reforms, currently one of the most relevant issues in RR (see OECD conference in Madrid on a very close topic).  It contains a considerable amount of in-depth analysis of methods for identifying and evaluating regulatory reforms, in both the main report and the very rich appendices.
Australia is part of a small group of countries that has chosen the "productivity" approach rather than focus on "competitiveness" (as Ireland, among others, does). In the opinion of this blogger, productivity makes more sense economically, is better rooted in theory, when dealing with the dynamics of  factors of production.
The site of the Australian ministry of finance contains some interesting insights into the history and relevannce of productivity in the national context.

Taiwan's performance in competitiveness

The rapid rise of Chinese Taipei in the Doing Business ranking is a first-rate success story for regulatory reform experts. Still ranked 61st in the world in 2008, the position climbed to 46th in 2009 and 33rd in 2010. This excellent rating is confirmed by the Global Competitiveness report 2012, which preserves the Island's excellent position (13th) reached in the previous report.
The best source of official information on how the Government achieved such a result is to be found on the site of the Centre for Economic Planning and Development, especially its yearly activity report. This year's issue, published earlier this month, includes the reform principles and measures undertaken by the different ministries and commissions. Concrete measures include the institution of online application procedures for company establishment, the provision of single-window services for construction permit applications, the use of personal property as collateral, and the legislation of laws and regulations for the protection of investors. Business friendly reform rest on a closely orchestrated interdepartmental collaboration. Efforts completed in 2010 and 2011 include such tax-facilitation measures as reduction of the business income tax to 17% and simplification of tax-filing procedures for profit-seeking enterprises. An excellent background note is published online by Professor Eric Yi-hung Chiou.

15 September 2011

European Parliament endorses smart regulation

An event for us smart regulators : a report on better legislation, subsidiarity and proportionality, and smart regulation was adopted by the European Parliament. Subject to reading the full 22 page report, filed by Conservative MEP Sajjad Karim, the content seems close to that if the  joint report by the UK, DK and NL (March 2010) already reported on this blog.
The report is important and useful in that it sums up the current potential of smart regulation in the evolution of the institutional balance in the European Union, in the context of the Lisbon treaty and EU2020. More forceful burden cutting was necessary to restore European competitiveness, threatened by countries such as India and China says Sajjad. The report and motion were adopted by the EP.
Some of the ideas are excerpted in a declaration on the MEP’s personal site, published yesterday, which makes for easier reading (link pointed out by DT), among which the idea that the EU may still fail to reach its target of reducing administrative burdens by 25% before the end of next year, partly because of national “gold-plating” of EU rules.

A "minister for red tape" (Ontario)

According to a Canadian online article, Conservatives in Ontario want to intensify the fight against red tape. A candidate has promised to cut the size of cabinet by 20 per cent if he wins the Ontario election, but at least one of the ministers left standing will find a new list of duties added to the job description – minister of red tape. The Progressive Conservative platform calls for “red tape” to be reduced by more than 30 per cent.

Spain continues battle against admin burden

Spanish cabinet set the reduction target at 30% in May 2007, the most ambitious figure in the EU, and published a Plan of Action in June 2008. According to various studies mentioned online, the total administrative costs amounted to 4.6% of GDP (some 43 billion euros) 30% of which would correspond to local legislation. The Spanish approach to administrative burdens is managed by the Ministry of Public Administrations but is supervised by a deputy PM.
There may be doubts elsewhere, but work in on-going in Spain, as reported at a conference held in June in the Baleares.
The fourth batch of burden reduction measures, totalling a 2 billion euros savings directed principally at business, was approved by the Government in December 2010.
A fifth package of reduction measures, directed at citizens, was approved by the Cabinet in May 2011, for a total reduction of 500 million euros.
The Confederation of employers has published the results of measurement and reduction work conducted in 2010, along with 2011 perspectives. The CEOE is under contract with the Government to conduct the SCM operations.
Following the national target decision, the government signed an agreement with the federation of local authorities to enlist their cooperation in achieving the 30% reduction, which applies also to local burdens.
The federation has published a simplified methodology for administrative burdens created by municipalities and provinces, along with other technical documents (such as RIA). The approach is based on the search for quality and evaluation techniques. The information also mentions 10 pilot projects managed in 10 different local entities.
Several Autonomous Communities (regions) have conducted administrative burden reduction programmes of their own, or in connection with the national initiative, and have published results, including simplification plans (such as Castilla Leon, including its own SCM guide, Cantabria where the plan is directed as casinos, or Andalucia, Asturias and Aragon.)
The city of Gijon reports the existence of a working group comprising representatives of the 10 major Spanish cities.

14 September 2011

Serbia: expert summarizes 10 years of RR

Serbia gives the picture of an economy trying to break away from the heavy heirloom of the Yugoslav system, and partly succeeding. The recently published Global Competitiveness index, which places it in 90th position in 144 economies, shows poor scores for institutions and freedom from administrative interference, but good traits emerging for macroeconomic management and education. Not surprisingly, government bureaucracty and corruption still feature are major obstacles to business. Nikola Jankovic from Jankovic Popovic Mitic Law Firm (JPM) gives, in an interview to Balkans.com, a picture of recent progress and its current limits.
“The first wave of the changes included adoption of a number of the new laws which were supposed to bring Serbia closer to creation of the market economy and integration into the European market. First of all, we would like to point out that the Privatization Act from 2001 announced the change of the concept of privatization in Serbia. The said Act introduced the Privatization Agency the aim of which was to operatively manage the process of privatization. Today, the privatization process is at the final stage. Over the previous years a significant step forward has been made in restructuring of the public enterprises, which has resulted in improvement of their financial performances.
The second wave of the changes was marked by continuation of the activities on adoption of the new acts, such as the Companies Act, which has integrated the EU Directives in its original wording, while the intention of the Act on Litigation Proceedings and the Act on the Executive Procedure has been to expedite and increase the efficiency of the litigation proceedings. Besides the said Act, also the Energy Act has been adopted as well as many other Acts.” (The rest of the interview examines the application for EU membership and modernization of regulation.)

National Competitiveness under the microscope

Interesting yearly must-read for all smart regulators, just published, the World Economic Forum's Global Competitiveness survey. For highlights of the 2011-2012 edition, see press release. Main news:
  • Switzerland, Singapore and Sweden top the ranking
  • The US continues the decline it began three years ago, falling one more place to fifth position
  • Emerging economies continue to close the competitiveness gap with OECD economies
“The results show that while competitiveness in advanced economies has stagnated over the past seven years, in many emerging markets it has improved, placing their growth on a more stable footing and mirroring the shift in economic activity from advanced to emerging economies.
The People’s Republic of China (26th) continues to lead the way among large developing economies, improving by one more place and solidifying its position among the top 30. Among the four other BRICS economies, South Africa (50th) and Brazil (53rd) move upwards while India (56th) and Russia (66th) experience small declines. Several Asian economies perform strongly, with Japan (9th) and Hong Kong SAR (11th) also in the top 20.”
The ranking provides a global view centered on outcomes which complements the Doing Business index, which is more focused on regulatory procedures and pays great attention to reforms. Each year, the GCR explores one of the conceptual issues underpinning the study of competitiveness: debt (2012), fiscal policy (2011), etc and gives detailed methodological clarifications.
2- page country reports place each national economy on the development ladder which comprises 3 stages (factor based, efficiency-driven, innovative), list the relative importance of “problematic factors for doing business” and present the scores in each of the 12 “pillars” of competitiveness in a easy to read diamond.

11 September 2011

ASEAN starts regulatory reform dialogue

Among many reasons for engaging in international regulatory cooperation, regional economic integration is certainly one of the most promising in terms of competitiveness and growth potential. After devoting a decade (2000-2010) to applying Better Regulation principles to its legal production, the European Union has refined its tools under the name of smart regulation. Other regions are following, as already reported on this blog, including South East Asia and East Africa.
In South East Asia, regional integration took another step forward, as delegates met for the First ASEAN Regulatory Reform Dialogue (ARRD) in Jakarta on July 27. Here are excerpts from the official report online:
“The Dialogue - chaired by Dato Lim Jock Hoi, Permanent Secretary, Ministry of Foreign Affairs and Trade of Brunei Darussalam -is an important avenue to exchange views and information on regulatory reform efforts and policy measures, and to discuss measures and activities to take forward ASEAN initiatives on regulatory reform related issues.
This effort is a positive and pro-active step towards looking into ways to deal with impediments to trade, and investment facilitation, as ASEAN advances its economic integration.
Specialists in structural and regulatory reforms from the World Bank, and the Asia-Pacific Economic Cooperation (APEC)Secretariat, also shared their knowledge, tools, approaches and experiences at the Dialogue.
In today's complex and interconnected world, regulations assume a greater role than ever before as a fundamental tool of government, and an integral part of a well-functioning economy. Regulatory reform is a multi-faceted task that involves various stakeholders, and it requires co-operation between all levels and all stakeholder groups in ASEAN, namely government administration, business, and peoples.
Dato Lim said that "ASEAN is diverse and there is no 'one size fits all' formulation to addressing regulatory reform . but there is scope for a degree of regulatory coherence in many areas, especially in areas committed under the ASEAN Economic Community (AEC) Blueprint". He further elaborated that "undertaking regulatory reform will never be an easy task and it is essential to start the process of socialising the issue of regulatory reform within ASEAN today".
The Deputy Secretary-General of ASEAN for ASEAN Economic Community, S. Pushpanathan, who participated in the Dialogue, articulated that "behind the border regulatory reform could assist ASEAN countries in realising the full potentials and benefits of trade, investment liberalization, and facilitation at the border." He further added that, "for a successful regulatory reform to take place, it is important that we bring in the private sector and other stakeholders to participate in the regulatory reform and policy-making process".
During the Dialogue, each ASEAN country presented the progress, challenges and issues related to regulatory and structural reform that has and is being undertaken in the areas of trade in services, investment facilitation and transport. The Members then exchanged views on their respective reform efforts and discussed on the possibility of cooperation in these three areas at the regional level.”

Canadian red tape commission finds 2300 'irritants'

The final report of the Canadian government's Red Tape Reduction Commission won't be ready until later this fall, but an interim report offers the government plenty of suggestions for cutting government bureaucracy. The minister in charge, who chairs the Commisison, told the press  that a series of consultations and roundtables across Canada identified some 2,300 "irritants" for the business community. Without forfeiting the benefits of sound regulation for the health and safety of citizens, the government should reduce compliance costs, which were often transferred to consumers, employees and investors. For more, see CBC News article.

Philippines: one-stop-shop with ASEAN dimension

An article published today by a Philippines Online Journal draws attention to a seemingly advanced system to simplify business red tape. The National Single Window (NSW) was set up by a Presidential Executive Order and allows a single submission and accelerated processing of applications for licenses, permits and other authorizations required prior to undertaking a trade transaction. It already serves as a link between 40 Agencies and their public. See their very informative site.
But what is really special about this single window is its international dimension: it stems from the agreement to establish an ASEAN Economic Community (AEC) by 2015 whose mission is to develop a single market and production base that is stable, prosperous and highly competitive and economically integrated with effective facilitation for trade and investment, thereby forming the ASEAN Single Window (ASW). The ASEAN Single Window is the environment where NSWs of member countries operate and integrate. Activities include exchange of information of ASEAN Customs Declaration Document and Certificate of Origin under the Common Effective Preferential Treatment (CEPT) scheme of ASEAN Free Trade Area (AFTA). The impetus for these reforms is supported by regular meetings of the ASEAN Regulatory Reform Dialogue (see last meeting on 27 July 2011).
A 2009 short report, published by APEC, presumably as a spin-off of the OECD-APEC Cooperative Initiative on Regulatory Reform, draws a comprehensive picture of achievements and shortcomings of Regulatory Reform in the Philippines.

10 September 2011

News from Switzerland on cutting red tape and RIA

The Swiss government published its official report on cutting red tape on businesses on 24 August (for the French version); German and Italian versions are also available - click on the language link on the webpage). The report reviews the measures undertaken by the Federal Council since 2007 and sketches initiatives to be launched throughout the next four years. It was supported also by a review of the federal system of so-called “detailed” RIAs and SCM studies, which was carried out in 2010. Administrative simplification and the reduction of regulatory costs have gained on relevance in the Swiss policy and political debate in the past few months – not least as a part of the current campaign for the national political elections of this autumn, with the economic crisis as a background. A national political party has launched an explicit popular initiative against over-bureaucratisation, and the issue is brought forward by a number of stakeholders too. I am available for more information (lallio@alliorodrigo.com).

08 September 2011

NZ moves to "Reducing Regulation"

(From Daniel T.) In a report published today, the New Zealand government reports on its activity since November 2008 to implement its 2009 regulatory policy entitled "Better Regulation, Less Regulation." After a brief presentation of concepts, including a list of seven updated principles, the report lists both changes already implemented as well as those approved by Cabinet and being carried out. It sets out the expected impacts of regulatory changes on businesses and citizens, although the full impacts and costs were not yet fully calculated. "Case studies" in separate boxes help understand the nature of the measures, which are listed under headings that speak volumes: removing requirements, streamlining processes, increasing flexibility, taking a risk-based approach, market expansion, closely supervising compliance costs.Some of the measures are being enacted via an (omnibus) Regulatory Reform Bill, while a "revocations" act repeals a number of obsolete regulations. All in all, efficiency and innovation from the land of the Kiwi (not only good rugby).

05 September 2011

Reducing Regulation (UK)

A reader from the UK reminded us on the associated LinkedIn group forum of a particularly useful document about the new regulatory policy implemented by the Coalition "Reducing Regulation Made Simple: less regulation, better regulation and regulation as a last resort" published in December 2010 by the Department of Business, Innovation and Skills (BIS). Apologies for not mentioning it before. LinkedIn visitors have shown their appreciation, and here are a few words to underline the importance of the document.
The title itself shows the extent of the policy shift towards deregulation, without officiallly adopting that concept that is freely used in comments.
Such new content is served by an attractive presentation, aiming at informing the general public about the fundamentals of the new governement policy: the "strategic context" (how reducing regulation helps growth), ways and means of "reducing regulation", including norms sent down from Brussels, clear role definitions for regulators to ensure harder scrutiny of draft legislation, working methods within policy making departments.
This is clearly the most innovative document in the last12 months, that merits attentive reading. The extent of its compatibility with "smart regulation" now the official European concept for regulatory quality, can be a good topic for discussion.