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).

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.)

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.

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.

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.

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:

• "One-for-One" Rule
• Small business lens

- Making it easier to do business with regulators:

• Interpretation policies

- Improving service and predictability:

• Service standards
• Forward planning
• Annual Scorecard Report

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.)

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.