Measuring Regulatory Policy (OECD, Stockhom, 3-4 June)

This 5th expert workshop in Stockholm is part of the OECD programme on Measuring Regulatory Performance which addresses two very important issues for the Regulatory Policy Committee and the OECD: how can countries measure regulatory performance to diagnose success and failures, improve regulatory policies, programmes and tools, and to communicate progress? How can they demonstrate that an investment in their systems for regulatory policy and management is delivering improvements to their economies and societies? At the 5th workshop, delegates and experts will discuss best practice implementation of the 2012 Recommendation on Regulatory Policy and Governance and how to benchmark progress over time. This is an important step in measuring progress in the implementation of the Recommendation in countries, and the preparation by the OECD of a Regulatory Policy Outlook in 2014.
Background: The 2012 Recommendation provides a list of 12 "principles", which can be used as a checklist of measures that governments can and should take to support the implementation and advancement of systemic regulatory reform to deliver regulations that meet public policy objectives and will have a positive impact on the economy and society.

New economics to support smarter regulation (OECD Forum)

On 28-29 May, the OECD held its Forum, its largest annual open event where economists and policy makers from around the world meet to discuss latest findings and chart the future. The Organisation also uses this high moment to deliver some of its flagship products, such as the Economic Outlook, or the new rankings of its Better Life index, both topics widely reported in the news, or announce diplomatic breakthroughs (for instance the signature at OECD of anti-tax haven instruments). It was expected that an organisation committed to "better policies for better lives" would have a lot to offer smart regulators, whose mission is to ensure more efficient public policies by assisting decision makers with better evidence about economic, social and environmental outcomes. Perhaps the best introduction to the abundant new literature is the 28 May press release "New approach to globalisation and global value chains needed to boost growth and jobs" which provides an entry point to the technical studies on a number of new topics and initiatives. Among the most significant issues is the shift to the "global value chain" approach to international trade, which is based on the fact that "what you do" (the activities of a firm or country) matters more to growth and employment than "what you sell" (the final product). The past decades have witnessed a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc. and this challenges how we look at economic globalisation and in particular the policies that we develop around it, such as trade, investment, competitivesss and other policies. A new book on the topic Interconnected Economies: Benefiting from Global Value Chains was also released during the Forum.
Another report released at the same time, New Sources of Growth: Knowledge-based capital (KBC), finds wide differences between countries in the levels of KBC investment, which includes inter alia IT systems, innovative property and economic competencies (including brand equity, firm-specific human capital, networks and organisational know-how). A finer approach to investment is therefore now necessary.
All these new concepts and data series need to be accommodated by smart regulation tools, such as RIA (a new way of calculating economic impacts), ex-post evaluation (which impact to look for), if regulatory policy to keep up with its mission: quite a challenge but an appealing task, so watch this space !

Applied smart regulation: EC country recommendations

29 May: The European Commission has adopted recommendations to EU Member States designed to move Europe beyond the crisis and strengthen the foundations for growth. The package includes a Communication outlining the main findings of the Commission's country by country analysis, and how this can boost growth and job creation in the EU as a whole, and a series of 24 sets of country-specific recommendations (CSR), one set for every Member State - excluding Greece, Ireland, Portugal and Cyprus.

Threat to our beloved "Doing Business"

According to All Africa, "an independent review panel is expected to soon release its findings regarding the World Bank's "Doing Business" report. Speculation abounds that the panel might recommend outsourcing "Doing Business", removing the "ease of doing business" rankings, or even eliminating the report altogether.
This challenge is not a new one, as powerful World Bank shareholders have been trying to sink the project since its inception in 2002. Now China, the world's second largest economy and an ever more influential force within the Bank, is seeking to water down the report by eliminating, among other things, its country rankings. For more, go to All Africa, the article explains why it would be a great loss if this index of regulatory reform progress was suppressed. (From Emmanouil Schizas, London)
PS: just after posting this, I noticed the leader in The Economist (25 May) under the title: "Stand Up for 'Doing Business'" which gives more detail about the on-going enquiry into the ranking, and strongly supports keeping this indicator. "The president of the World Bank should support one of its most useful products."

NL purple crocodile program

On 25 April 2013, the Dutch Watchdog on administrative burden (ACTAL) launched its agenda for 2013: ‘Towards tangible less regulatory pressure.’ ACTAL has organised a seminar to celebrate the event at Pulchri Studio the Hague. During the seminar a book containing essays on the quest to reduce regulatory red tape and methods to make regulation more effective will be presented to the Dutch Minister of the Interior, Mr. Plasterk. For more, see http://www.actal.nl/english/about-actal/
A ‘purple Crocodile’ has become the Dutch ‘Logo’ for the phenomenon of red tape and regulatory burden. The idea was taken from a TV-add (2010/2011) in which a parent – with child in hand – asks a swimming pool clerk seated behind a glass walled counter whether the purple crocodile (a swimming pool toy) his son lost that day is found. Although the purple crocodile is in plain view, and the child is pointing at it feverishly, the clerk refuses to take a look behind his back and tells the parent in an icy voice to fill out and file a lost and found form…. (from http://www.ial-online.org/)

Pacific Alliance (trade block) rapidly expanding

Regional economic and trade integration can be a long and arduous path, but four countries of Central and South America have been progressing rapidly, as evidenced by the 7th Summit of the Alianza del Pacifico in Cali (Colombia), which bringue together Mexico, Colombia, Peru and Chile (210 million inhabitants). A total of nine heads of state and government attended, as Canada, Costa Rica, Spain, Guatemala and Panama joined the members, with observer status, while Australia, New Zealand and Japan attended at a ministerial level.

Benefits of regulatory proposals: German NKR report

The Normenkontrollrat (independent regulatory oversight body) has just published a study on international practices of quantifying the benefits of regulatory proposals in RIAs, on the basis of methodologies in Australia, the United Kingdom, the USA and the European Commission. From page 63; key findings and conclusions make some very useful points:
- there currently isn't a standalone method for measuring benefits;
- central BR units are useful in operating standardisation and quality assurance of impact assessment;
- "willingness-to-pay" is a key factor of quantification;
- assessing the initial impact of a regulatory proposal often requires a case-specific methodological approach because issues pose complex, multi-causal problems;
- results of the process often fall short of expectations; economic impact are more frequently well measured than complex social issues;
- "there is only patchy and anecdotal evidence that RIAs have a positive impact on the policy making process."

One-stop-shop and business package (Spain)

On 24 May, the Spanish vice president of the government (vice-PM) announced a comprehensive package of measures to help boost business activity, including company law reforms, funding, tax breaks, export facilities and cutting red tape.
To make it easier de start a business, the vice president announced the centralisation of all the paperwork to reduce the time it takes to start a business to 24-48 hours. A project called Launch your business in 3 steps purports to tap the synergy between administrations, new technologies and new rules concerning affidavits in lieu of permits. A one-stop-shop will enable entrepreneurs to make the three basic declarations simultaneously on a single web platform developed together by central administration, the autonomous communities and local government, represented by the Spanish Federation of Municipalities and Provinces.

New regulatory czar nominated in Washington

We are always keen to hear about examples of supervisory or oversight authorities entrusted with the mission of curbing over-activity of regulators, or chasing bad regulation. The US, with its "regulatory czar", offers a good model, but the seat of this high function is vacant since last August. A successor may be taking over, as President Obama has some weeks ago nominated economist Howard Shelanski to serve as administrator of the Office of Information and Regulatory Affairs (OIRA). If confirmed by the Senate, Mr Shelanski would succeed Cass Sunstein. See also other posts in "US/CND category."
Regwatch comments: "With Congress mired in gridlock on many fronts, the Obama administration has increasingly sought to accomplish its policy goals through regulatory action. The shift has added clout to the OIRA administrator role and outside groups from across the political spectrum have awaited Obama’s selection with significant interest. There are currently more than 100 federal rules, ranging from air quality protections to proposed worker protections, awaiting review at OIRA, which is housed in the White House Office of Management and Budget."
Also on the US blogsphere: under the title "Draft Bill Would Limit EPA Rulemaking Power," Regblog discusses draft legislation examined by a House subcommittee, to require the Environment Protection Agency to submit a report to Congress whenever one of its proposed regulations related to energy would cost more than $1 billion. The report would include the estimated direct and indirect costs of the proposed rule, its potential effect on energy prices, and any likely impact on employment. The regulatory reform zeal of Congress shows no sign of abating.

French gvt reduces the number of advisory committees

The high number of standing advisory committees is one of the specific traits about the French approach to consultation: but once set up, the committees tend to survive their usefulness and continue to cost the taxpayer and the officials in charge of supporting them. This is why we regularly see "clean-up" operations with the government taking the axe to the forest of committees. Following ad hoc inventories and deletions from 2002 to 2005, a more general approach was adopted by a décret dated 8 June 2006, which reviewed the operating rules valid for all committees, making it more difficult to create a new body, time-limiting its existence (5 years), and streamlining its operation. In an apparently drastic move, the décret also programmed the elimination of all existing committees to take effect three years later, unless they had been re-instated in the meantime. This approach was necessary, but does not per se improve the quality of the consultation process. Also, since then, new ad hoc bodies have been created, a new clearing operation had become necessary. It has now been conducted within the simplification policy, and enacted by government in a décret approved by the Council of Ministers on 22 May. For more on the Government's approach, please refer to circular (standing instruction) dated 30 November 2012.
The system suffers from the sheer number, but also from a lack of effectiveness of the consultation process, with insufficient flexibility to adjust to different topics and stakeholders. The "open" consultation method, which employs a variety of channels, including IT supported media, to collect stakeholder views, was legalised by the 5th simplification law (17 May 2010) in its article 16 but no overall assessment of the policy has yet been conducted from a better regulation point of view.
A good example of application of the new open consultation is being given with a series of public hearings on the "energy transition", involving 1500 citizens, or the consultation on the modernisation of environmental law.

Behavioural science for smart regulators (update)

Complianceforregulators.com is, according to its self-presentation, "a one-stop source for regulators seeking information, inspiration and empowerment, in pursuit of compliance." It is managed by Telita Snyckers-Nørgaard, an experienced management consultant. She has recently posted an interesting analysis of compliance under the catchy title "From the psychologist's couch: 16 concepts that (probably) motivate the people we regulate." It seems to draw from behavioural economics which is now a required input for regulators. See also our posts on the importance of behaviour study for EU smart regulation, and nudging regulatory technique. To discover "the ostrich effect" or the "'hyperbolic discounting", follow the link above. Consultant-speak or something for smart regulators?

SCM and compliance costs fine-tuned in Malta

Quite a few of our colleagues were lucky to attend, in sunny Valetta, a meeting of the Standard Cost Model (SCM) network. 22 countries and the European Commission gathered by invitation of the government of Malta to discuss current projects and future steps to perfect, on the basis of experience developped by front-runners, an improved regulatory costs methodology.
Opened by the Parliamentary Secretary Dr Michael Farrugia, the meeting heard presentations by the hosts who were able to show how much they had advanced towards a comprehensive Better Regulation agenda (see MTsite of the unit in charge) in line with European Commission guidelines, where regulatory burden reduction figures prominently. Dr. Paul DeBattista (BR unit) presented a new "Bureaucratic Cost Measurement" index which includes fees charged, if any, for permits and the cost of delays. Then several countries (GE, UK,NL, SE) and the Commission gave an update on their national experience, thus sharing best practice.
In the second part of the SCM Working Group meeting, the delegates actively participated in a workshop tackling the way forward for Compliance Costs. The discussion revolved round the issue of when a fully fledged Impact Assessment is required in estimating the impact of Compliance Costs. Here again, the organisers had selected the most relevant recent developments in European countries.

Save-the-date of next meeting: 20th September 2013 in Finland (by invitation).

Une petite révolution dans les relations entre l'administration et le public

Au cours de sa conférence de presse, jeudi 16 mai, le président de la République F. Hollande a annoncé une petite révolution dans les relations entre l'administration et le public. Désormais, lorsque des fonctionnaires s'abstiendront de répondre à une demande, celle-ci sera acceptée et non plus implicitement rejetée, comme c'était le cas jusqu'à présent. "Le silence vaudra acceptation", a résumé le chef de l'Etat. Un texte de loi sera présenté en septembre qui délimitera les domaines dans lesquels ce changement s'appliquera. Seraient concernés des sujets tenant à la "vie courante", a dit M. Hollande sans plus de précision. [...] Du côté des syndicats de fonctionnaires, la perplexité prévaut. "Quels moyens va-t-on se donner pour pouvoir répondre dans de bons délais ?", s'interroge Brigitte Jumel (CFDT). Pascal Pavageau (FO) craint que cette disposition amène à valider des projets boiteux, mal ficelés juridiquement ou porteurs de risques. Pour plus de détails, voir article du Monde.
A signaler aussi un billet de l'Institut Turgot analysant le récent rapport Lambert/Boulard, et identifiant les limites de l'approche française, si on la rapporte aux standards internationaux en la matière (rédacteur Ph. Jaunet.)

Interdisciplinary conference on RIA: 10 June, Paris

Our friend and high expert A. Alemanno announces that an International Conference on "Theory and Practice of Regulatory Impact Assessments in Europe: A Comparative and Interdisciplinary Perspective" will take place on Monday 10 June 2013 from 12 noon at the Ecole Nationale d'Administration (ENA.) Organised by the UCL Centre for Law, Economics and Society, "the main goal of this conference is to portray and analyze the development of the use of Impact Assessments throughout the European Union and its member States as a standard of good governance and, in some cases, as a legal standard which imposes constraints on the administrative action, regulatory or legislative actions." The conference will also be an opportunity to present the first empirical results of the joint project of Ecole Nationale d’Administration (ENA) Gutenberg chair and the Centre for Law, Economics and Society (CLES) at University College London (UCL) on Regulatory Impact Assessments in Europe. For more information on this project, headed by Dr. Ioannis Lianos (Director, CLES/Gutenberg chair at the ENA) you may check here. Alberto will be speaking in Panel 3 devoted to Impact Assessment and its Actors. The key note speech will be given by the newly-appointed, yet not confirmed, Obama's regulatory tsar: Howard Shelanski.

British impact assessment calculator

A leader in RIA expertise, the UK has made further progress with the publication of new calculator of impacts, which is probably the first of its kind. While administrative burdens have given rise to several online tools (in the UK and France for instance), it is more difficult to cater for the much wider statistical needs of RIA. The calculator aims at automatically generating "the key figures needed for the impact assessment summary pages, using the profile of costs and benefits for each option." It comes as an Excel spreadsheet with pre-filled financial calculation facilities (including discounting) and consolidation in the summary sheet, with the possibility of measuring different policy options. It is not preloaded with statistical information, and could therefore theoretically be adapted for use in other economies.

Doing Business in EAC 2013

Released 2 May, "Doing Business in the East African Community 2013" takes stock of the impact of regulatory reforms in this area which has registrered significant positive economic development. Rwanda remains the best pupil in the class of 5 economies, but Burundi jumped 10 places in the world ranking thanks to several key reforms. New data show the importance of access to regulatory information. The rise in e-government initiatives in the region (as in other parts of the world) provides an opportunity to increase access to information and transparency. The report finds that "The EAC has achieved greater convergence in the complexity and cost of regulatory processes than in the strength of legal institutions relevant to business regulation."

Training course on "new comitology"

(Announcement) "How the EU Impact Assessment is changing advocacy: focus on 'New Comitology' (16-17 May)": as impact assessments are increasingly being performed by the Commission on delegated and implementing acts, new opportunities for substantive lobbying emerge. This one-day training will offer a unique opportunity to understand how your organisation may ask the Commission to run an Impact Assessment and also how to use it in the decision-making process. Our case studies will be based on the most recent and controversial risk regulatory decisions such as Bisphenol A and Neonicotinoids.
With a guest speaker from the European Parliament's newly created Impact Assessment unit, and former EU Commission officials and Court of Justice of the EU you will get a unique insight to the latest developments and get practical tips on how to work with IA in regulatory affairs.
To see the detailed programme, click here: http://www.eu-academy.eu/training/impact-assessment-comitology-stakeholders-and-advocacy/

New permit policy in Jakarta

The Jakarta Post dated 15 May reports on a commitment by the governor of Jakarta to establish a special body to handle all investment permit-related processes under one roof, following complaints about the red-tape surrounding the setting up of a business. The Doing Business ranking of Indonesia is poor (128th) and particularly weak on "Starting a Business" (166th), a fact that the article does not mention, though it quotes other DB figures. Though welcome, this one-stop-shop only concerns one of the cities likely to attract foreign investment, but it will contribute to regulatory reform measures suggested by the October 2012 OECD review.

Smarter rules for safer food (Commission)

The European Commission adopted on 6 May a package of measures to strengthen the enforcement of health and safety standards for the whole agri-food chain. Smart regulators will be interested in the claim that the proposals have been inspired by the principles of better or smart regulation, more than in the relation with the horsemeat scandal which is undoubtedly in the back of the minds of the Commision:
According to the press release, "the package of measures provide a modernised and simplified, more risked-based approach to the protection of health and more efficient control tools to ensure the effective application of the rules guiding the operation of the food chain. The package responds to the call for better simplification of legislation and smarter regulation thus reducing administrative burden for operators and simplifying the regulatory environment. Special consideration is given to the impact of this legislation on SMEs and micro enterprises which are exempted from the most costly and burdensome elements in the legislation. The current body of EU legislation covering the food chain consists of almost 70 pieces of legislation. Today's package of reform will cut this down to 5 pieces of legislation and will also reduce the red-tape on processes and procedures for farmers, breeders and food business operators (producers, processors and distributors) to make it easier for them to carry out their profession." Yes, the elements are there: simplification, risk-based approach, reduction of aministrative burde:s, impact assessment, SMEs test, consolidation. For more on the package, see press pack.

To combat bureaucracy, use emails (France)

In France, the smart regulation policy has for many years relied on measures specifically aimed at improving "the relationship between the government and the citizens". See for instance the seminal text of Law 2000-321 of 12 April 2000 which introduced several lasting improvements. On 2 May, the governament tabled a bill in Parliament empowering the government to further simplify the relationship, as part of the modernisation policy announced on 18 December. See official media release after the Council of Ministers.
Subject to a go-ahead from Parliament, the Government will be empowered to draft and enact a code on relations between the administration and the public. This code will consolidate all of the rules of administrative procedure which are now difficult to access or ascertain because they are jurisprudential or scattered among various texts. In addition, the Government will be allowed to simplify the current rules to harmonise and simplify them. The bill also carries three specific measures. Perhaps the most significant one is the creation of a right for citizens to file an administrative claim or request by electronic means. Of course, the facility is already largely available, but in France, it is deemed better to make it into an additional right to ensure proper and uniform implementation, even at the cost of one more regulation.
For some good background on the measures, see Acteurs Publics comment entitled "emails against bureaucracy" which deems that in spite of its brevity, the new rule could introduce a revolutionary change in dealing with red tape.

France: official report on normative inflation (must-read)

Just released: a new take on an old subject, well served by an innovative and attractive format, very exceptional for an official report in France. Commissioned by the Government, two MPs who happen to belong to two of the highest administrative courts, have produced a comprehensive document full of funny anecdotes and sound proposals to usher in a "legal competiviness shock" (adding to the "simplification shock" and "competitiveness shock" already reported here.) Illustrated by famous French caricaturist Plantu (known for his daily drawings in "Le Monde") the Lambert/Boulard report on normative inflation manages to stay entertaining (in French only) on a notoriously boring topic, for instance by granting "prizes" for the most absurd regulations. But its import goes well beyond France, as many of the complexity sources can be found in most foreign countries. It classicly addresses both stock and flow, and contributes both on doctrine (a new definition of smart law, droit intelligent) and 44 practical measures, see pages 51 and 98 for summary respectively for stock and flow. For background on the parliamentary mission, see previous post of 26 March.
On the same topic, the ministry of interior has calculated that in spite of the moratorium on such new legislation, regulatory burdens on local authorities will be increased by €1 bn on average in 2013 and 2014. The bulk of the expenditure however comes from wage and pension rises, rather than new regulation.

New Transparency Grades Issued for States (US)

U.S. Public Interest Research Group (U.S. PIRG, a consumer advocacy group) has been reviewing online transparency initiatives since early 2010. Its fourth annual report finds that many States have made significant improvements in the area of online transparency. The report scrutinizes the extent to which states posted a range of expenditures and made information easily accessible, issuing grades to each state government. For the first time, this year, all 50 states maintain some form of a spending transparency website, all of which were searchable except for California and Vermont. When U.S. PIRG first began reviewing online transparency initiatives in early 2010, only 32 maintained such websites. See also comment by media platform GOVERNING.