"Like-minded" MS call for strong Smart Regulation Action Plan

Last week, in a landmark letter to President Barroso, the ministers in charge of economic affairs of 13 Member States called on the European Commission to inter alia "go beyond looking at administrative burdens (also including compliance costs; consider sectoral targets... and produce a roadmap to reduce the overall regulatory burden over the next 2 years." The letter also calls to publish an annual statement of the total net costs to business of new legislative proposals and maintain an annual balance of close to zero net costs. The rest of the 10 Point Plan addresses other dimensions of smart regulation (RIA, the Impact Assessment Board, the Think Small First principle, fitness checks, and common commencement dates.)
For positions agreed by all 27 MS, the best source is the regular Council conclusions (see for instance June 2012 Conclusions under Danish presidency) which are of course more consensual.
It is not rare that a group of MS publish a joint position on the development of smart regulation, see for instance the report "Smart Regulation: a cleaner, fairer and more competitive EU" issued by the UK, The Netherlands and Denmark in March 2010, but up to now, this group had not got so close to a majority of MS.
This new joint letter intervenes at a moment when the European Commission is finalising its Communication on "EU Regulatory Fitness", to be published on 12 December, two years after the issuance of its Communication on "Smart Regulation in the EU." In the past months, the Commission has been taking stock of the progress made and drawing lessons from its experience. A stakeholder consultation was open from June to September to collect views and proposals to inform the next communication. The Commission website publishes the consultation document and all 118 contributions received, among which those of European Chambers of Commerce and Industry (Eurochambres) and Businesss Europe. Both organisations strongly support the smart regulation process encompassing the entire policy cycle and in slightly different ways, their contributions both offer much technical expertise.

New source of expertise on Smart Regulation: Latin-Reg

Central and South American experts, led by Mexico's chief smart regulator Alfonso Carballo, are uniting to share news and lessons learnt from current projects. Latin-Reg is a new site, still partly under development, offering a clearing house for regulatory reform expert contributions in English and in Spanish originating from the region. Authors include Gustavo Mendoza, Margherita Corina, Rafael Hernandez and others.
Among the first papers in English:
- the (Mexico) System for Rapid Business Start-up (SARE) to promote regulatory simplification at the municipal level;
- the subnational regulatory managemetn systems, an adaptation of the OECD "Indicators of Regulatory Management Systems", to the federal structure of Mexico;
- benefits derived from the regulatory burden reduction program.
A site well worth visiting regularly. Spanish speaking experts will also be interested in the blog "Smart Regulation in Spanish."

How regulation influences companies' location

Emmanouil Schizas (London) points us to an interesting article published by the World Bank and entitled "Is better information always good news ? international corporate strategy and regulation." This paper develops a simple model to analyze the interaction between strategic corporate public good provision, international firm location and national regulation. An information-based strategic corporate public good provision mechanism is proposed to shed light on recent firm behavior within different regulatory environments.

MPs call for external scrutiny of public policies (France)

The French National Assembly (Evaluation and Control Committee), in its 22 November meeting (minutes just published) continued discussion of options for the modernisation of public action, the new concept which has replaced administrative reform in France. Two MP rapporteurs who had filed a December 2011 report on the comprehensive operation of general review of public policies (RGPP in French) have updated their analysis and now recommend that any future modernisation strategy be preceded by a systematic evaluation of the public policies concerned. What is new is that the Mr Cornut-Gentille suggests that the evaluation be done not as usual by an administrative body but by an independent "personality" (=VIP) "invested with a degree of legitimacy within the administrations based on their authority and willingness to reform." See reactions (including international comments) on the MP's official website. The Commitee endorsed the new report and set up a small parliamentary team to supervise its implementation. This keen interest of Parliament in administrative reform illustrates the importance of the institutional design issues at stake, and more specifically the "multi-level" issues of local governance, which will be revisited again in coming reforms. Last week an amendment was introduced by Parliament into the 2013 Budget act to oblige government to provide more regular information on progress of administrative reform.

New Dutch methodology to reduce regulatory costs

Delegates to the twice yearly meeting of (European) Directors and Experts of Better Regulation (DEBR) in Dublin (22-23 November) were informed about recent research and testing of a new methodology to remove or lower obstacles to business innovation and growth by way of further reductions in the regulatory burdens. A Cost-driven Approach to Regulatory Burdens (CAR) offers a change of perspective by taking as a starting point the actual costs incurred in companies to comply with regulation, irrespective of which legislation is at the origin of the cost. The new methodology, developed by SIRA Consulting in the Netherlands, a company to which we already owe the widely applied SCM, is being tested on two pilot studies (chemical industries and European bakeries) and is expected to be finalised during 2013. It seeks to correct some of the limitations of the Standard Cost Model. Delegates were impressed by the conceptual shift underway, but expressed concern that the new method may be expensive and/or difficult to implement. This contribution enriches the discussion started earlier this year by a key paper from Germany: Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government, which also aims to address the full range of regulatory costs.

One-in, two out to further cut red tape (UK)

The costs of red tape on business will be slashed at double the present rate, according to a new measure announced two days ago by the UK government.

From January 2013, every new regulation that imposes a new financial burden on firms must be offset by reductions in red tape that will save double those costs.

The new 'One-in, Two-out' rule will be imposed across all ministries, and will apply to all domestic regulation affecting businesses and voluntary organisations.

It will replace 'One-in, One-out', which requires the costs of every new regulation to be matched by savings of an equivalent amount. According to BIS, this policy "has already reduced net costs on business by almost £1bn since January 2011 helping to make government leaner, fitter and more focused on what businesses need, enabling them to get ahead and compete in the global economy."

 

Indian reform caught in red tape

“India's boldest attempt in two decades to sweep away the remnants of the License Raj permit system that has crippled infrastructure development has fallen victim to the very scourge it was designed to defeat. A proposal for a government panel (a “National Investment Board”) chaired by Prime Minister to fast-track major infrastructure projects and boost a flagging economy seems to have stalled amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus” (Indian Express). See also Times of India article.