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.
Background on regulatory quality, see "Archive" tab. To be regularly informed or share your news, join the Smart Regulation Group on LinkedIn: 1,300 members, or register as follower.

25 May 2012

OECD ministers bolster support to MENA transition

The ministerial meeting of OECD ended yesterday with a declaration summarizing orientations for the Organisation's work in support of Better Policies for Better Lives. One of the chapters of their declaration related to MENA.
Ministers welcomed the OECD’s support to MENA governments in their reform efforts, as well as to donors to refocus their assistance programmes to meet the region’s key policy priorities... Ministers also underlined the importance of adopting a long-term perspective as well as a demand-driven, differentiated and country-specific approach, together with a reinforced regional approach. They welcomed the strong role played by the OECD in the Deauville partnership platform. (...) Ministers further encouraged the OECD to offer structural assessments, monitoring tools and thematic support to offer guidance and ways for improving governance and integrity, investment, social justice, economic performance and job creation, entrepreneurship, gender equality, education and territorial development. They also welcomed efforts by MENA countries to adopt OECD instruments (...). They also recognised Member countries’ contributions to support the OECD MENA programmes.
In parallel, Tunisia and Morocco signed up to a series of international instruments in areas ranging from business integrity to international investment and green growth. Adherence to these instruments is an expression of a long-standing co-operation between countries in North Africa and the OECD.

Priorities for public administration reform (France)

The appointment of a new government is a choice moment to highlight priorities or announce implicitly future reforms. The new government resulting from the election of prsident François Hollande contains a few useful indications as intentions for the future of public service reform. Commentators note that the "reform of the state" is to be joined up with the civil service department (instead of being part of the ministry of finance), and the new drive of the ensemble is to be devoted to decentralisation, i.e. empowerment of local authorities. The end of the apparent link with budget issues is lamented by some, applauded by others, as the new president has promised to abolish the policy of only replacing one official for every two reaching retirement age. The new minister has explained some of the themes for the consultation on possible reforms: distribution of competences between the levels of local government, how to encourage local merging of communes, reviewing the election mode of local councillors.

21 May 2012

Smart Regulation in 1200 words

ERRADA, the Egyptian regulatory reform activity, has already been quoted here as RR communication best practice. In particular they publish a monthly newsletter which gives updates about all current RR projects, adding some background on Better Regulation in general, often from abroad. The April newsletter issued last week carries, under the title "Smart Regulation: a Global Challenge for Policy-makers", a brief summary of what is Smart Regulation, starting with definitions and a short account of Canadian and EU varieties. It then lists the most useful best practices and expert tools developped in regulatory policies around the world, with some 40 links to the most interesting online resources and examples. For the text of the article, drafted by your blogger, click on the links below:

Smart Regulation in 1200 words
التشريعات الذكية في 1200 كلمة
La Réglementation Intelligente en 1200 mots 

In the March number, there is a short article by D. Trnka on "Why Is Administrative Simplification So Complicated?"

"Nudging:" a new regulatory technique (A. Alemanno)

Associate Professor of law at HEC Paris and top regulatory expert Alberto Alemanno explains in his op-ed published last week in European Voice why the European Commission should include behavioural insights in the design of regulatory proposals (print copy). (Excerpts): "In recent years, findings in behavioural sciences have highlighted the complex cognitive framework in which people make decisions. In particular, behavioural economics, by refuting the neoclassical assumption of human full rationality, has revealed a set of psychological biases capable of explaining why too often people make choices that seem to go against their best interests... These findings have important implications not only for the well-being of European citizens but also for regulatory policy... Under both US President Barack Obama and UK Prime Minister David Cameron, policymakers have recently been encouraged to draw on behavioural and social-science insights in the design or implementation of new regulations, an approach commonly called ‘nudge'. Inspired by ‘libertarian paternalism', it enables the creation of public policies that steer citizens towards making positive decisions as individuals and for society while preserving individual choice... Besides a few isolated initiatives displaying some behavioural consideration (eg, revision of the tobacco products directive, consumer information regulation, behavioural advertising), the EU has not yet shown a commitment to integrating behavioural research into its policymaking. Given the potential of this regulatory approach to produce effective, low-cost and choice-preserving policies, this seems inadequate, especially given the EU's commitment to smart regulation, a commitment stated in its Europe 2020 Strategy."
Other sources on nudging include Cass Sunstein's book written with R. Thaler "Nudge." For more news on the concept and technique, see the Nudge blog.

Regulatory Innovation Award goes to Cass Sunstein

Cass Sunstein, Administrator of the US Office of Information and Regulatory Affairs, has been named this year's recipient of the Burton Foundation's annual Regulatory Innovation Award. Morrison & Foerster established this award in 2008 through the Burton Foundation to honor an academic or non-elected public official whose innovative ideas have made a significant contribution to the discourse on regulatory reform. The independent panel of academics, practitioners and financial journalists named Mr. Sunstein for his commitment to understanding the nature of regulation and the role of incentives in formulating successful regulations. He has been overseing the review of new regulation offered by executive branch agencies to ensure that benefits outweigh the costs. With Richard Thaler, Mr. Sunstein is the author of Nudge, an influential book discussing the relationship between human behavior, decision making, and regulation (click for more)
Last year's award went to Mr. Eddy Wymeersch, until recently the Chairman of the Committee of European Securities Regulators, "well known for his successful efforts toward the establishment of the first pan-European regulatory authority (ESMA). He has been an articulate and unrelenting advocate of greater international cooperation to deal with the challenges created by the financial crisis, including the creation of the Financial Stability Board by the G20. He has also served as Chairman of the Banking Finance and Insurance Commission, which is Belgium’s integrated financial regulator, and is currently Chairman of the Public Interest Oversight Board, which is in charge of overseeing the auditing standards boards."

20 May 2012

Academic questions Irish BR

Colin Scott, director of the Centre for Regulation and Governance, University College Dublin (UCD), keeps us informed about news of the BR scene in Ireland. We reported his analysis of the Irish 2012 Action Plan for Jobs which re-commits the government elected in 2011 to a programme of coordinated regulatory reform. Now, following a Policy Workshop in March, Colin examines, in an Irish Times article last Friday, recent developments that again question the Irish government approach, under the title « Failure to Regulate Regulation in Ireland Could Prove Costly." Note the paradoxical expression « regulate regulation. » Here is an extract :
« … the overall capacity for review of regulatory policy, consideration of alternatives, and learning from others risks being lost. A number of recent Bills with clear regulatory impact, such as the Water Services Amendment Bill and Legal Services Regulation Bill, have been presented to the Oireachtas without RIAs, and without due consideration of less costly alternatives to public regulation. The capacity both for training public servants and for co-ordinating learning about and implementation of best practice regulatory strategies across government and with partners within the EU and the OECD is imperilled, and this risks increasing costs and reducing effectiveness of regulation. »
A more in-depth scrutiny is given by a report « Whither Better Regulation? », just published on the UCD site. See also a 2010 history of the issue, co-authored with Ciara Brown, is available from the Policy Workshop page (tip from E.D.)

Red Tape Nightmare (Uzbekistan)

The web reports selectively on governments’ bright ideas to carry out their policies, often by keeping closer track of their citizens. Those interested can subscribe to a Google News alert on « red tape » which yields more than 10 items a day.
Among the recent stories, this one found on Eurasianet.org, seems to deserve a prize. « The city of Tashkent is making it easier for police to sort residents into “insiders” and “outsiders” by forcing everyone to get a new stamp in their internal passports. It’s unclear what’s behind the new measure, but in one of the most corrupt places on earth the extra red tape could provide police another opportunity to stick their hands in residents’ pockets, observers fear. »
It will be interesting to see how this new measures affects the country’s ranking in the Doing Business index, currently at 166th out of 183 (and absolutely last 183/183 for "trading across borders").

11 May 2012

Queen outlines new regulatory reform

On 9 may, the British Monarch outlined the Government’s priorities for the coming Parliamentary year in the official state opening of Parliament. Projected legislation includes among many other changes such as the House of Lords reform, an Enterprise and Regulatory Reform Bill which ams to :
  • Overhaul the employment tribunal system, and transform the dispute resolution landscape.
  • Improve the effectiveness and efficiency of competition enforcement and the competitiveness of markets, by strengthening the regime and improving the speed and predictability for business.
  • Set the purpose of the UK Green Investment Bank and ensure its independence.
  • Strengthen the framework for setting directors’ pay by introducing binding votes.
  • Extend the Primary Authority scheme, reduce inspection burdens on business and strengthen the legal framework for sunset clauses on regulation.
  • Repeal unnecessary legislation, cutting the burden on business and citizens.
A BBC news item reflects political comments : The prime minister told MPs: "Let me say exactly what this Queen's Speech is about. It is about a government taking the tough, long-term decisions to restore our country to strength. "Dealing with the deficit, rebalancing the economy and building a society that rewards people who work hard and do the right thing." Labour leader Ed Miliband said his party would support measures such as parental leave and a Green Investment Bank - but the Queen's Speech contained nothing for the young unemployed, working families and "millions of people who don't think the government is on their side".

New Executive Order on reducing regulatory burdens (US)

Yesterday, the US President has signed a new Executive Order on “Identifying and Reducing Regulatory Burdens” making it a continuing obligation of government to scrutinize rules on the books to see if they really make sense. The Order directs agencies to seek public comments on rules in need of review. To promote priority-setting, the Order directs agencies to emphasize reforms that produce significant quantifiable savings. To promote accountability, the Order requires agencies to provide the public with regular reports on their past efforts and their future plans -- with details and deadlines. These new instructions build on, and institutionalize, the President’s Executive Order of January 18, 2011, which first called for retrospective review of rules on the books (the regulatory “lookback”). In parallel, the Council of Economic Advisers is issuing a report on the “lookback.” The report outlines the progress made to date. It notes that agencies have identified over 500 reforms and that a small fraction of them, already finalized or formally proposed to the public, will be saving more than $10 billion over the next five years. The report emphasizes that we need continued analysis and public participation to identify rules that should be streamlined, improved, or eliminated. See also Cass Sunstein’s analysis of the package (tip from Daniel T.)

Independence of regulators increases quality of regulation (CERRE)

From a discussion posted on the Smart Regulation LinkedIn Group (same editor as this blog) : the Centre on Regulation in Europe (CERRE) has published a new study demonstrating the link between greater independence and accountability of national regulatory authorities (NRAs) and the perceived quality of their regulation. The study has been carried out by Prof. Pierre Larouche, former CERRE Joint Academic Director and professor at Tilburg University and the College of Europe, Dr Chris Hanretty, researcher and lecturer in Politics at the University of East Anglia, and Prof. Andreas Reindl, professor at Leuphana University.
The CERRE site contains several other publications of great interest to smart regulators (examples : Enforcement and judicial review of decisions of NRAs ; Quantitative techniques for regulatory benchmarking).
The study is well timed, as there is renewed interest, inter alia in OECD, in assessing the relevance and performance of economic regulators, much of the ground work having already been published some years ago (example : « designing independent and accountable regulatory authorities for high quality regulation » 2005)
Among the comments, a suggestion for reading on regulatory reform : Regulation and Its Reform (1984) the best overview of the topic since Alfred Kahn's Economics of Regulation (197O).

10 May 2012

Update on MENA and the Deauville Partnership (G8)

Ahead of the Toronto G8 Summit on 19-20 May, what are the prospect for governance and investment in the MENA region? The G8 research group keeps track of publicly available information on the preparations of the policy summit. Concerning the Deauville Partnership, which aims to lend practical support for the Arab states engaged in democratic transition, the research group memo summarizes recent declarations during the year of the French presidency of the initiative (page 3-4) noting the wish experessed by France that Morocco will join the Partnership.
The US is chairing during the year 2012 and has issued a policy overview following the Paris meeting in April (see State media note) listing achievements and projects related to finance and trade, investment and integration. For more, see OECD pages for the announcement of the Paris meeting, the agenda and some of the presentations.

How to make best use of PPPs (OECD)

The OECD Council has approved the OECD Recommendation on Principles for Public Governance of Public-Private Partnerships (PPPs). The Principles should be helpful to policymakers as they explore the use of PPPs to make savings and deliver effective public services.
Public-Private Partnerships (PPPs) are long term agreements between the government and a private partner whereby the private partner delivers and funds public services using a capital asset, sharing the associated risks. PPPs may deliver public services both with regards to infrastructure assets (such as bridges, roads) and social assets (such as hospitals, utilities, prisons). By combining private sector innovation and financing, and sharing the risks in innovative ways, PPPs can provide much needed savings for the public sector and a fair deal for the private sector. This presents policy makers with particular challenges that should be met with prudent institutional answers, considering the economic impact of decisions: PPPs in OECD countries currently represent about 0.8 trillion USD, and there are projects in the pipeline of about equal value. Experiences from our Member countries show that it can be difficult to get value for money out of PPPs if government agencies are not equipped to manage them effectively. Moreover, PPPs can obscure real spending and make government actions un-transparent, using off-budget financing. This means PPPs are potentially risky for fiscal sustainability, possibly leading to credit rating down-grades as has happened in some OECD countries.
The Principles will help ensure that new PPP projects add value, and prevent ill-designed projects from going forward. For instance, they offer concrete guidance on when to use a PPP – not for projects using rapidly changing technology such as IT, but possibly for those using well-known, generic technology such as building roads. They focus on how to align the different parts of the public sector to ensure success: institutional design, regulation, competition, budgetary transparency, fiscal policy and integrity at all levels of government. The Principles also stress that just as much attention should be devoted to the PPP after the deal is done – i.e. during the operational stage, which can often be 20-30 years.

08 May 2012

Announcement: Stakeholder.eu 2nd edition

Smart regulation experts wishing to keep track of colleagues in Brussels, as well as correspondents in the stakeholder community will be interested in the publication of the second edition of Stakeholder.eu – The Directory for Brussels 2012, by former MEP and networking specialist Frank Schwalba-Hoth.
As indicated by the publishers, « it is estimated that some 15% of the Brussels stakeholders move from year to year. Keeping pace with these shifts is an everyday challenge. In order to work in Brussels, you do not need to know everyone – but you do need to know the stakeholders in your area of interest and activity. » A must-have for all those dealing professionally with the EU.

London attacks EU 'red tape factories'

In an article published today on the Telegraph, the Business Secretary V.Cable, announces measures backed up by the 3rd meeting in April, in Vilnius, of the Like-Minded Group of 15 economic ministers « committed to rolling back excessive regulation emanating from Brussels and to expanding the Single Market. » For a recap of previous meetings of the group, see Enterprise Lithuania article.
« The tide is turning against EU bureaucracy, Britain is no longer a lone voice in the push for deregulation and a flexible labour market. » The ministers’ common purpose is « to close down the red tape factories of Brussels.» The Business Secretary singles out for detailed criticism the Working Time Directive (WTD), which sets a 48-hour limit to the working week. Mr Cable calls it « a heavy-handed, one-size–fits-all approach … adopted, with unintended perverse outcomes. The directive incorporates the idea that is most clearly expressed in the French 35-hour week: that work should be compulsorily restricted and shared out, whether or not it suits the needs of individual workers or firms. »
In in earlier comment, the Lithuanian PM had justified the strengthening of the internal market by the need for the EU to «get ready for intensified competition with China, India, Brazil, and other fast-growing economies»
According to Reuters, a new Enterprise and Regulatory Reform Bill, expected to be unveiled tomorrow, is part of the government's measures «to protect British firms from further EU regulations» and boost the economy, which recently slid into its second recession since the financial crisis.
The group includes the UK, Germany, Sweden, Finland, Poland, Slovenia, Ireland, Romania, Malta, Slovakia, Denmark, Lithuania, Latvia, Estonia, and the Netherlands.

Hungarian PM vows to cut more red tape

According to a news release, the government has to adopt further programmes to promote businesses by reducing bureaucracy, Hungary Prime Minister Viktor Orban told Parliament in response to a question from the floor, citing the reduction of the profit tax of small businesses to 10 percent, the elimination of 10 minor taxes and the extention of the Szechenyi Card credit programme for businesses. In the same speech, Mr Orban ruled out further reducing taxes.

07 May 2012

New French president scraps public policy review

The early days of a new administration can be interesting, by the choice of what dossiers to handle urgently. Public governance experts will examine the proposal already published by the new team in charge in France, following yesterday's victory of François Hollande (supported by the socialist party) to scrap the RGPP, the general review of public policies, a wide-scale review of public spending recently positively assessed by an OECD report (see previous post). The renovation of the public administration will of course be continued, but under the designation of "refoundation and modernisation of public action" (policy). It is interesting to note that this measure is announced among the 12 most urgent steps to be undertaken by new government, i.e. before July. All the media widely report this first batch of urgent reforms (see Google news). For a more economically minded panorama of the debate in France, see Valeurs Actuelles article.

Economist reviews a year of regulatory reform in the US

This week's Economist contains a summary of the Obama Administration's action in RR, under the title "Deleting Regulations" and focusing on the work achieved by Cass Sunstein, the "red tape Czar" and head of OIRA. Mr Sunstein had in particular been commissioned to implement the January 2010 executive order asking agencies to slim down the rule book. Departments have responded with 580 proposals which are being scrutinised. But over the same period, the Obama administration has published many new regulations (194 texts with an economic impact of $100m or more. The article summarizes the cultural and procedural obstacles to deregulation and lists current options:
- one-in, one-out (UK style), an idea supported by Republican candidate Mitt Romney;
- a truly independent scorer for regulatory costs and benefits, (like ACTAL in the Netherlands);
- a board of influential stakeholders (like in Australia and elsewhere) to help break political deadlocks;
- a full-time advocate for regulatory rollback;
- automatic “sunsets” of laws

Food law enforcement under public scrutiny (UK)

On 1 May, the Department of Business, Innovation and Skills (BIS) launched the first review theme for the Government’s Focus on Enforcement campaign (see previous post), which will concern food manufacturing companies. This initiative is important for us experts as it provides a practical illustration that Better Regulation policies must include steps to determine how enforcement of regulation can be improved, reduced or done differently.
To provide facts for the future review of regulation, For the next five weeks, small businesses in food manufacturing are invited to share their experiences of working with national regulators and local authorities. This can include:
  • Dealing with paperwork.
  • Inspections.
  • Advice given by regulators on how to comply.