Smart Regulation blog and LinkedIn group

Last month, this blog changed its name from Regulatory Quality to Smart Regulation, explaining the reasons for the change.

Two further steps have been taken to facilitate our work together in monitoring changes and contributing to spreading the good principles and success stories:

- the blog can now be accessed by a new URL which is simply: http://smartregulation.net/ Similarly, contributions can be sent to montin AT-sign smartregulation.net

- to stay informed of new content and contribute to discussions, do consider joining  the LinkedIn Group named "Smart Regulation" and be part of a growing community of similarly minded expert colleagues around the world, numbering more than 250 in 50 different countries. I recommend reading the recent discussion about the significance of the move to the new concept in many countries. To make the group's work more available to external people interested, the group is now "open". 

You can also register as a "follower" thereby signaling your appreciation of the blog.

SME minister announces 1 billion euros red tape cuts (France)

As reported earlier in this blog, today a major stakeholder event was held in Paris to close the consultation cycle prior to the launch of a new package of red tape cuts. Minister in charge of SMEs Mr Frédéric Lefebvre announced this morning that the programme of "immersion" of officials in private companies, and the series of 22 regional hearings had yielded a rich catalogue of (80)simplification measures that should substantially improve the regulatory environment, and "give back" 1 billion euros to business. More than 700 suggestions had been collected and processed to produce the package that addresses the most irritating and costly procedures. Data consolidated for the conference shows that what companies in France would most appreciate would be a "single contact point" for each dossier they must file, to get a clearer view of their obligations and how to meet them without being sent from one desk to another, a step towards a type of "virtual one-stop-shop."
Co-chairing the event was Mr Jean-Luc Warsmann, president of the legal affairs committee of the national assembly and author of three simplification bills. The news there is also good, with the adoption earlier this month of the fifth simplification law, which has not yet been enacted however due to a referral to the Constitutional Court. Comments on the blogosphere or the press question the complexity of the so-called simplification measures, or their apparent disconnection with the content of the omnibus (for example the clause on the national school of administration that is being referred to the constitutional court.)

Swedish business sceptical about red tape reduction results

The Board of Swedish Industry and Commerce for Better Regulation (NNR) has just published a report investigating the impact of recent official measures concerning the regulatory environment ("The Swedish agenda for rules and regulations 2010"). Entrepreneurs were canvassed on issues such as local regulatory supervision, burdensome reporting requirements or questions relating to the regulatory system inhibiting business growth. The report concludes that 73% of companies have not noticed any significant difference in regulatory costs and suggests 9 measures to bring in effective improvements (NNR newsletter item from Oscar Fredriksson.)

New One Stop Shop in Yerevan

Network friend Arsen Nazaryan informs us of the recent launch in Yerevan (Armenia) of a One Stop Shop for business registration, "which will ease business entry, reduce administrative burden on businesses, and boost economic growth." The project is supported by the IFC's Armenia Regulatory Simplification – Doing Business Reform Project, in partnership with Austrian, Dutch and other donor agencies.
The high level interest for regulatory reform was also highlighted by news of a meeting organised by OSCE for the Prime Minister Tigran Sargsyan, with Scott Jacobs, a leading expert in regulatory reform who presented the global experience in the field of regulatory reform and the opportunities for implementation of such reforms in Armenia. According to a report on the governement website, Scott Jacobs hailed progress achieved by Armenia in improving the regulatory environment for business, making this country a regional leader in this area.

New Dutch red tape reduction programme

As announced by this blog at the end of January, a new policy has been announced by the Governement of the Netherlands, the leader in cutting red tape and originator of the SCM (standard cost model). The translation into English is now official, but not yet online. This blog has been sent the full text, which cannot be copied here, but here is one of the key paragraphs of the announcement.
The Government coalition agreement establishes a quantitative objective for reducing the administrative burden for businesses: a 10% reduction in net costs to 2012 and a 5% reduction in costs for subsequent years.
Regulatory burden is about more than just the administrative burden. The Businesses' Regulatory Burdens Commission is clear: businesses also see compliance costs, poor service on the part of the government and supervisory costs as 'regulatory costs'. The Programme does not therefore solely deal with the administrative burden. The Government wants to bring about a reduction in the regulatory burden experienced by the business sector. Therefore also qualitative reduction measure will be taken.
The approach to achieving these goals can be divided into four overlapping and complementary components:
A. quantitative targets;
B. preventing new regulatory burden;
C. improving services;
D. trust and supervision. (end of quote)
Experts will want to examine each word and sentence of this text which is rich in innovations to be clarified in coming weeks. Readers will be informed as soon as the full text is uploaded on an official NL site.

But what is Smart Regulation?

This blog is sometimes asked by readers "what is smart regulation", how does it relate to its predecessor "better regulation"? What success can be expect from the new concept? Well, readers can start by reading the article by the editor of this blog, which was published simultaneously with the publication of the European Commission's communication on subject dated 8 October 2010. This article draws a brief history of better regulation and the origin of smart reg. It examines more in detail the development of evaluation, which is to take on a more prominent role in the new policy. For a more recent analysis, they may also refer to an article in the current issue (1/2011) of the European Journal of Risk Regulation – EJRR (requires payment).

UK steps closer to deregulation

A new policy statement has just been published by the UK government entitled "one-in, one-out: statement of new regulation"  Its first part is a "strategy for reducing regulation." At first view, it represents a hardening of the better regulation policy, as it calls the "removal of existing regulations that unnecessarily impede growths" (without mentioning any benefits). The Coalition's strategy is also to reduce the overall volume of new regulation by introducing regulation only as a last resort, improve the quality of any remaining new regulation and streamline enforcement regimes. The policy is based on feedback from business that "regulation is a significant barrier to growth. It wastes valuable work time, requires constant administration and leads to real losses for business and the economy." 

The statement also announces several measures including sunset clauses, a stop to goldplating, the confirmation of a three year moratorium on new domestic regulations for small businesses and a systematic review of the stock of legislation. The document is well worth reading and will set a new standard for like minded countries. (on a tip from Johannes M. Wolf, from BIS, editor's comments.)

Experts interested in the conceptual background may read a good review from the Institute of Public Affairs of Australia. Here is an extract to whet your appetite:

"Strategies for reducing regulation fall into two camps.

The first, a ‘bonfire of the rules', can be conducted in two ways. The route used in Australia and overseas in recent years has been sun-setting regulations and requiring them to be re-enacted after due consideration once a specified number of years has passed. Though this might have had some effect it is minor considering the magnitude of the task.

But a more successful regulation bonfire was the long and systematic culling of regulations that took place in England in the 200 years to the 1870s. It resulted in repealing four-fifths of the acts of parliament passed from the thirteenth century. Arguably, this was a progenitor and perpetuator of the industrial and commercial revolutions that have created the current living standards of the world today. But it required an enduring political will based on a general faith in market processes and scepticism about political processes.

The second strategy involves the creation of road blocks to further regulatory excess. In the Commonwealth and in Victoria, well resourced and expert bodies have been created to act as an obstacle to ill-thought through regulatory proposals or proposals that are not underpinned by government decisions. Refinements such as one-regulation-in, one-regulation-out are under consideration."

There is also an interesting list of methods to improve regulatory management on the site of the Canadian Red Tape Reduction Commission.

Admin burdens: Greek SCM operational

Friend of the network Maria Mousmouti, Executive Director of the Centre for European Constitutional Law and AB team leader, has informed this blog about the recent publication of a synthesis report on the Greek cutting red tape operation, which is starting to deliver on the commitment undertaken in the framework of the European Council 2007 decision. The report of the CECL, the research centre that carried out the SCM operation under ministry of interior contract, is well worth reading as it addresses most of the useful specifics: national target, methodology, phasing, scope, IT support, consultation of stakeholders and training for civil servants. More information on the dedicated website. 

Interesting report on Serbia and Western Balkans

It is my pleasure to point out the publication of an in-depth study on Regulatory Reform in transition countries, on the basis of the case of Serbia and other Western Balkan countries. This impressive opus was drafted by members of the network Slavica Penev, Senior Research Fellow, Institute of Economic Sciences, Belgrade and Andreja Marušić, Regulatory Reform Expert, Balkan Center for Regulatory Reform, in the framework of an IFC project supported by the Swedish Government (SIDA), as part of the project Regulatory reform in Serbia (2007-2010). It shows that the recent economic growth and competitiveness of Serbia and other Western Balkan countries is closely linked to the transition process and reform implementation. Regulatory reform was key to making possible the transition from socialist to market-oriented economy and bringing these countries closer to EU accession. The report found that in order to generate more balanced and sustainable growth, Western Balkan countries will need to discover new sources of growth, complete reform implementation and further improve their business and investment environments. The report is presented on the IFC list of new publications, or it can be directly downloaded as a pdf document. A book to keep for future reference. Congratulations to Slavica and Andreja !

EC treads cautiously between regulation and market

The conclusions of the European Council of 24/25 March  can be seen as a balancing act between the two main conceptions as to the best way of drawing Europe out of its financial difficulties. This is illustrated by the two main outcomes mentioned in "chapeau" page 1:

- the package of measures to exit the crisis, including the Euro Plus Pact (close to the Franco-German plan) and six new legislative proposals on economic governance;

- "robust action at the EU level to stimulate growth by strengthening the Single Market, reducing the overall burden of regulation and promoting trade with third countries," which incorporates a significant UK input (see Cameron proposals). A target date for adopting the Single Market Act is set at end 2012 and the importance of fully implementing the Services Directive is emphasized. The goal of reducing overall administative burdens is re-stated, including by exempting micro-enterprises from certain future regulations.

PM Cameron advises Brussels on growth

On 31 March, the British Prime Minister David Cameron offered a blueprint for reforming Europe and drive growth across the continent in coming years. The new document officialises the positions made public last week during the European Council, which was primarily devoted to growth strategy. See Euractiv article. Experts may want to check the UK Government's new pamphlet Let's Choose Growth setting out why and how Europe should boost economic growth. It contains a warning that if current trends continue, by the middle of the century, leading EU nations could fall out of the world's top-10 most powerful economies. The proposals make the case for action on growth, deregulation and completing the single market. To secure sustainable growth Mr Cameron is calling for action to be taken to complete the Single Market, unlock the benefits of trade and reduce the costs of doing business (making it easier for all companies to start up, grow, invest and take on staff). This requires reducing the overall burden on business of EU regulation over the life of this Commission, ensuring that new burdens are offset by savings elsewhere and exempting small business from regulatory burdens. It costs €593 to set up a business in Brazil, €641 in India and €644 in the US, but it costs on average €2,285 to do so in Europe.

Senate and National Assembly disagree on simplification bill (France)

On 29 March, the French Senate discussed in second reading the sixth simplification bill, tabled in August 2009. As already reported here, there is a disagreement between the two chambers on what such a text can include and up to a point how legal simplification should proceed. But they agree that the texts are too numerous and not always consistent, creating complexity for the economic actors. There are also misgivings about the size of the "omnibus:"  this 6th edition already comprised 150 articles when tabled, a figure that reached 200 after first reading in the NA. Following a fiercely critical report by its legal commission, the Senate has repealed 8 articles for not being appropriate for a simplification law, and re-established 10 from the initial draft, which had been deleted by the NA. In coming weeks the two houses will be negotiating a compromise. The items are in general quite arcane in spite of the good explanations on the online dossier, so it is difficult to judge who is right (from a BR point of view). We may however regret that article 8, opening alternatives channels of consultation (called "open" because they rely on internet) has been a victim of the purge. For others, such as the protection of users against "abnormal variations of their water bill" it may appear reasonable to avoid clogging the reform with such minor changes. Another problem is that the legislator may also be too process-oriented, as shown by another litigious item: the reduction of a number of government reports to parliament, which does not have a direct impact on users. So, in summary, watch this space !