Regulatory Accountability Act (US)

The excellent and often quoted RegBlog carries a comprehensive study dated 22 August about plans to improve the regulatory process by strengthening accountability
"The Regulatory Accountability Act (RAA) would amend the Administrative Procedure Act (APA) by, among other things, adding procedural requirements for new rules and guidance documents, increasing the role of the Office of Information and Regulatory Affairs (OIRA) in reviewing new regulations, and changing the scope and availability of judicial review of agency rules. Its proponents say that it would “improve accountability and the integrity of the rulemaking process,” while its opponents say the bill will prevent agencies from regulating. (...) For three types of regulations—major, high-impact, and novel—the RAA would require agencies to publish an advance notice of proposed rulemaking at least ninety days before the notice of a proposed rule. While many agencies already issue advance notices, the bill would require agencies to do so and to include a determination of the legal authority for the potential new rule." For a lot more, see RegBlog.

World Class Economic Regulators join up in OECD

Economic regulators will soon have their own forum in OECD to discuss, with assistance from the international regulatory experts, issues of common interests such as how to guarantee the right degree of independence from government or how to measure their performance and give their economies value for money. On 24 April, some 20 regulating agencies and supervisory departments from some 15 countries met at OECD HQ for the third time to address a range of governance and efficiency issues. Best practices from the US Energy Commission (by John R. Norris) and the Portugal Water Authority (by J. Melo Baptista, from ERSAR) were scrutinised. The quality of the group's work and potential future contribution to the sustainable management of national public utilities (such as energy, telecom and water) may be recognised by member states by granting the network official status under the Organisation's operating rules. This will ensure that a new wealth of OECD economic literature will be updated for regulators world-wide, drawing lessons from success stories, sharing best practice and providing guidance to governments on when and how it may be best to delegate to an arms-length agency the management of such network assets. Any new published resource will be reported on this blog.

"Growth duty" and new code for regulators? (UK)

8 March press release: British Business Minister M. Fallon "launched two consultations to re-shape the way regulators work with business, so that upholding standards does not act as a barrier to growth and enterprise. Businesses and regulators are invited to contribute to the development of a proposed 'growth duty' for regulators - which will require regulators to take into account the impact of their activities on the economic prospects of firms they regulate.
A parallel consultation will seek views on an updated Regulators' Code - which removes uncertainty for businesses by clarifying what they can expect from those that regulate them, including accessible advice and methods of enforcement that are tailored to meet the needs of the business.

Self regulatory body for UK press, recommended

Following a widely report scandal on phone hacking, UK Prime Minister David Cameron ordered a public inquiry into improving the culture, practices, and ethics of the British press. The inquiry concluded last week with a long-awaited report from Judge Brian Leveson, who recommended the creation of “an independent self-regulatory regime” underpinned by the law to help police the industry. Acting independent of Parliament, the regulator would need to have the power to impose a range of sanctions, including fines, demands for apologies, and reporting corrections. If industry did not create its own effective entity, Leveson called for Parliament to pass legislation to give necessary legal powers to a self-regulatory body and establish standards.

Among other recommendations in report:

• A committee composed of newspaper editors and independent members must establish a Standards Code for ethical journalism;
• The proposed regulatory body would have an arbitration system in place allowing victims to seek redress without the expense of costly litigation;
• The proposed regulator would replace the Press Complaints Commission (PCC), a voluntary regulatory body with no legal powers. Newspapers may choose to be regulated by the Office of Communications, which currently regulates British broadcasting, the most trusted form of news in Britain.

For more, see RegBlog analysis.

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.

Report on agencies (France)

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

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).

India: senior businessman calls for regulatory oversight body

Another well documented article dated 13 November completes the picture presented by a recent post. By the same author (a former chairman of the Telecoms authority) it calls for the establishment of an independent oversight body such as exists in the UK an other countries. This article summarizes the Indian RR approach and argues that the stock-taking of existing acts, which has been conducted in India in the past, should be viewed as only the first step of regulatory reforms. Now "it was expected that an institutional mechanism would be put in place towards producing high-quality regulations based on the touch-stone principles of legitimacy, efficacy, transparency and accountability. To accomplish this enormous task, an oversight body to provide structured directions to the regulatory regime of the country is needed. Such a body already exists in many developed countries.
In order for it to be effective, it should be located in the prime minister's office, vested with powers to independently coordinate, review and approve all regulatory policies and thus function as a focal point for quality regulation and good regulatory governance in the country. Such an oversight institution would provide a comprehensive regulatory management system through which regulations are developed, enforced and adjudicated, thus supporting the broader objectives of efficiency, transparency and accountability in governance.
Accountability of regulators cannot be addressed by a single piece of legislation. In the United Kingdom, there is a Committee of Parliamentarians which monitors the functioning of various regulators. Perhaps this can be experimented with in our country as the first immediate step for regulatory oversight."

Indian RR: poor results

Though an impressively dynamic economy, India still does not offer a competitive business environment. According to the 2012 Doing Business ranking, though present in the 30 economies that improved the most over time, India still ranks low overall , with its rank improving marginally from 139 to 132 between the 2011 and 2012 reports. On the reform undertaken in India, the 2012 report said, “When India dismantled a strict licensing regime controlling business entry and production the benefits were greater in states that had more flexible labour regulations”.
These results point at insufficient results fromRegulatory Reform which, though on the books since the late 1990's seems to be slow in delivering, as reported on this blog.
Today, in awell documented article is published on India Express, a former chairman of Public Interest Foundation, gives figures about how the Indian legal corpus has been streamlined, but not sufficiently. Texts remain from the colonial days. He also calls for a framework to channel regulatory activities ("regulate the regulators.")

Extra red tape on rule making? The new RAA (US)

An interesting discussion in the US, on the same theme as the previous post (accountability of regulators) is provided by a recent post on "the Hill" (US Congress Blog) under the polemic title: "Regulatory reform good for multinationals, yet bad for you."
The Regulatory Accountability Act of 2011 (RAA), a bipartisan bill introduced in the House and Senate, updates rules on how Federal agencies analyze costs and benefits, with detailed procedures for agencies promulgating regulations that are projected to have a minimum effect of at least $100 million on the United States economy.
The vice-chair of the American Sustainable Business Council questions the proposed legislation. It "will likely dramatically drive up the cost of almost every rule-making process and budget of a federal agency. Second, federally elected officials will be stripped of their ability to responsibly lead our country. And third, the RAA is a highway to never-ending lawsuits by special interests against the federal government.
The RAA is designed to micromanage every federal agency in its efforts to create rules necessary to carry out legislation passed by Congress.
By doing so, it turns over 60 years of effective regulation promulgation under the Administration Procedures Act into a protracted process that will stretch the time needed for rule-making into decades. Federal agency budgets will need to be expanded by hundreds of billions of dollars to comply with the RAA and perform their usual functions of protecting the public and small businesses from unsafe products and practices."
A similarly critical view is taken by OMB Watch, a nonprofit research and advocacy organization.
For a more balanced view, see RegBlog post reporting the most recent hearing in the House (Judiciary Committee).

BR by better regulators (UK)

Regulating the regulators to enhance the quality of regulation. OECD papers regularly call for greater accountability by regulators toward government for delivering on stated policies, with results to be obtained by a change of culture including greater evidence base for regulation, and effective consultation, with appropriate oversight arrangements (see for example new Recommendation on Regulatory Policy and Governance section 7).
Yesterday the UK fleshed out these principles in a new formulation for the British context. The Business and Enterprise Minister made a number of proposals for improving the regulatory landscape, based on "a more mature relationship between business and regulators" (see BIS press release) including :

• More use of co-regulation, where business shares a degree of regulatory responsibility, for example through industry bodies setting professional and working standards
• Greater 'earned recognition' – where regulators recognise business activities that support compliance and reduce intervention, creating a stronger incentive for private sector led compliance
• A role for Local Enterprise Partnerships (LEPs) to improve the transparency and accountability of local regulation – bringing business and regulators together to look for ways to reduce unnecessary burdens
• Clearer, more straightforward guidance – so that businesses, particularly SMEs, have greater access to clear guidance on what they need to do to comply.