Session 3 - Plenary on implementing Principle 1 on an Explicit Policy on Regulatory Quality, - PowerPoint Presentation

1. Session 3 - Plenary on implementing Principle 1 on an Explicit Policy on Regulatory Quality, Principle 3 on Regulatory Oversight, and Principle 6 on Reviewing Performance of Regulatory Reform Programmes and Regulatory Policy . Gregory Bounds, Deputy Head, Regulatory Policy DivisionStockholm 2 June 2013 Gregory.Bounds@oecd.org

2. For all Governments, improvements to the efficiency and effectiveness of regulation can deliver significant benefitsImproving the quality of RegulationsIncrease social welfare through more effective social and economic policiesBoost economic development by encouraging market entry and competitivenessControl regulatory costs and improve productive efficiency, particularly for small to medium sized enterprises Improve the rule of law, transparency and participative democracy2

3. Challenges to Delivering High Quality RegulationLack of coordination and planning capacities to promote coherent reform across governmentVested interests may block reform, particularly where decision processes are not transparent and accountablePolitical incentives favour short term interests over long term social policy goalsRegulation becomes outdated in changing environmentsRegulation is exercised by many levels of government and may be duplicative or excessiveRegulators may not be equipped, or have incentives, to assess the cost of regulation and whether regulation is a practical solutionAll Governments find it difficult to control the quality and quantity of regulation, this can be due to:3

4. OECD Policy Recommendations on Regulatory Reform have evolved over two decades1995 Recommendation of the Council on improving the quality of Government regulation - Commitment to core regulatory principles. 1997 Report to Ministers on Regulatory Reform – incorporates market openness, competition policy, regulatory policy and micro economic reform principles. 2005 Guiding Principles for Regulatory Quality and Performance – basis for Regulatory Reform Reviews of 25 OECD countries and Russia, China, Brazil, Indonesia.2005 APEC/OECD Integrated Checklist for Regulatory Reform - Self Assessment of US, Australia2009 Recommendation on Competition Assessment2009 Establishment of the Regulatory Policy Committee2012 Recommendation of the Council on Regulatory Policy and Governance – 12 principles addressing the policy cycle of regulatory design, enforcement, review and evaluation. 4

5. The Regulatory Governance Cycle5

6. Regulatory costs can arise anywhere in the Regulatory Governance Cycle6

7. Apply an Explicit Policy for Regulatory QualityDevelop Regulations through Communication, Consultation and EngagementEmpower Institutions for Regulatory Oversight Integrate Regulatory Impact AssessmentReview and Reform the Regulatory StockAssess Regulatory Reform ProgrammesCo-ordinate the activities of Regulatory AgenciesEstablish effective Review ProcessesApply Risk RegulationPromote Regulatory Coherence across levels of governmentFoster regulatory management capacity at sub-national governmentPursue International Regulatory CooperationRecommendation of the Council on Regulatory Policy and Governance.7

8. A government-wide policy on regulatory quality, the institutional setting to support its implementation and regular review of its functioning in practice.What practices reflect a systematic implementation of the Recommendation?Which of these practices merit a more systematic adoption in OECD countries in the next five years?What obstacles are you facing in implementing practices like this, and how can these obstacles be overcome?Recommendation of the Council on Regulatory Policy and Governance.8

9. Regulatory Policies are Necessary for Progress (Principle 1)Policies have two main elements: systematically improving rule making and keeping regulations up to dateThe main objectives of regulatory policies tend to be:Increasing social welfare through more effective social and economic policy – net benefit principleControlling regulatory costs for business developmentImproving public sector efficiency and performanceReducing regulatory discretion and opportunities for corruption, and improving access to regulation Should have a preference for competition, the promotion of trade and innovation through efficient markets. Ministerial accountability for regulatory policy (specific and general roles)Endorsed at a high political level. Effective reform requires organised procedures with sustained political backing and adequate resources 9

10. Regulatory Policy (Principle 1)Existence of a whole of government policyThe elements in the policy – correspondence with the RecommendationEx ante - ex postCompetition policy and efficient marketsPerformance based regulationPolitical endorsement. Ministerial accountabilityCommunication strategyWhat are key measures to identify and evaluate?10

11. Institutions to drive Regulatory Policies (Principle 3)Regulatory oversight bodies with whole of government responsibilityAdvocate benefits of reformPerform a gatekeeper role on quality of RIAProvide training and clear guidance to regulatorsPromote regulatory review and reform Coordinate ex-post evaluationImprove the effectiveness of regulationIndependence with respect to technical assessmentLocated close to the centre of governmentPossibility of shared rolesThe right set of institutions are required to ensure implementation of regulatory policy:11

12. Regulatory Oversight (Principle 3)Existence of a bodyIndependence technical expertiseRole and functionsLocation near the centreReview and return of RIATraining and guidance Coordinating ex post reviewPeriodic assessmentWhat are key measures to identify and evaluate?12

13. Evaluate if regulatory policy is being implemented effectively (Principle 6)Clear criteria for polices and programmes to evaluate effectivenessData collection strategies (while minimizing internal red tape)External review function – such as by the national Audit OfficeFocus on social and economic outcomes – not just the achievement of targets. Regular performance reviews of how regulatory policy is being implemented in practice. 13

14. Reviewing Regulatory Policy and Programmes (Principle 6)Systematic external allocation of review responsibilitiesCovering all program elementsRIAEx post Admin burden reductionPerformance of regulatorsTransparency and inclusivenessPublic reportingData collection strategiesWhat are key measures to identify and evaluate?14