© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Background to impact assessment as a tool for policy development and review Workshop on Impact Assessment organised by ERRADA and Sigma In Cairo March 8th 2010 Presentation by Edward Donelan, M.A., Barrister- at- law,(Kings Inns, Dublin, Middle temple, London) Senior Advisor, SIGMA

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Overview In this presentation I will:  Describe the evolution of regulatory reforms in OECD and EU countries.  Explain how the emphasis in regulatory reform has shifted from deregulation and downsizing government to an emphasis on regulatory quality  Describe some of the principal policies, tools and institutions used in improving the quality of regulation in OECD and EU countries  Suggest the next steps following the workshop prognosis for future developments

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Evolution of regulatory reform  As societies become more complex regulatory burden increased  The 1960’s was the period of rights regulations (consumers, labour health and safety etc)  De-regulation(1980s) lead to more regulations (Utilities, airlines, telecoms)  Regulatory Reform (OECD work led to concept of regulatory management)  New Public Management

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU  Regulation is the main tool of the modern state  Regulation to address market failures and to limit risk  Too much regulation interferes with the functioning of the market (labour laws) too little regulation has worse consequences (financial Armageddon)  Who should regulate (Government or independent regulators)?  Who should be involved (business interests, consumers, labour unions)?

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Rationale for Regulatory Reform Regulatory policy (OECD) / Better, Smart Regulation (EC) The development of a set of principles by which regulations should be made, e.g., the Mandelkern report recommended the following principles to be applied to regulations that they should be:  Necessary  Proportional  Respect subsidiarity  Transparent  Made by accountable regulators  Accessible  Simple

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Why an EU better regulation policy?  Recognition that improvements in the quality of regulations can bring about economic and social improvements.  In some ways, this is not new but reforms to regulation under the heading of ‘Better Regulation’ have been at the centre of the European Union for the last decade.  So what is Better Regulation in Europe?

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU What is Better Regulation in Europe? Better regulation policies have been developed in the European Commission and most EU Member States. In the European Union Better Regulation means the programme launched in 2002 to:  Simplify and generally improve the regulatory environment.  To cut red tape, improve the quality of regulation.  To design better laws for consumers and business alike. In my view better regulation is a policy which:  Commits a country to a set of principles to achieve better regulation, e.g., transparency, accountability, proportionality, effectiveness and efficiency.  Is designed to reduce red tape and administrative burdens.  Is aimed at improving the quality of the flow of new regulations and the stock of existing regulations.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Drivers of better regulation Plenty of materials but two sources are suggested  OECD (2005)Guiding Principles for Regulatory Quality and Performance and related materials  European Union policies on Better Regulation and country examples: Denmark, Netherlands and the United Kingdom. There are three ways in which Better Regulation is delivered:  Policies.  Tools.  Institutions.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Policies In Europe Better Regulation’ is the policy to improve the quality of regulations and the regulatory process. It is concerned with:  The simplification of the regulatory environment including the reduction of administrative burdens.  The management of the stock of regulations.  Generally improving the administrative and regulatory environment for citizens and business.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Tools  Impact assessment.  Consultation.  Administrative burden measurement.  Improving the accessibility of the stock of legislation by electronic publishing, consolidation and so on.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Institutions  Government.  Ministries.  Jordan, the Legislation Opinion Bureau, Ireland, Office of Attorney General, UK, BERR Task Force.  Task forces (committees, working parties).  Conseil d‘ Etat (Belgium France, Italy, the Netherlands.  Iindependent regulators and bodies (Germany and the Netherlands).

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Current challenges in OECD and EU countries  Sustainability of reforms.  Prioritisation: no one view on where to go next  Current emphasis in Europe on:  Cutting Red Tape, (SCM)  Improving the flow and stock of regulation (RIA)  Next emphasis remains to be seen but Better Regulation is a priority for the President of the European Commission  The challenge globally is that there is a need for a regulatory environment that is as sophisticated as the challenges posed by the global economy

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU General relevance for Egypt  Better regulations cost less and add more value.  More developed countries tend to have better regulatory environments.  Crucially, the European Commission and many countries (notably Belgium, Denmark, France, the Netherlands, Sweden the United Kingdom) recognise that the regulatory process and environment need continuous improvement  Having a better regulation policy facilitates consistency in criteria used among different ministries in the same executive.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Particular relevance for ERRADA  The review by ERRADA is a regulatory reform policy.  Business related regulations are reviewed against a set of criteria:  Necessity  Investment friendliness  Legality In some cases it might be worth posing the question: Are the costs involved in these regulations more or less than the benefits?

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Use of impact assessment by ERRADA  Impact assessment is a more structured way of policy making and brings the rigours of economic analysis to solving policy problems.  Through a series of questions those who use impact assessment questions ex ante:  What is the problem?  What are the alternative solutions?  What are the costs and benefits of the alternative solutions? And ex ante asking:  Are these regulations having the effect intended?  What needs to be changed to make them work? The analysis used by ERRADA is a basic impact assessment. In the second part of this seminar we will look at how EU and OECD countries have developed impact assessment as a policy-making tool.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU A global vision for future developments in this field  Continuous improvement needed.  There are frequent policy failures despite the best efforts of all concerned usually because things are done too quickly or in response to political expediency  Already strong evidence of convergence in practices among countries.  Gaps between principles and practice within and across countries show that we still don’t understand fully how best to regulate.  Awareness of the issue continues to develop and Better Regulation will remain on the agenda of the Swedish Presidency of the EU and those that immediately follow.

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Reading list George, C. and Kirkpatrick, C. (eds.) (2007) Impact Assessment and Sustainable Development: European Practice and Experience, Edward Elgar: Cheltenham. Green Book greenbook.treasury.gov.uk Appraisal and Evaluation in Central Government Hague, R., Harrop, M., New York (2001) Comparative Government and Politics, Kirkpatrick, C. and Parker, D. (eds.) (2007)Regulatory Impact Assessment: Towards Better Regulation?, Centre on Regulation and Competition Series on Competition, Regulation and Development, Edward Elgar: Cheltenham. OECD 1997, Regulatory Impact Analysis: Best Practices in OECD Countries, Paris OECD 2005, Policy tools for regulatory quality assurance SIGMA (2007) Regulatory Management Capacities of Member States that joined the EU on 1 May Parsons, W., Cambridge (1995) Public Policy Rosenbloom, D., Kravchuk, New York (2007) Public Administration, Stevens, A., New York (2003) Government and Policy of France,