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 2012

New RR package (Australia)

Earlier this month, the Australian government announced a package of regulatory reform measures to improve regulatory performance. As part of the reform package the Government has agreed to;
  • adopt a two-stage process for developing regulation impact statements (RISs);
  • strengthen the role of annual regulatory plans (ARPs); and
  • encourage better and more informed stakeholder consultation.
The Office of Best Practice Regulation will be preparing revised guidance material to reflect the new arrangements.
The current arrangements for Regulatory Impact Analysis are set out in the Government's Best Practice Regulation Handbook and commenced operation on 1 July 2010. The Government committed to reviewing the framework within two years. The Minister for Finance and Deregulation agreed in December 2011 that an independent review be conducted of the arrangements. The Review was conducted by Mr Robert Milliner and Mr David Borthwick AO PSM and was handed to the Minister on 20 April 2012. On 11 October 2012 the Government released a Preliminary Response to the RIA Review for four weeks public consultation. The results of the consultation have informed the Final Response. For more, there is also a media release.

UK Gov claims success of deregulation

According to a press release from BIS on 17 Dec.," the UK government is winning the war against red tape." The Fifth Statement of New Regulation reports that the overall closing balance for 'One-in, One-out', the Government rule that dictates that every new cost on business must be balanced by an equivalent saving, is predicted to be around £836 million since January 2011. These figures are independently verified.
Additionally, the statement shows that the Government expects to reduce the regulatory burden by around a further £83 million between January 2013 - when 'One-in, One-Out' is replaced by 'One-in, Two-out' - and June 2013. Expected measures include reforms to environmental regulation, employment law and consumer law.

Recent deregulatory measures include:
  • Changes to modernise and simplify the registration of company charges, saving £21.9 million.
  • A series of changes to building regulations to reduce cost and complexity for industry.
  • Less heavy-handed Health and Safety regulations for low-risk businesses including shop and offices.
  • Improvements to speed up processes covering adoption and foster-carer eligibility.

Deregulation agenda in France

Yesterday (18 Dec.) in line with previously announced plans, the first meeting of the interministerial committee on modernisation of public action confirmed the objectives and ways of controling the regulatory flow, with a set of measures seen by some observers (for example Acteurs Publics article) as a "plan antinormes", something close to a deregulation agenda. This initiative is however primarily aimed at helping local government authorities face the constant stream of new rules from the centre, publicly denounced as excessive by President Hollande, and now the prime concern of better regulation in France.
The array of tools to be used include a better evaluation of public policies, and a "one-in, one-out" rule already announced by President Hollande.
For the wider context of administrative reform, see the PM's declaration closing the CIMAP meeting (VB.)

EC Smart Regulation: what's new?

The Communication of 12 December 2012 (see previous post) has outlined the future smart regulation (SR) initiatives of the European Commission for the next two years, in a carefully worded programme of action placed under the concept of "regulatory fitness". What new content can be found in this document (SR2), or is it a reformulation and confirmation of past proposals? To answer this question, one must compare the new text with its predecessor, the 8 October 2010 communication (SR1).
- some language shifts: the focus of the strategy is no longer "citizens and businesses" as in SR1, but adds "workers" to the addressees or benefiaries of the initiatives. This could be viewed as confirmation that the rebalancing between economic, and social, objectives, is continuing, though the overall aim of the policy is "responding to the economic imperatives";
- a new emphasis on "regulatory fitness", presented in 2010 as an exploratory dimension, now mainstream in the SR agenda;
- in keeping with the evolution in member states and the OECD, a widening of the impacts of regulation to include, beyond administrative burdens, the full "regulatory costs" or burdens, which classically include compliance costs; SR2 systematically avoids the old terminology "administrative" burdens;
- expressly declining to follow some "leading" member states in seeking quantitative reduction targets, whether sectoral or net targets, in favour of "a more tailored approach with an assessment of actual benefits and costs;"
- some further insistence on the responsibility of member states in the creation of regulatory burdens by inefficient transposition or "gold-plating" though the word is not used;
- the announcement of the REFIT programme to succeed, with a wider mandate, the action programme for administrative burden reduction (now redesignated "ABR", on the basis of the fitness check pilot schemes, with strengthened planning starting with the 2014 work programme; REFIT to include an "ABR Plus" programme focusing, with the help of the Stoiber group, on how member states have applied the recent (2007-2012) reduction measures decided at the EU level.

12 December 2012

New EC communication on Smart Regulation

Experts will need to examine a new milestone in the history of smart regulation: The Communication on EU Regulatory Fitness (December 2012) takes stock of the progress achieved since the launch of the Commission's Smart Regulation agenda in 2010. It also outlines how EU legislation can achieve its objectives even more effectively and efficiently. It is accompanied by two Staff Working Document reporting on the final results of the "Review of the Commission Consultation Policy" and of the "Action Programme for Reducing Administrative Burdens in the EU" The package finally includes a Press release "Smart regulation: ensuring that European laws benefit people and businesses"and an EC Memo.
From the press release: "Today's Communication presents the state of play of the Commission's smart regulation efforts and proposes measures to further advance the smart regulation agenda. In 2010, the Commission launched its Smart Regulation agenda to further improve the quality of EU legislation to enhance growth, jobs and competitiveness. Smart Regulation targets the whole policy cycle, from when a policy is designed to when it is put in place and finally evaluated. To put evidence even more at the heart of policy-making, a thorough impact assessment system has been complemented with new measures improving the evaluation of existing policies and the strengthening the voice of those directly affected by its initiatives. The reduction of administrative burden by 25% between 2007 and 2012 has been pursued in parallel and is expected, in the medium-term, to lead to an increase of 1.4% in EU GDP, equivalent to EUR 150 bn."
See also the Better Regulation page on the EC's website.
Also recently sent to the European Parliament, the EC's 29th annual report on monitoring the application of EU law , which gives the latest statistics on transposition and infraction procedures.

European Council confirms competitiveness policy

The Conclusions of the Competitiveness Council 10-11 December do not contain any significantly new commitments from the Member States, but confirm, on a number of specific of issues, orientations proposed by the Barroso II Commission. Your blogger has read those documents for you and selected a few useful passages concerning simplification and the reduction of the regulatory burden:
  • Simplification and flexibilisation of procurement procedures : The package provides for a simplification and flexibilisation of the procedural regime set by the current rules, which date back to 2004. To this end, it contains measures to make procurement easier and administratively less burdensome and to create flexibility for public authorities enabling better procurement outcomes. Promotion of electronic procurement as a more user-friendly feature of procurement procedures is throughout the package a cornerstone of the simplification process.
  • Review of accounting requirements for companies: "The Council took note of the progress made on the review and simplification of the accounting rules applicable to EU companies. The key objectives of the review include the reduction of administrative burden and the application of simplified accounting rules for SMEs" (...);
  • Single Market Act II: "The Council adopted conclusions on the second set of new priority proposals presented by the Commission on 3 October 2012 under the "Single Market Act II." These proposals will supplement the first set of measures of the Single Market Act I package for deepening and reinforcing the single market in order to create economic growth and jobs. Among other elements, the conclusions highlight the necessity for the single market to rest upon a strong economic and social basis and the importance for the SMA II actions to address the concerns of citizens and businesses.
  • "A stronger European industry for growth and economic recovery:" The Council invites the Commission to take forward further initiatives together with Member States, businesses and other stakeholders to reduce regulatory burden and boost the high innovation and productivity growth potential of EU industry, including SMEs; emphasises that competitiveness proofing has a prominent role to play to ensure the capacity to innovate, the consistency of rules and to prevent unnecessary red tape and compliance costs; The cost of crossing the borders in the Single Market, by having to comply with different national legislation, should also be taken into account; (...) Industrial Policy has to take care that no unnecessary burdens are created by new EU regulation in various policy areas (which are listed as SMEs, cohesion, trade, research. and innovation, environmental, climate, energy, transport, ICT, consumer, competition and state aid policies).

11 December 2012

France cuts red tape in competitiveness drive

Last week, the French government published a very complete press pack on the National Pact for Growth, Competitiveness and Employment, (the download includes anEnglish translation) which is a particularly welcome document for all experts monitoring, for comparative purposes, the new official policy.
Approach: As regards red tape onbusiness, the approach is spelt out in section VII of the paper ("simplfify administrative procedures and the regulatory framework surrounding business"): the government confirms its commitment "to exploiting all possible drivers to make things easier for companies (SMEs in particular), reduce the administrative burden on them and reduce administration processing times. These objectives will be pursued in the general interest and in line with Government guidelines in terms of ecology, public health, worker and consumer protection, etc."
How will the new policy be delivered: "Working closely with companies and their representatives, an initial multi-year programme to simplify administrative procedures is to be developed" by the next meeting of the Conseil interministériel pour la modernisation de l'action publique (CIMAP) in December 2012. It can be updated regularly with proposals from companies and ministers. Progress of this work will be monitored on the basis of precise indicators decided by companies and the CIMAP (quarterly). Companies will be closely involved in developing and monitoring the simplification measures.
Fast-track actions:
  • a five-pronged approach to reducing red tape on companies ("tell us just once" scheme to reduce information obligations, single declaration process for social information, streamline commercial property procedures, simplify aid mechanisms, limit gold-plating of EU law);
  • a sustained red tape cutting exercise under the authority of the Prime Minister;
  • an "SME test" for new draft legislation with the strongest potential impact on SMEs, to include tax issues;
  • by the end of 2012, a "rationalisation" drive on the tax burden, on the basis of zero net growth: no new tax to be levied without a corresponding reduction.
Departments working to support the policy (see also previous post):

Czech POINT "All in one place"

The Czech ministry of the interior has recently published a short report on the success of its initiative to help citizens in their relations with the administration: Czech POINT is a network of assisted public administration centres where each citizen can view and update, from a single access point, their personal information as stored in official registers as well as file applications.
Czech POINT (a kind of one-stop-shop) stands for "Czech Filling and Verification Information National Terminal. "

“Main objective of the project is the motto All in one place!. In the future, citizens will have access to Public Administration services not only at the Czech POINTs, but also via the Internet. Czech POINT is the most comfortable way of communicating with the authorities and institutions from a single place. The system is well-designed and I hope that it becomes quickly and spontaneously used by citizens and subsequently also requested,” said Minister of the Interior Ivan Langer.

07 December 2012

Self regulatory body for UK press, recommended

Following a widely report scandal on phone hacking, UK Prime Minister David Cameron ordered a public inquiry into improving the culture, practices, and ethics of the British press. The inquiry concluded last week with a long-awaited report from Judge Brian Leveson, who recommended the creation of “an independent self-regulatory regime” underpinned by the law to help police the industry. Acting independent of Parliament, the regulator would need to have the power to impose a range of sanctions, including fines, demands for apologies, and reporting corrections. If industry did not create its own effective entity, Leveson called for Parliament to pass legislation to give necessary legal powers to a self-regulatory body and establish standards.
Among other recommendations in report:
  • A committee composed of newspaper editors and independent members must establish a Standards Code for ethical journalism;
  • The proposed regulatory body would have an arbitration system in place allowing victims to seek redress without the expense of costly litigation;
  • The proposed regulator would replace the Press Complaints Commission (PCC), a voluntary regulatory body with no legal powers. Newspapers may choose to be regulated by the Office of Communications, which currently regulates British broadcasting, the most trusted form of news in Britain.
For more, see RegBlog analysis.

EU Internal Market still marred by regulatory barriers

Last week, the European Commission presented its annual report on the state of the internal market integration, with a focus on areas, such as services and network industries, where there is a strong growth potential, provided regulatory barriers are removed. In spite of overall progress of integration, the report finds that some barriers remain in services, of which it listed the main ones:
  • double regulation (enterprises need to comply with both home and host country rules), the uncertainty about the rules applying to cross-border service provision on a temporary basis,
  • the heterogeneity of regulation of professions (especially the scope of reserved activities), the diverse quality of the Points of Single Contact, the low use of the Internal Market Information system.
  • Specific problems in retail and wholesale, construction, and public procurement
This week (4 Dec), addressing one of the identified weaknesses, a new Regulation giving a solid legal basis for the Internal Market Information System entered into force, following approval by the EU legislator in October. It intends to provide strong guarantees for the protection of personal data handled in this system, which is already being used by more than 7 000 authorities across Europe.

EU perfects suppression of exequatur on civil & commercial judgments

According to a press release,the European Council adopted on 6 December the recast (amended and codified version) of a regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the so-called "Brussels I" regulation) including a number of new improvements. The purpose of this regulation is to make the circulation of judgments in civil and commercial matters easier and faster within the Union, in line with the principle of mutual recognition and the Stockholm Programme guidelines (a multiannual set of measures to develop an area of security, freedom and jutice). The updated instrument gives further substance to the principle of free circulation of judgments in civil and commercial matters by developing certain safeguards, including provisions to unify the rules of conflict of jurisdiction and to ensure better recognition and enforcement of judgments given across the Union.

Chinese officials to use plain language

According to the report today in China Daily, the newly elected Party leader Xi Jinping gave support to maintaining economic growth and persevering with market-oriented reforms in the face of multiple risks in the economy. The government should continue its proactive fiscal and prudent monetary policies next year and improve the economy's dynamics, said Me Xi at a symposium held last week with non-Party figures in Beijing. Among the policies required, the new leader cited more efficient and less showy administration and slashing red tape.
At a later event, the new leader insisted on communicating in a more transparent and efficient way with the citizens, by first avoiding jargon and empty words.

27 November 2012

"Like-minded" MS call for strong Smart Regulation Action Plan

Last week, in a landmark letter to President Barroso, the ministers in charge of economic affairs of 13 Member States called on the European Commission to inter alia "go beyond looking at administrative burdens (also including compliance costs; consider sectoral targets... and produce a roadmap to reduce the overall regulatory burden over the next 2 years." The letter also calls to publish an annual statement of the total net costs to business of new legislative proposals and maintain an annual balance of close to zero net costs. The rest of the 10 Point Plan addresses other dimensions of smart regulation (RIA, the Impact Assessment Board, the Think Small First principle, fitness checks, and common commencement dates.)
For positions agreed by all 27 MS, the best source is the regular Council conclusions (see for instance June 2012 Conclusions under Danish presidency) which are of course more consensual.
It is not rare that a group of MS publish a joint position on the development of smart regulation, see for instance the report "Smart Regulation: a cleaner, fairer and more competitive EU" issued by the UK, The Netherlands and Denmark in March 2010, but up to now, this group had not got so close to a majority of MS.
This new joint letter intervenes at a moment when the European Commission is finalising its Communication on "EU Regulatory Fitness", to be published on 12 December, two years after the issuance of its Communication on "Smart Regulation in the EU." In the past months, the Commission has been taking stock of the progress made and drawing lessons from its experience. A stakeholder consultation was open from June to September to collect views and proposals to inform the next communication. The Commission website publishes the consultation document and all 118 contributions received, among which those of European Chambers of Commerce and Industry (Eurochambres) and Businesss Europe. Both organisations strongly support the smart regulation process encompassing the entire policy cycle and in slightly different ways, their contributions both offer much technical expertise.

New source of expertise on Smart Regulation: Latin-Reg

Central and South American experts, led by Mexico's chief smart regulator Alfonso Carballo, are uniting to share news and lessons learnt from current projects. Latin-Reg is a new site, still partly under development, offering a clearing house for regulatory reform expert contributions in English and in Spanish originating from the region. Authors include Gustavo Mendoza, Margherita Corina, Rafael Hernandez and others.
Among the first papers in English:
- the (Mexico) System for Rapid Business Start-up (SARE) to promote regulatory simplification at the municipal level;
- the subnational regulatory managemetn systems, an adaptation of the OECD "Indicators of Regulatory Management Systems", to the federal structure of Mexico;
- benefits derived from the regulatory burden reduction program.
A site well worth visiting regularly. Spanish speaking experts will also be interested in the blog "Smart Regulation in Spanish."

How regulation influences companies' location

Emmanouil Schizas (London) points us to an interesting article published by the World Bank and entitled "Is better information always good news ? international corporate strategy and regulation." This paper develops a simple model to analyze the interaction between strategic corporate public good provision, international firm location and national regulation. An information-based strategic corporate public good provision mechanism is proposed to shed light on recent firm behavior within different regulatory environments.

MPs call for external scrutiny of public policies (France)

The French National Assembly (Evaluation and Control Committee), in its 22 November meeting (minutes just published) continued discussion of options for the modernisation of public action, the new concept which has replaced administrative reform in France. Two MP rapporteurs who had filed a December 2011 report on the comprehensive operation of general review of public policies (RGPP in French) have updated their analysis and now recommend that any future modernisation strategy be preceded by a systematic evaluation of the public policies concerned. What is new is that the Mr Cornut-Gentille suggests that the evaluation be done not as usual by an administrative body but by an independent "personality" (=VIP) "invested with a degree of legitimacy within the administrations based on their authority and willingness to reform." See reactions (including international comments) on the MP's official website. The Commitee endorsed the new report and set up a small parliamentary team to supervise its implementation. This keen interest of Parliament in administrative reform illustrates the importance of the institutional design issues at stake, and more specifically the "multi-level" issues of local governance, which will be revisited again in coming reforms. Last week an amendment was introduced by Parliament into the 2013 Budget act to oblige government to provide more regular information on progress of administrative reform.

23 November 2012

New Dutch methodology to reduce regulatory costs

Delegates to the twice yearly meeting of (European) Directors and Experts of Better Regulation (DEBR) in Dublin (22-23 November) were informed about recent research and testing of a new methodology to remove or lower obstacles to business innovation and growth by way of further reductions in the regulatory burdens. A Cost-driven Approach to Regulatory Burdens (CAR) offers a change of perspective by taking as a starting point the actual costs incurred in companies to comply with regulation, irrespective of which legislation is at the origin of the cost. The new methodology, developed by SIRA Consulting in the Netherlands, a company to which we already owe the widely applied SCM, is being tested on two pilot studies (chemical industries and European bakeries) and is expected to be finalised during 2013. It seeks to correct some of the limitations of the Standard Cost Model. Delegates were impressed by the conceptual shift underway, but expressed concern that the new method may be expensive and/or difficult to implement. This contribution enriches the discussion started earlier this year by a key paper from Germany: Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government, which also aims to address the full range of regulatory costs.

One-in, two out to further cut red tape (UK)

The costs of red tape on business will be slashed at double the present rate, according to a new measure announced two days ago by the UK government.
From January 2013, every new regulation that imposes a new financial burden on firms must be offset by reductions in red tape that will save double those costs.
The new 'One-in, Two-out' rule will be imposed across all ministries, and will apply to all domestic regulation affecting businesses and voluntary organisations.
It will replace 'One-in, One-out', which requires the costs of every new regulation to be matched by savings of an equivalent amount. According to BIS, this policy "has already reduced net costs on business by almost £1bn since January 2011 helping to make government leaner, fitter and more focused on what businesses need, enabling them to get ahead and compete in the global economy."


13 November 2012

Indian reform caught in red tape

“India's boldest attempt in two decades to sweep away the remnants of the License Raj permit system that has crippled infrastructure development has fallen victim to the very scourge it was designed to defeat. A proposal for a government panel (a “National Investment Board”) chaired by Prime Minister to fast-track major infrastructure projects and boost a flagging economy seems to have stalled amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus” (Indian Express). See also Times of India article.

Swedish experts clarify Gold-Plating of EU legislation

The Board of Swedish Industry and Commerce for Better Regulation (NNR) and the Swedish Better Regulation Council (Regelrådet) have published a joint report with recommendations for how to improve implementation of EU legislation 'Clarifying Gold-Plating – Better Implementation of EU Legislation'.
The term 'to gold-plate' is frequently used in regulatory contexts in the EU when national implementation of EU legislation exceeds what a legal act requires while staying within legality. There seems to be agreement that this practice can lead to increased costs, unnecessary regulatory burdens and competitive disadvantages for business, as well as a fractured single market. This in turn hampers growth and job creation. However, there are different understandings of what the concept gold-plating actually covers. Some people assign more to the concept, and others less. This uncertainty about how to define gold-plating was the starting point for NNR's and the Swedish Better Regulation Council's joint project.
The recommendations in the report are addressed to the Swedish Government but could be applicable in other EU Member States as well. The authors call for clarification on how the concept 'gold-plating' should be interpreted to allow for objective discussions on how to solve problems related to it. A clear definition would enable those responsible for implementation of EU legislation to explain and justify if and why gold-plating is used. Further information from Karin Atthoff, Senior Advisor, The Board of Swedish Industry and Commerce for Better Regulation. 


12 November 2012

"Rule of law" ranking (World Justice Project)

Soon released:  the WJP Rule of Law Index 2012 report covering 97 countries and jurisdictions, representing over 94 percent of the world's population, will be released on November 28. The Index provides new data on eight dimensions of the rule of law: limited government powers; absence of corruption; order and security; fundamental rights; open government; regulatory enforcement; civil justice; and criminal justice. These factors are further disaggregated into 52 sub-factors. Together, they provide a comprehensive picture of rule of law compliance.

The Index rankings and scores are built from over 400 variables drawn from two new data sources: (i) a general population poll (GPP), designed by the WJP and conducted by leading local polling companies using a probability sample of 1,000 respondents in the three largest cities of each country; and (ii) a qualified respondents' questionnaire (QRQ) completed by in-country experts in civil and commercial law, criminal law, labor law, and public health. To date, over 100,000 people and 2,500 experts have been interviewed in the following 97 countries and jurisdictions (with The Colombist).

France cuts red tape in new "Competitiveness covenant"

Acting very fast on the basis of the Gallois report filed two days before, the French government announced on 9 November a national pact (covenant) for growth, competitiveness and jobs, which includes powerful measures such as a €20bn reduction of social contributions paid by business and a number of tax changes. Among the "non-cost-of-labour" measures, we can note the "simplification and stabilisation of the regulatory environment" of business, to be achieved by streamlining five recurring administrative procedures and "stabilising", over the five years of the legislature, five key tax schemes. Other measure promise to improve the administation's footprint on the economy: more efficient "commercial justice" and helping SMEs and innovating companies access public orders.

Heseltine report calls for growth strategy

Presenting his "independent" review on 31 October, "No stone unturned in pursuit of growth" the former deputy prime minister Michael Heseltine "urged the government to build on what it is already doing, to speed up the process and to leave no stone unturned in pursuit of growth."
The report sets out a comprehensive economic plan to improve the UK’s ability to create wealth. His independent report makes the case for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector. It makes 89 recommendations which aim to:
  • inject stability into the economy
  • create the conditions for growth, and
  • maximise the performance of the UK.
At the heart of the proposals are measures to unleash the potential of local economies and leaders and enable every part of the UK economy to raise its game.
In his presentation, Lord Heseltine stressed governance and implementation issues:
"The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.
As well as a clear strategy, the government needs the means by which it can deliver it."
"The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.
As well as a clear strategy, the government needs the means by which it can deliver it."
(see BIS site.)

China tests regulatory reform at province level

The regulatory reform scene in China has up to now not provided much news, but this may be soon changing. According to the People's Daily online published yesterday, "the central government has made Guangdong Province a pilot region for reform of the state and provincial regulatory and administrative process by removing or adjusting 100 regulations that require government approval, the Guangzhou-based Nandu Daily reported Monday.
The State Council recently issued an official document that approves the trial reforms during the 12th Five-Year Plan period (2011-15). Thirty-four administrative approval items will be canceled and the administration of 34 other items will be transferred from the province to lower levels of government. In addition, 32 items will be handed over to industry associations. The decision was made at an executive meeting of the cabinet presided over by Premier Wen Jiabao in August, the newspaper said.
The move is in a bid to reduce approval requirements and let markets allocate resources more efficiently.
On the list of the 34 regulations that have been canceled are the annual examination of tour guides, approval of building companies that conduct small-volume trade with Taiwan and approval of used car appraisal agencies.
Administration of 32 items will be gradually handed over to associations of specific industries, which aims at reducing government intervention and giving full play to markets. This list includes the annual check of asset evaluation agencies, registration of software products and hotel star ratings.
Provincial government departments will administer 19 regulations, while 15 others will be regulated by lower level governments. This covers programs in energy, transportation, raw materials, mechanic manufacturing and establishing local enterprises.
"The reform of administrative approval will help transform the government's functions, clarify its responsibilities and make more room for social development. This is to build a bigger society and smaller government," Zhu Lijia, a public administration professor with the Chinese Academy of Governance, told the Global Times.

05 November 2012

Blog breaks audience records

For the second month running, Smart Regulation has reached record numbers of visits, doubling its audience since August, with 2,505 visits in September, 3,631 in October, against only 1,776 in August. For you BR experts, this means that it is a convenient way to reach colleagues and an informed general public for your news about new concepts or results of national policies in support of the smart use of regulation. Contributions always welcome and immediately posted provided they convey some newsworthy content.

New deal for French public administration reform

Last Wednesday (31 Oct), the French Council of Ministers announced a series of institutional changes aimed at giving a fresh impetus to public administration reform (PAR), in accordance with the electoral commitments of the new (socialist) government:
- transfer (back) of the prime agency in charge from Economy/finance/civil service to the Prime Minister's office: the DG State Modernisation staff are transferred back to Matignon (the PM's office) to create the Secretariat General for Public Action Modernisation; to our knowledge there is no official assessment of the five years of PAR under Finance, nor of the reasons for the new setup;
- creation of a supervisory body, the Interministerial Committee for Public Action Modernisation;
- in the detail of the functions entrusted to the new SG, and the announced agenday for the first meeting of the Interministerial Committee, several themes already identified as new priorities are confirmed: the fine-tuning of local government (under the heading of "partnering public policy") including simplifying regulation inside government, and the further integration of electronic services to PAR. Several existing policies are endorsed, like quality of service and legal simplification. The new strategy also intends to place civil service HR higher on the PAR agenda.

Better Regulation in support of constitutional and civil right changes (Morocco)

Your blogger was priviledged to be invited to a conference in Rabat (Morocco) dedicated to strengthening the "legal capacity" of the Ministry of Interior and its deconcentrated services. The event was organised by OECD SIGMA within the Morocco-European Union Programme supporting the democratic transition, and was linked to the extensive legal reforms required by the adoption in July 2011 of the new Moroccan constitution.
More specifically, the new constitution introduces the right to good administration and governance, which covers inter alia quality of legislation. The two day conference 'The Challenges for Drafting Quality Legal Texts' brought together 14 experts and some 150 participants stemming from different government services with legislative responsibility and discussed topical elements of better legislation in three different panels. The first panel was dedicated to the meaning and the requirements of the rule of law for good administration and the quality of the law. The second panel looked into Politics, the law and budgetary choices, and the final third panel considered the demands of better lawmaking for legislative drafting. Experts like Prof. Jacques Ziller (University of Pavia Italy), Mme Pascale Léglise (French Court of Administrative Appeal), Prof. Wim Voermans (IAL, University of Leiden, the Netherlands), Ramiro Riera (former Inspector General of public administration France) and Joana Mendes (Amsterdam University Netherlands), presented and discussed in the first panel. Justice Benabedellah of the Moroccan Supreme Court, Charles-Henri Montin (French Ministry of Finance), prof. Miquel Martin-Casals (University of Girona, Spain) and Christos Ntouchanis (Member of the Council of State Greece) lead the way in the second panel. In the third panel (held on the second day) prof. Herwig Hofmann (University of Luxembourg) Abdelilah Fountir (Secretariat General of the Moroccan government), Mohamed Hanine (President of the Moroccan Human Rights Commission), Edward Donelan (of Sigma and formerly the Irish judiciary) en C.H. Montin, W.Voermans and M. Martin-Casals.
The conference was a very lively one with abundant questions and comments from the floor. The issues of rule of law and good quality of drafting and legislation are afoot in Morocco one can feel. The conference concluded with eight recommendations to the Moroccan government, all of them amounting to setting up a drafting manual, exchange of knowledge, training and capacity building in the institutions with legislative responsibility in the Kingdom of Morocco. The Moroccan government and Sigma are pursuing their cooperation in this field in the upcoming years (with Wim Voermans). Blogger's presentions (in French) are available from the Publications page.

24 October 2012

National delegates to discuss Smart Regulation in Dublin

Though reserved to invited officials from the 27 member states of the European Union, the bi-annual meeting of the "Directors and Experts of Better Regulation" is always an important event to monitor progress made on the policy and discuss new developments to be expected or encouraged. For the next meeting staged in Dublin on 22-23 November, the incoming Irish presidency is offering a stimulating agenda under the banner: "Delivering Growth and Jobs: Effective Smart Regulation in Practice." Topics will centre on implementation issues, with updates on other themes such as "benefits of legislation," SME policy, compliance costs, behavioral economics and several more. In most cases, the presidency publishes summaries or presentations made by delegates, which will be recorded by this blog. Finally, the meetings will be inspired by the grand settings of Dublin castle and Farmleigh House.

France: modernisation and competitiveness

As reported earlier this month, intense discussions are currently on-going (following the change of government) in the French political sphere about the future strategies for modernising public administration and making the national economy more competitive. This debate may interest experts as the key proposals are comparatively unconventional. Here is a summary of current trends, from press articles.

Best Practice Regulation annual compliance report (Australia)

On 17 October 2012, the Office of Best Practice Regulation (OBPR) released its annual compliance report, the Best Practice Regulation Report 2011-12. This report is the OBPR's independent assessment of compliance with the Australian Government and Council of Australian Governments (COAG) best practice regulation requirements. Essentially it answers the question whether a Regulation Impact Statement was prepared for the decision and if it was published. It also includes information about post-implementation reviews.
The 2011-12 report shows an increase in compliance with the Australian Government best practice regulation requirements. The number of non-compliant proposals fell from 16 to 9, and compliance at the decision-making stage increased in percentage terms from 75 per cent to 88 per cent. No agency had more than one example of non-compliance with the best practice regulation requirements.
The Australian Government prepared RISs on a broad range of issues including Australia’s negotiating framework regarding bluefin stock, regulatory changes to facilitate the rollout of the NBN and Australia’s plan for a clean energy future. Australian Government non-compliant proposals included measures to address problem gambling, tobacco plain packaging and revised export control orders for the live cattle trade.
The number of Prime Minister’s ‘exceptional circumstances’ exemptions granted decreased from 14 in 2010-11 to 5 in 2011-12. Proposals granted exemptions included reforms to the superannuation system and extending Telstra retail price controls to June 2014 (from our Federal correspondent).

23 October 2012

Doing Business 2013 just released

Today the World Bank and IFC release the 10th edition of their flagship report: "Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises" assesses regulations affecting domestic firms in 185 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 2011 through May 2012. Over the past decade, these reports have recorded nearly 2,000 regulatory reforms implemented by 180 economies.
Key findings (from the official site):
  • Poland was the global top improver in the past year. It enhanced the ease of doing business through four institutional or regulatory reforms, making it easier to register property, pay taxes, enforce contracts, and resolve insolvency.
  • Besides Poland, nine other economies are recognized as having the most improved ease of doing business across several areas of regulation as measured by the report: Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.
  • Worldwide, 108 economies implemented 201 regulatory reforms in 2011/12 making it easier to do business as measured by Doing Business. Reform efforts globally have focused on making it easier to start a new business, increasing the efficiency of tax administration and facilitating trade across international borders. Of the 201 regulatory reforms recorded in the past year, 44% focused on these 3 policy areas alone. Read about reforms.
  • Singapore topped the global ranking on the ease of doing business for the seventh consecutive year, followed by Hong Kong SAR, China,; New Zealand; the United States; and Denmark. Georgia was a new entrant to the top 10.

Australia perfects RIA requirements

On 11 October 2012, the Australian Government announced preliminary changes to the Australian Government RIA requirements, as a response to an independent review of the RIA process filed in April 2012. The major proposed change would be the introduction of a two stage RIS process, with an options paper to be followed by a details RIS. This is intended to encourage greater consultation by Government agencies.
The independent report was critical that some Ministers and agencies are not sufficiently committed to the RIA requirements, and recommends that the Government re-endorse and re-commit to the RIA process. The Government proposes to accept this recommendation.
The Government is holding a four week consultation period on the proposed changes with a view to announcing its final response by the end of 2012 (from our AUS federal correspondent.)

Simplifying environmental permits (Spain)

Last Thursday the Spanish Government declared that in the coming months the national legislation transposing the Directive on Industrial Emissions (formerly IPPC Directive) will be substantially streamlined in order to almost automatically extend the initial eight years "environmental permits" (provided no substantial modifications have been introduced), and also make it easier to change the permit " in the case of a "new substantial modification" in the industrial facilities. In addition to these legal changes, a better coordination between national, regional and local authorities will be required during implementation.
According to a CEOE 2011 Report on administrative burdens, in collaboration with the Spanish Ministry of Finance and Public Administrations, this measure, once implemented, will save Spanish companies an initial installment of €383m in administrative costs, followed by annual savings of €14,1m (from Ignacio Gafo, CEOE.)

22 October 2012

Mexico states strengthen multi-level governance

Your blogger was priviledged to be invited to the 30th meeting of the Regulatory Reform network jointly organised for the 32 united states of Mexico by COFEMER (the federal BR agency) and the State of Hidalgo in Pachuca. Opened by Governor Olvera, attended by more than 120 directors and experts of Better Regulation from 25 of the 32 states, and officials of the federal body in charge of BR, this event showed the long-term dedication of Mexico to regulatory reform and the will to constantly perfect the agenda.

11 October 2012

Announced: Regulatory Governance Conference in Mexico 17-19 October

The 30th national conference on improving regulation will be organised on 17-19 October by COFEMER (an agency of the Mexican ministry of economy) and the state of Hidalgo and will be devoted to Regulatory Governance, with an emphasis on drawing practical lessons for action at federal, state and local levels aiming at deregulation and administrative simplification. Information about programme and registration on the Hidalgo Government site.

Coming soon: Doing Business 2013

Experts be warned: the next World Bank flagship report (for us at least) will be issued on October 23, 2012 at 00.01 GMT (7 pm in Washington). Watch this space !

Three kinds of regulation (China)

Scholars and entrepreneurs exchanged insights at a symposium during the World Economic Forum's Annual Meeting of the New Champions in Tianjin. One of the key participants explained there were three kinds of regulations the government can make: hard, soft and smart. Smart regulation is defined as " an invisible hand to guide and promote innovation from the bottom up" especially in certain industries.

Deauvillle Partnership commits €80 m to transition

New York, 28 September, meeting of ministers of Foreign Affairs of countries engaged in the "Deauville Partnership with Arab Countries in Transition", one of the key channels through which international support is mobilized and coordinated for societies in the Middle East and North Africa going through transitions: the ministers "pledged USD 80 billion over the next two years in assistance to five Middle Eastern and North African countries that witnessed uprisings during the "so-called Arab Spring," and agreed to meet again in Kuwait November 21-22 to assess the situation and enhance dialogue among the partners."
See Chair's Summary of the Meeting on Japan MOFA site, and a summary on Sudan news agency SUNA.

04 October 2012

A. Gurria recommends BR for Indian growth

Extracts of an interview of Mr Angel Gurria, secretary general of OECD, published today in Forbes India, emphasizing the rôle of Better Regulation in the search for growth.
Q. What regulatory action do you advise for India?First of all, every country can do better in terms of regulation. We've been working with a host of European nations, with the United States, with Mexico, Turkey, Japan, and even with Australia, which has led the world for decades in terms of better regulation and simplification.
In India, there are three key areas where better regulation could help boost productivity and growth. First, by easing business regulation to boost entrepreneurship and dynamism, and to support job creation in the formal sector. Second, by further reducing the barriers to international trade and investment, including FDI, to boost competition and productivity. Third, by undertaking wide-ranging financial sector reforms to strengthen investment.
(...) As in every country in the world, there is also scope for simplification. A specific regulatory issue in India concerns the relationship between the federal government, the states and then local governments. State and local governments are bound by national laws. This relationship between the three levels of government sometimes produces three times the regulation and worse still, different types of regulation, which is time-consuming and expensive. For example, it has been well documented that the Indian central government and some state governments have achieved greater economic performance through enhancing the regulatory frameworks for a better environment for businesses. These efforts encourage investment, make it easier to start up a business, and to conduct business more generally. However, this has not happened in a concerted manner across different states or in a co-ordinated way. Tackling this issue head-on through a 'whole of government' approach will vastly improve the consistency and quality of the regulatory environment in India.
We can share with the Indians the successful experiences as well as some of the not so successful experiences from elsewhere so that they can save some time, effort and money. For example, in Mexico, the office of the controller working together with the OECD has done away with 12,000 norms, rules, codes, regulations, laws. Little steps, big steps, hard steps, but they have dramatically streamlined things.
Read more: http://forbesindia.com/article/special/india-has-its-own-homework-to-do-oecds-angel-gurria/33841/1#ixzz28Jv1L0DK

US presidential candidates debate regulation

REGBLOG, a very useful source of information and comment, carries today an analysis of the first of the campaign debates between Democrat Barak Obama and Republican Mitt Romney in their presidential race, which took place last night.
Says Regblog "one of the most telling moments of the debate came when the moderator asked the candidates for their views on the level of federal regulation in today’s economy. Obama declared that “it appears that [they have] got some agreement that a marketplace to work has to have some regulation.” Romney responded that while he agrees that “good regulation” is needed to support a functional free-market economy, government rules can become excessive and have “unintended consequences.” The full transcript of this part and the rest of the debate are equally interesting and worth checking out.

Single Market Act II (EC Communication)

Yesterday (3 October) the European Commission issued a Communication on its draft Single Market Act II, which contains a batch of 12 new proposals to modernise and deepen the Single Market , the biggest smart regulation exercise on record, comprising some 600 directives. The new package aims "to respond to a constantly changing world where social and demographic challenges, new technology and imperatives, such as climate change, must be incorporated in policy thinking." It builds on the SMA I (2011) and further perfects the work engaged since 1992, when the "internal market" was launched. The 12 priority areas of the package cover transport and energy networks, citizen and business mobility, the digital economy and "social entrepreneurship, cohesion and consumer confidence." See press release and FAQ for details, and visit Internal Market website.

03 October 2012

New red tape reduction plan (Canada)

On October 1, 2012 the Government of Canada released the Red Tape Reduction Action Plan report. This action plan details the systemic regulatory reforms the government is putting in place to address the Commission’s report. These fall under three major themes:
- Reducing burden on business:
- Making it easier to do business with regulators:
- Improving service and predictability:

OECD publishes review of RR in Indonesia

OECD has just released two important reports on Indonesia, a major world economy and one of its key partners: the 2012 Economic Survey and the Regulatory Reform Review of Indonesia, both developed through policy dialogue between OECD committees and officials of the government of Indonesia.
According to the press release late last week, "OECD’s first Review of Regulatory Reform for Indonesia looks at the changes to the regulatory framework which will be necessary to implement the development and growth agenda of the Indonesian Government, including the recommendations of the Economic Review. The report recommends that the Coordinating Ministry for Economic Affairs implements a government-wide policy to strengthen institutions, optimise co-ordination among ministries and improve regulations, based on international best practice. In particular, measures to further develop the Indonesian market and increase private investment in infrastructure need to be fostered by coherent policies. All new regulations, the Review stresses, should serve the public interest and not restrict trade, particularly in the priority areas of major infrastructure investment in the ports, rail and shipping sectors."

OECD reviews literature on measuring impact of regulatory policies

To target scarce resources for reform efforts, communicate progress and generate the needed political support for reforms, OECD countries require better information about where investments in programs to improve regulations should be focused to pay best growth and welfare dividends (which according to OECD can surpass 10% of GDP).
The OECD work on Measuring Regulatory Performance offers a framework to help countries evaluate the design and implementation of their regulatory and target their reform efforts. After two papers on regulatory performance, a third (authors David Parker and Colin Kirkpatrick) surveys the literature on existing attempts at measuring the contribution of regulatory policy to improved performance and gives some substance to a number of well-known truths (blogger’s summary):
- the effects of regulation are context specific: regulatory governance and the institutional framework in a country may mitigate the damaging effects of poor regulation. There is no one-size-fits-all solution and the regulatory management processes need to be adapted to meet each country‘s institutional and regulatory endowment.
- it is difficult to provide robust quantitative evidence of a causal relationship between a regulatory policy change and the impact on economic outcomes such as economic growth. This highlights the importance of evaluating the effects of regulatory policy and management in terms of better regulation outcomes, rather than relying only on evidence of economic impact;
- research has focused more on the costs of regulation than on the benefits and therefore does not necessarily capture the true welfare effects of regulation and therefore of reducing regulation;
- impacts of some of the components of the better regulation agenda (like consultation, RIA or ex-post evaluation) are still insufficiently studied in terms of the net economic benefits (tip from Helge Schroeder.)

01 October 2012

Less red tape on live music in pubs (UK)

From today, there will be less red tape on small businesses and venues that host live music events, announces BIS. Live unamplified music performed in any location, and live amplified music in on-licensed premises and workplaces for audiences of up to 200 people will no longer need a specific licence between 8am and 11pm.
Other changes to regulations applicable on 1 October include:
  • greater flexibility for small businesses to decide whether or not their company accounts should be audited.
  • more freedom for firms to determine the most appropriate set of accounting rules for them
  • Removing legislation that dictates the precise location and design of no smoking signs in workplaces

New directions for Smart Regulation (EU)

Experts on SR will be interested in a joint position paper published last Friday by the 5 European independent advisory boards (CZ, DK, NL, SI and UK) for cutting red tape and better regulation, in response to the Commission's consultation document on Smart Regulation. 
According to their press release, the boards "believe 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 in order to keep the achievements already made as well as to strive for further improvements. A new programme on smart regulation which includes an ambitious aim to reduce the overall regulatory burden should be launched in 2013. In our common position paper we highlight the following priorities:
  • Carrying out impact assessments for every new regulatory proposal
  • Improving the informative value of roadmaps
  • Making the Commission´s Impact Assessment Board more independent
  • Systematic ex post-evaluations from the end users perspective
  • Strengthening the role of the High Level Group
  • Consulting the public. (end of quote)."
Under these headings, the report makes some interesting practical proposals.

RIAs in the European Parliament

One of the weaknesses of EU Smart Regulation regularly identified by Council used to be the absence of RIAs on European Parliament (EP) draft legislation or amendments. This may be a thing of the past, since the EP's decision earlier this year to set up a "legislative assessment directorate" within the internal policies department.
According to information in a European Cement Association note, the new directorate will have a staff of 19 headed by a director (see vacancy notice) who has been recruited. It will also look at the potential impact of proposed legislation on individual MS policies. This in-house review of EU legislative proposals was long overdue since the advent of the Lisbon treaty, which gave the EP greater co-decision powers. MEPs would no longer have to rely on the European Commission's impact assessments, but would have their own researched justifications for their initiatives, thereby supporting the parliamentary positions in negotiations with the member states. The new directorate will be responsible for scrutiny of amendments by MEPs, and support the Parliament's role in economic surveillance of national budgetary policies. It will also conduct budgetary impact reviews.
The Parliament has also created an impact supervisory board, composed of 13 MEPs. The board's task is to set out the priorities for impact assessments, and decide how the Parliament will evaluate the impact that proposed EU legislation would have on individual policies in the 27 member states.
For background see file on EP Resolution dated 8 June 2011 on guaranteeing independent impact assessments and 3May 2012 meeting of the Stoiber Group, which noted that the new unit also examines "the cost of non-Europe" in all RIAs, under the term "European added value."
The new unit has already published an example of critical assessment of a Commission RIA, on the issue of the audit market (18 September 2012).

New modernisation policy in France

Today the French government is holding its second workshop on modernising "public action" (delivery of public policy), the first having taken place on 31 July. The most important topic is expected to be the "next stage of decentralisation," which will also be the theme of a government conference later this week, and of a bill to be tabled earlier next year in the Senate. Shifts in the distribution of responsibilities between levels of government, as well as local finance and investment reforms are on the agenda. A more general discussion on how to make the government more efficient will also be launched. The new policy should consider a landmark report on State Reform, commissioned in July by the Prime minister and filed last week by three General Inspectorates including the Inspection des Finances. This report finds that the General Review of Public Policies (RGPP) implemented since 2007 had generated savings of around 12 bn euros, with a reduction of the staff complement of around 3%. The new "renovation" policy is expected to take a less budgetary look, emphasize good HR management and extend to all three civil services (including local government and hospitals). Two new interministerial advisory bodies are planned dealing respectively with "renovation of public action" and "reinforced budget monitoring."
These are crucial times in France: last week saw the first budget of the Ayrault government, which includes 10bn of savings but also 20bn of new taxes. A national discussion is ongoing on if and how much this budget can contribute to reducing the public debt which now stands at 91% of GDP, as predicted by the Audit Court July report.

20 September 2012

"SR for Dummies" now in Spanish

Colombian BR expert Christian Gill has posted on his blog a very accurate translation into Spanish of our best seller "Smart Regulation for Dummies" or "in 1200 words". The text of the article, officially entitled "REGULACIÓN INTELIGENTE: Un Desafío Global para los formuladores de política pública" is already published in English, French and Arabic. The most interesting part of this article is a compendium of best practices from around the world, drawing from 15 countries and 3 international organisations, which experts should find useful when drawing up national smart regulation policies and adapting tools.
Presentation of article: "Actualmente la regulación inteligente es el conjunto más avanzado de principios y herramientas disponibles para ayudar a los responsables de la política pública en garantizar un uso más efectivo y transparente en el uso de la regulación como medio para garantizar sus objetivos de política. Este breve artículo ofrece una visión general de su desarrollo en los últimos 10 años, finalizando con un panorama de las mejores prácticas en el mundo."Another reference post, the most visited of Smart Regulation.net is HQ Definitions (712 hits to date since its posting in January 2010).

Australian Parliament cleans up stock of legislation

On 13 September 2012, the Australian Parliament passed legislation to remove about 12,000 regulations from the statute books. The Legislative Instruments Amendment (Sunsetting Measures) Act 2012 (according to MoF media release) enables thousands of unnecessary regulations to be removed in an efficient, streamlined process, without the need to repeal them one-by-one. These regulations are described as spent and redundant regulations.
A second set of amendments provides for a more efficient repeal or 'sunsetting' of regulations after 10 years, and facilitates reviews of those regulations, for example, by looking at regulations across a particular industry sector as a whole. The Act provides that the sunsetting dates for regulations are staggered, so that not all reviews of sunsetting regulations are due at the same time. This will enable the review of sunsetting regulations to be conducted in a more efficient and effective manner (from our Australian federal correspondent).         

Report on gold-plating (Sweden)

Yesterday, the Swedish Better Regulation Council and the Board of Swedish Industry and Commerce for Better Regulation presented a joint report on "gold-plating". "Better Regulation = no gold-plating ?" asks Oscar Fredriksson on our sister page on LinkedIn SR group, asking us to respond to the discussion.
For the moment, the report is in Swedish only, but it may soon be published in English. On the Board's website, there is already some good material on the issue, see for instance "Smart approach to the single market " (Feb 2012). The annual reports of the Swedish BR Council are also very interesting.

18 September 2012

Regulatory "coherence" helps regional economic integration (APEC)

In a previous post (November 2011) this blog reported action by APEC to strengthen good regulatory practices, following the the Honolulu declaration, to assist member economies establish closer economic and trade relations.
In 2012, under the general objective of reinforcing "regulatory coherence" as listed as a priority in the Honolulu declaration, APEC implemented a capacity building project to conduct regulatory impact analysis (RIA) training for APEC developing economies. The project, developed by Australia, and co-sponsored by Australia, Mexico, New Zealand and the Russian Federation, involved a series of training courses and workshops in interested developing economies, aimed at senior economic ministry and regulatory officials. For background, see 2011 NZ proposal to APEC. The first training course was provided by the Australian Office of Best Practice Regulation, with assistance from Mexico and New Zealand, to approximately 60 Russian officials on 9 and 10 February in Moscow. Subsequently, New Zealand provided training to Thailand and Malaysia, Mexico provided training to Chile and Peru, and Australia provided training to the Philippines. In the last two weeks of August, Australia, New Zealand and Mexico jointly provided training to Hong Kong and Chinese Taipei (see attached photo), and conducted an information exchange with China. Australia and New Zealand then conducted a workshop on regulatory impact analysis in Vietnam. For a more recent expression of this APEC policy, see Kazan (Russia) meeting of APEC ministers in charge of Trade (June 2012).

Agencies again in the spotlight (France)

After the Conseil d'Etat last week (see previous post), another senior body published yesterday its in-depth analysis of the Agency phenomenon under the title "The State and its Agencies", which is rich in public governance insights and is causing a national debate. The Inspection Générale des Finances had tabled its report in March, but it had been shelved because of the presidential election campaign and has just been released. Adopting a wider definition, the report finds 1244 agencies, under a multitude of statuses (including the categories excluded by the Conseil d'Etat, "operators" and independent regulators). The report is severe as to the proliferation of such agencies, chiefly because it cannot identify any real efficiency gain from such a solution. Among the 35 recommendations in the report, those related to the waste of public finance will be urgently addressed by a government which is currently looking for savings totalling some € 30 bn. The ministers in charge of finance and budget have also jointly announced that a review of government action will be launched in coming weeks to produce a global strategy of modernisation and reform of the State.

14 September 2012

Cutting red tape in Colombia

Having just spent one week in Bogota as a guest of the Colombian government (Planning Department), your blogger is in a position to complete and update the previous post on regulatory reform in Colombia.
The most important initiative is the decreto-ley anti-tramites,a red tape cutting and legal simplification exercise based on a delegation from Parliament to the president (Mr Santos) to take all steps required to repeal "burdensome or unnecessary" procedures during a six-month period ending in January 2012. A more complete description of its content is available on the Legislative Observer site, with most significant measures described on Urna de Cristal. This "'omnibus" streamlined many procedures, gave legal status to certain electronic records (like company accounts) and modernised many procedures, like replacing fingerprint ID by official documentation.
A public consultation on further steps is also under way where citizens are invited to "denounce" a time consuming or uselfess administrative procedure, under the banner of "Anti-Red-Tape Crusade". The site reports that 70,000 citizens have already contributed. Most popular demands: the deletion of certification of documents, especially the three-monhly declaration of existence (to prove you are not dead) or the authentication by notary of each sheet of company accounts.
Another channel, more specifically designed for business, is the Competitive Regulation program, which comprises an online questionnaire but also a schedule of regional roundtables by sector, set up by the ministry of industry, trade and tourism in partnership with private actors.
For the same stakeholders, the Confederation of Chambers of Commerce has set up a network of well endowed one-stop-shops for registering a new business or formalising an existing one, with offices throughout the country where new entrepreneurs can receive legal help and carry out all the related procedures.
Finally, under development, a single online database of all administrative procedures (SUIT) already helps citizens, business and public officials (each has a separate access module) find relevant legislation. The site contains the official forms as well as information on completing the requirements to secure an ID document, a passport, a driving licence, etc.

Extra "regulatory flexibility" in Pennsylvania

For experts interested in the variability of regulatory policies accross the United States, significant of a certain type of regulatory competition, here is a new development worth noting. The governor of Pennsylvania has just enacted a new act to protect SMEs, giving further substance to principles contained in the Federal Regulatory Flexibility Act of 1980. Similar acts exist in other states, example: Illinois.
Pennsylvania's new Small Business Regulatory Reform Act, amends the State Regulatory Review Act to require state agencies to consider the impact of any proposed regulations on small businesses. Similar protection exists in the European Union under the Small Business Act policy of 2008, to adjust regulation according to the size of companies and avoid the "one-size-fits-all" solution.
The PA Small Business Regulatory Reform Act requires state agencies to identify the types of small businesses that would be impacted as well as the potential administrative costs of proposed regulations. If a proposed regulation is determined to have an adverse impact on small businesses, the Independent Regulatory Review Commission must provide a less intrusive or costly alternative that still achieves the intended statutory purpose. The objective is to require agencies to seek input from small business to better balance public welfare with economic growth. Additional competitiveness is to be obtained by reducing unnecessary regulatory hurdles and costly mandates. For good background note, see Small Business Council.
Meanwhile in the UK, the importance of cutting red tape specifically for SMEs is confirmed by new research published today by smallbusiness.co.uk an online advice site.

Report on agencies (France)

Though not dealing directly with regulation, the 2012 report of the French Conseil d'Etat on Agencies is well worth perusing for its conceptual and operational contribution to the understanding of the workings of a modern state, and how to improve public governance. The high administrative jurisdiction, which is an adviser to Government as a well as the supreme court for administrative litigation, sets out to define a doctrine for the use of agencies, which did not previously exist in the French legal order or literature. It takes stock of the situation, where a variety of legal statuses cover the many forms in which public authorities seek to introduce some managerial flexibility otherwise lacking in traditional administrations. It shows that contrary to expectations, the French administrative scenery is quite as pragmatic, when it comes to making the best use fof public resources, as other countries.
Seeking to define the scope of the use of agencies, the report finds that they are best identified by a degree of autonomy (not independence) and "structuring responsibility" for public policies. They must be distinguished from other resembling types of authorities such as "independent (economic) regulators" (called in French independent administrative authorities) and "operators" which is a budgetary concept where the entity lacks the structuring responsibility. There are in France some 103 agencies, employing 8% of public officials.
The report concludes with 25 recommendations for making the best use of this form of public service, most of which contain lessons certainly useful in many other countries.

11 September 2012

EP updates stance on smart regulation

In July, the Commission on Legal Affairs of the European Parliament issued its "Report on the EC's 18th report on Better Legislation - Application of the principles of subsidiarity and proportionality (2010)", including a motion that updates the EP's position on Better Regulation. According to the explanatory memorandum, which is a particularly interesting document to trace the evolution of Smart Regulation:
"Parliament, together with the other European institutions and the Member States, must now do its part to ensure that the momentum gained is upheld and that activities are stepped up in all relevant areas. There is in particular a dire need for the Interinstitutional Agreement on better law-making from 2003 to be updated to the current legislative environment created by the Lisbon Treaty, (our emphasis) for instance concerning correlation tables, the practical modalities for legislative procedures and the demarcation between delegated and implementing acts. Action is also needed in the areas of subsidiarity checks by national parliaments and when it comes to impact assessments conducted by the Parliament and the Council. Lastly, adequate follow-up of the functioning of adopted legislation needs to be made, not least in order to gain feed-back to be used for the amendment of legislation identified as possible to ameliorate, but also in order to combat the practice of ‘gold-plating’, i.e. the introduction of additional national requirements not included in a directive, thus creating additional unnecessary burdens for citizens and business. The Commission is foreseen to publish a report on the progress of the smart regulation agenda in the latter part of 2012. Parliament should make sure to remain vigilant in identifying shortcomings and suggesting improvements in this area." All these points are fully developped in the motion (tip from M. Hainque).