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 Some texts are outdated and do not incorporate improvements in cotton grading/standardisation and marketing.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.

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.)

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.

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.

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.

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]