C.H. Montin, Tbilisi 11 Tbilisi, 12 November 2014 Developing Regulatory Impact Assessment In Georgia Overview of the RIA process & methodology Charles-Henri Montin, Smart Regulation Consultant Former Senior Regulatory Expert, Ministry of economy and finance, Paris

C.H. Montin, Tbilisi 2 Overview of the RIA process

C.H. Montin, Tbilisi 3 RIA: A process of evidence based decision making (elements of RIA)  Identifying and defining the problem  Spelling out the desired objective(s)  Establishing the need for new regulation  Elaborating the different options, considering alternatives to regulation  Consultation of stakeholders  Analysing the options (assessment of the likely impacts)  Recommending the policy option  Communicating the results  Monitoring (regulation) and reporting

C.H. Montin, Tbilisi 4 RIA at all stages of the regulatory cycle Source: UK IA handbook p. 58

C.H. Montin, Tbilisi 5 Components of RIA  Policy objectives: outlines existing regulations, defines the problem and shows why action is necessary; make the case for regulation  Alternatives: lists range of options beside regulation, including non-regulatory options  Benefits & Costs: quantifies the impacts  Consultation: shows who was conferred with and the feedback collected and how it was used  Compliance and enforcement: explains the policy on conformity to the regulations and tools to ensure it is respected, expected compliance rates; discard unworkable proposals

C.H. Montin, Tbilisi 6 RIA requirements in OECD countries

C.H. Montin, Tbilisi 7 Quantification of benefits and costs RIA report must quantify the impact of different options  direct and indirect benefits and costs and impacts on environment, government, business, workers, consumers, etc. of each option  Range of other impacts depend on government policy priorities: sustainable development, balance between societal and economic goals, inclusive growth, etc  Special focus of regulatory burden of each alternative  Specific effects on small business if the government has an SME policy  Recommended solutions must impose least costly information and administration burden  Verification system ensures that all impacts have been fully considered

C.H. Montin, Tbilisi 8 Scoping issues  Many countries have linked RIA requirements to the magnitude of potential impacts of proposals  Difficult to identify suitable threshold  Quantitative vs. qualitative thresholds?  Primary and/or secondary legislation?  USA – annual costs exceeding $100 mil. Or more  Canada: $10 million or more  France: no threshold yet but other selection criteria  Range of impacts to reflect government priorities  Solution: “proportionality” of RIA effort

C.H. Montin, Tbilisi 9 OECD “Ten good practices”  1. Maximise political commitment to RIA.  2. Allocate responsibilities for RIA programme elements carefully.  3. Train the regulators.  4. Use a consistent but flexible analytical method.  5. Develop and implement data collection strategies.  6. Target RIA efforts.  7. Integrate RIA with the policy-making process, beginning as early as possible.  8. Communicate the results.  9. Involve the public extensively.  10. Apply RIA to existing as well as new regulation.  Source: OECD (1997), Regulatory Impact Analysis: Best Practice in OECD Countries, Paris.

C.H. Montin, Tbilisi 10 Conclusions  The RIA scheme is a continuum from inception of the policy to the monitoring of its success  It is an integrated process where many different quantitative, qualitative, opinions and facts, must be consolidated for decision at the political level  Consultation feedback must be integrated at different stages and be allowed to impact the policy  Data collection difficulties must be anticipated and met with “creative” economics

C.H. Montin, Tbilisi 11 To learn more about RIA methodology…  OECD “text-books” –“Introductory handbook for undertaking RIA”Introductory handbook for undertaking RIA –“Building a framework for RIA”Building a framework for RIA  RIA methodology (UK) –Impact assessment toolkit 2013Impact assessment toolkit (p. 57 sq of BR framework manual) –UK Government RIA site ; RIA templateRIA sitetemplate  RIA methodology (EU) –European Commission RIA siteRIA site –Guidelines for conducting RIAGuidelines  France: Guide de LégistiqueGuide de Légistique