Advise the Advisor (US)

As has been practiced in many other countries, the US government has just launched a new website to collect feedback from business about priorities for cutting red tape.
"Advise the Advisor" (Cass Sunstein) asks business owners across the country to say which regulations are "standing in (their) way." Which rules should be eliminated, streamlined, or made more effective? How can reporting and paperwork burdens be reduced ? What are the best ways to cut regulatory costs? This consultation is in keeping with the January 2011 Presidential order directing executive agencies to undertake a review of regulations in order to figure out what is working and what is not, and where appropriate, to streamline or eliminate ineffective, overly burdensome, and outdated rules. Over two dozen agencies responded with regulatory reform plans, listing more than 800 initiatives, and the new consultation campaign hopes to usher in another batch of measures.

USAID supports Iraq RR

A Bahrein news agency reported three days ago that Iraq has signed a Memorandum of Understanding (MOU) with the United States Agency for International Development (USAID), outlining American support for Iraqi efforts to reduce regulatory obstacles in Iraq's private sector.
The MOU is in line with the Strategic Framework Agreement signed between the two countries and contributed to the Iraq Solution for Regulatory and Administrative Reform (ISRAR) project. ISRAR will review and eliminate unnecessary regulations that hinder business and private investment. ISRAR working groups, drawn from both the Government of Iraq and the private sector, will produce reform recommendations to make it easier to start a new business, obtain construction permits, and facilitate trade with regional neighbors and the world, according to the statement. The statement added that these recommendations will help significantly improve the Iraqi private sector, and Iraq's ranking in the World Bank's Doing Business Report, which will assist efforts to expand investment in the economy. It went on saying that implementation of these reforms will send a clear message to the international business community that Iraq is rapidly creating a new economic foundation.
See also last week's post on RR in the Kurdish Region of Iraq.

Update on Irish Better Regulation

An article by Tom Ferris published today in Independent.ie online reviews the situation in Ireland after government decisions related to RIA. It is interesting and useful as it examines the institutional setup against the OECD recommendations (see 2010 review of Ireland), concluding (this is the title) "Better Regulation could start with a lot better organisation". As in many other countries, BR related functions are split between different departments, causing a lack of overview and unity of purpose, and sometimes a patchy implementation of the policy. The article points out three "omissions" in the Irish institutional setup, which can serve as a check-list for other national contexts:

• "no mention as to who is taking overall responsibility for the delivery of the commitments in the Programme for Government on the use of RIAs in the development of policy and legislation"
• "the lack of reference to who will take responsibility to ensure that RIAs are of good quality. They should not just be a box-ticking exercise. A central department should have formal authority to send poor RIAs back to the original departments."
• "no reference to setting-up a new central RIA website to replace the one previously provided by the Department of the Taoiseach."

See also archive of the BR unit in Taoiseach, as www.betterregulation.ie has been disbanded.

South Africa struggles with regulatory reform

An interesting editorial from Zambia casts a critical look on RR in neighbouring South Africa. It reports that regulation and red tape would be more offensive in SA than in the other Brics (Brazil, Russia, India China and SA). "Excessive moves by the government to control rather than facilitate business are increasingly hampering innovation, hiring and margins. The latest business pulse readings indicate stresses are rising due to the numerous constraints companies face. At a time when the world is looking to Africa to stave off global recession, SA stands a real chance of missing out on the boom as it loses its status as a gateway to the continent. The long delays in getting things done, especially in beefing up infrastructure, is proving to be most daunting for business owners and CEOs. But more subtle areas of delivery are also affecting sentiment — such as so many people remaining poor and unskilled despite business profits and employee salaries helping to pay for grants, and billions being ploughed into education. The results are simply not coming through; business is now sending a clear message that the government must get its act together, stamp out rampant corruption and work at improving equality. The consequences of failure are a limp-along economy and more street beggars. " (for more, visit Business Day.)

ASEAN holds first RR symposium

Today ASEAN convened its first Regulatory Reform Symposium (ASEAN ARRS) as part of ongoing efforts towards regional economic integration by 2015. The invitation by the Philippine to host the ARRS was accepted during the 20th High Level Task Force on ASEAN Economic Integration meeting in Jakarta last year. The symposium aims to identify key challenges in policy formulation and address the gaps to achieve a more comprehensive regulatory reform program for specific sectors and industries.
Both supply chain connectivity and logistics are heavily affected by regulations that cut across the integration pillars. The region works to set up a single market and production base, a competitive economic region, equitable economic development, and integration into the global economy by 2015.

New anti-regulation measures (UK)

Julian Farrel from the Department of Business Innovation and Skills (BIS) informs us of the useful online publication of a new statement concerning the official regulatory policy of the British government: the 4th Statement of new regulation seeks to show "that the government's One-in, One-out rule continues to result in a reduction in the net cost to business and civil society organisations."
For a summary of the policy and of the miscelaneous new measures, see the press release of 17 July.

Homeless asked for permanent address (Malaysia)

To give it an occasional lighter touch, this blog reports some of the worst cases of red tape found on the web. This one is from Kuala Lumpur where volunteers working for several non-governmental organisations (NGOs) and corporate companies to help the homeless in the city, say the current government bureaucracy in the healthcare, registration department and other agencies require a permanent address for the recipient before aid can be granted, even if he/she is homeless. See more on the Star online article.

KRG judges practice smart regulation

Funded by the World Bank and supported technically by INSTEA and the OECD-MENA Governance Programme, a workshop was organised earlier this week for a group of judges and assistants belonging to the Shura Council (Consultative Assembly) of the Kurdish Region of Iraq. The purpose of the session was to review legislative drafting techniques to accommodate the new requirements placed on the judiciary by regulatory reform objectives. Course members actively discussed the relevance of international examples of best practice and sought to draw lessons for their own work. Your blogger, who participated in the event, was impressed by the expert legal tradition and the determination of the judges to support the rule of law and democratic principles in their work. This workshop also gave a practical example of the issue addressed in the previous post (the relation between sound legislative drafting and better regulation).
For more, see similar projects of the WB in KRG, and examples of legislation in the KRG. Also check the regulatory quality resources produced by the OECD-MENA programme (drafting manual, guide to consultation, etc.)

Good legal drafting for Smart Regulation

When thinking about building a Smart Regulation capacity, we do not always think about the potential of more expert legislative drafting, which is concerned primarily with the formal quality (clarity, consistency, formatting, references, etc.) as we are focusing mostly on the impacts of the draft and other issues such as its implementation or evaluation. We take it for granted that the lawyers will know how to implement policy with the appropriate legal instruments, once the right decisions will have been taken and the impacts measured.
But a comprehensive approach to the quality of legislation must not neglect this vital phase of actually drafting the texts, with the end-user in mind.
Your blogger was asked to examine the contribution of legistics to better regulation for the first number of the International Journal of Legislative Drafting and Law Reform. The result is an article which examines how the issue has been tackled in France, and assess the results from a Better Regulation point of view. Access to the article is by subscription on the publication's website. Alternatively, interested experts can acces a short version "Legistics and the quality of legislation in France." In summary, the article takes the view that France, like other countries belonging the the "continental law" sphere, needs to accommodate updated standards of quality addressing a wider range of societal demands, chiefly making the body of law easier to access, to understand and to apply, and supporting higher economic performance. This has happened to a certain extent in France, and the article seeks to appraise the French model and its results against international best practice as expressed by the "Better Regulation" principles promoted by OECD. It concludes that much progress has been made but further improvements are necessary if the system is to guarantee economic accountability on a par with legal security, and remain an "attractive" model.
You may also want to note that the International Journal will be holding its first annual conference in London on 4-5 September.

Enterprise and Regulatory Reform Bill (UK)

Experts wishing to track current developments in smart regulation should regularly visit the special website opened by the Business Innovation and Skills (BIS) department and entirely dedicated to the Enterprise and Regulatory Reform Bill under discussion in Parliament.
The site follows the passage of the Bill through both Houses of Parliament. Published on the 23 May 2012 in the House of Commons, (text available on the Parliament website) the Bill aims to cut the costs of doing business in Britain, boosting consumer and business confidence and helping the private sector create jobs. It will:
- Improve the employment tribunal system.
- Create a new Competition and Markets Authority.
- Set the purpose of the UK Green Investment Bank.
- Give shareholder's binding votes on directors' pay.
- Simplify business red tape.
There is an active discussion in the media every time a significant amendment is announced, like the recent measures to give stakeholders a better control on company directors' remunerations.

What would Republican RR look like?

Considering the recent rich discussion in Washington about regulatory reform, what would be the prospects if Mitt Romney were to be elected? This is a very relevant issue for smart regulators as in many ways, the US has shown the way in the search for efficient regulation. A recent post on RegBlog, an often quoted source of information about developments States' side, gives a full picture of what could be expected, making allowances for "campaign bluster". Does Mitt Romney's regulatory plan, which includes a strong dosis of deregulation, truly present a serious danger to economic health and public welfare, as you could imagine from recent declarations of some of his supporters? Or does it instead offer the US a chance to renew with growth and jobs ? As you would expect, the five-part dossier brings out a nuanced conclusion.

Why do bureaucracies fail?

An interesting post on Regblog reminding us of an excellent book that analyses the limits and failings of bureaucracy. Such insights are useful for regulators, who always depend on administrative agencies to collect information to support policies.
Senior American academic Donald F. Kettl reminds us of James Q. Wilson's 1989 classic, Bureaucracy which explores the reasons behind bureaucratic failures. "Wilson explains that different administrators, at different levels of the bureaucracy, have different perspectives, roles, and incentives. Too often, these roles fail to mesh, problems fall through the cracks—and, as a result, programs can fail, sometimes catastrophically.
He identifies three different levels of bureaucrats. "Operators" work the front lines, performing the most basic of an agency's work. They define the agency's culture by what they do, how they do it, and how they pass along the accepted modes of business. "Managers" are the critical shock absorbers between the front lines of operation and the often-turbulent political environment. Finally, "executives" guard the organization's turf, seek to preserve its autonomy, build political support, and struggle to secure the resources needed to do the agency's work."

Kenyan regions more competitive

At the end of June, the World Bank issued its second report on comparative ease of doing business at the infranational level in Kenya.
It shows, using the Doing Business method, that over the past two years, all 13 cities have improved business registration processes while 2 cities expedited the approval of construction permits. Joint reform efforts by the national and local governments have reduced the average time to start a business by 22 days and the average cost by 5%. Mombasa is the city that saw most improvements across 3 out of the 4 areas measured. Due to a broad based business reform program, starting a business is more than one month faster today than in 2009; while the opening of a specialized court in September 2011 paved the way for more efficient commercial dispute resolution. This report, which measures the impact of regulatory reforms, offers encouragement to Kenyan reformers.

Spain scores in AB reduction

Network friend Ignacio Gafo, leader of the Spanish AB project, informs us of impressive recent results, summarized in an official Report of CEOE.
Efforts have focused on the Integrated Environmental Permits (IPCC Directive) which is possibly the most complex procedure existing in Spain and in which the four levels of Government (EU, national, regional, local), are involved. The Confederation of Employers' proposals, that have been very favourably received by the Spanish Government, are expected to yield not only a significant reduction of administrative burdens to companies, but also promote a "philosophy" (Convergencia Voluntaria de Legislaciones y Procedimientos Autonómicos) which make a bid to reduce the legislative and practical fragmentation of the Spanish interior market. Thank you Ignacio.
 

Indian PM outlines plan for inclusive growth

Under the title « Government keen to cut red tape », a leading Indian newspaper partnered with the Wall Street Journal reports that PM Singh outlined his policy to preserve growth, avoid that “the fruits of an open economy (will) be increasingly captured by fewer people, and attract FDI. The paper comments: “The government has, in recent months, come under attack for keeping key policy reforms relating to foreign investment in organized retail and insurance in limbo, and failing to make headway in implementing changes in taxation. Rating agencies Standard and Poor’s and Fitch have downgraded the outlook on India’s sovereign rating, citing slowing economic growth, high deficits and policy inaction.”

The PM now wants to renew the anti-red tape drive:  “We will…work towards improving the response time of government to business proposals, cut down infructuous procedures, and make India a more business-friendly place,” he said. “We want the world to know that India treats everyone fairly and reasonably, and there will be no arbitrariness in tax matters.”

It will however take more than political declarations to sort out the Indian bureaucracy, as pointed out by a Forbes India article today.

Commission consults on smart regulation

Smart regulators, sort out your ideas and get ready to make proposals ! The European Commission is calling for contributions to take take stock of two years of SR. See the new consultation, opened 27 June, and closing 29 September. Thank you Lorenzo for pointing it out to us.

“In its 2010 Communication on "Smart Regulation in the EU", the Commission set out a strategy to improve the way it designs, enforces, evaluates and revises European policies and regulations to ensure they benefit citizens and businesses.

Nearly two years later, the Commission is taking stock of the progress made and drawing lessons from its experience. This stakeholder consultation aims to collect your views and proposals to inform a Commission Communication reporting on Smart Regulation implementation.

The consultation focuses on how:

• To improve the quality and relevance of proposed and existing EU legislation
• To ensure the effective implementation of EU legislation
• To ensure the views of those affected by EU legislation better inform policy
• The European institutions and Member States can best collaborate to achieve the goals of Smart Regulation. “

Smart Regulation for growth and jobs (EU)

The last European Council meeting under Danish presidency (28-29 June) has yielded another set of Conclusions interesting for smart regulation experts. Member States adopted the "Compact for Growth and Jobs", encompassing action to be taken by the Member States and the European Union with the aim of relaunching growth, productivity, investment and employment and endorsed the country-specific recommendations to guide Member States' policies and budgets. Among the measures to be taken at MS level, there is mention of "modernising public administration, in particular by tackling delays in the judicial system, reducing administrative burdens and developing e-government services.' Among the European Policies for growth and employment, there is new wording for "Deepening the Internal Market" and smart regulation: "Further efforts are needed to reduce the overall regulatory burden at EU and national level. The Commission will present a communication on further steps in "smart regulation", including measures to support micro-enterprises, by the end of 2012."

New simplification measures (EU)

According to a Council press release dated 26 June, new simplified rules for access to EU funds have been agreed by the co-legislators. "As an example of simplification, beneficiaries of EU funds will no longer be obliged to open a separate bank account to receive an upfront payment at the start of a project and to return to the Commission any interest yielded by this money while it stays on this account. The regime of grants will be shifted from a real-cost based management (inputs) towards a performance-based scheme (outputs). This move is expected to simplify significantly the procedural and documentary requirements for the benefit of beneficiaries. The main objectives of the revision of the financial regulation are to cut red tape, increase the leverage effect of limited EU funds and assure more accountability for the EU taxpayer."
Also noteworthy, the Commission published today a legislative package to improve consumer protection in financial services, raising standards and removing loopholes. The preparatory work for this package benefited from input of behavioural economics data.

Simplifying pub management (UK)

This blog has already reported on the British Governement consultation of stakeholders on which administrative procedures needed to be simplified, with an emphasis on practical difficulties experienced by companies "Focus on Enforcement". The originality is to open a time limited consultation on a very specific issue, such as Chemicals, Food Law, and, as from today for six weeks Pubs.
"The Government is encouraging anyone involved in running a pub, particularly a community pub, to feed in their experiences, good and bad, of dealing with local authorities and other regulators as part of the Focus on Enforcement campaign. Experiences with regulators might include dealing with paperwork, inspections or advice from regulators you come into contact with. The campaign allows comments to be posted anonymously." This seems to be a highly focused and efficient way of getting feedback from the business community. The public may even suggest future areas for investigation of red tape.
See the press release for details.

Guide to consultation (OECD)

The OECD has just published online a "Practitioners Guide on public consultation in the rule-making process" is part of the first phase of the MENA-OECD Initiative to Support the Palestinian Authority (PA). Drafted by Miriam Allam and Hania Bouacid from OECD, the Guide assesses the regulatory consultation process in the Palestinian Authority, and presents good practices examples from OECD countries and practical guidelines. A very useful guide for all experts engaged in delivering effective consultation in support of smart regulation.
Several other technical resources have also been uploaded, and can be found on the OECD MENA website.

Beyond Compliance Costs (US)

In order to advance research on regulation’s broader economic impacts, the Penn Program on Regulation (PPR) recently hosted a workshop in Washington, D.C., on “Beyond Compliance Costs: The Other Economic Impacts of Regulation.” Since 1993, US government agencies have been required by executive order to analyze the broader effects of regulation on “productivity, employment, and competitiveness.” Yet despite this obligation, most of the economic analyses that agencies conduct on their regulations have focused just on the direct benefits and costs of regulatory compliance. Although these immediate impacts are obviously of great importance, the recent economic downturn has made the broader impacts of regulation increasingly salient.
The workshop opened with a discussion of existing research on the impacts of regulation on jobs. Several commentators noted that even though there are negative impacts of regulation on specific businesses, the overall net effects on jobs are rather small, at least according to existing research.
Others noted the difficulty of predicting the impact of any specific regulation on overall employment, as many different factors affect employment. It can also be hard to predict how a regulation that may take effect a year or two into the future will impact the overall economy at that time.
Although it was generally recognized that agencies could do more in their cost-benefit analyses to try to forecast the employment impacts of new regulations, some participants suggested that employment impacts may already be taken into account too much in the regulatory process. The political pressures on members of Congress and, by extension, regulatory agencies may amplify attention to employement impacts even when the actual effects are negligble or nonexistent.
The workshop concluded with a discussion of possible policy recommendations that regulators should follow. Some workshop participants suggested establishing new institutions that could produce credible, independent regulatory impact analyses, akin to the role played by the Congressional Budget Office in the budgetary process. Such an external check on the analysis of proposed regulations might counteract some of the political pressures that skew decisionmakers’ priorities. On the other hand, one participant cautioned that greater external oversight of agencies might make them more cautious and less productive.
For more, see the conference leaflet.