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Best Practises RIA

This document summarizes best practices for regulatory impact analysis (RIA) in OECD countries. It discusses 10 key criteria for effective RIA programs: 1) maximizing political commitment, 2) carefully allocating responsibilities, 3) using a consistent but flexible analytical method, 4) developing data collection strategies, 5) targeting RIA efforts, 6) integrating RIA early in the policy process, 7) involving the public, 8) communicating results, 9) training regulators, and 10) applying RIA to existing regulations. The document concludes that while RIA has led to better regulation design and impact understanding, implementation and quantification challenges remain.

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123 views16 pages

Best Practises RIA

This document summarizes best practices for regulatory impact analysis (RIA) in OECD countries. It discusses 10 key criteria for effective RIA programs: 1) maximizing political commitment, 2) carefully allocating responsibilities, 3) using a consistent but flexible analytical method, 4) developing data collection strategies, 5) targeting RIA efforts, 6) integrating RIA early in the policy process, 7) involving the public, 8) communicating results, 9) training regulators, and 10) applying RIA to existing regulations. The document concludes that while RIA has led to better regulation design and impact understanding, implementation and quantification challenges remain.

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Best Practices on Regulatory Impact Analysis in OECD countries

Regulatory Governance Initiative in South East Europe

Cesar Cordova-Novion Deputy Head OECD Regulatory Reform Programme Sofia, Bulgaria 23 January 2003
1

Strategies for Assuring Regulatory Quality


I. Building a regulatory management system
Regulate the regulators through transparency and accountability mechanisms (laws, policies, institutions, enforcement, etc.)

II. Improving the quality of new regulations


Control of the flow (RIA, consultation, alternatives, co-ordination, etc.)

III. Upgrading the quality of existing regulations


Control of the stock (deregulation, up-dating, codification and restatement, formalities, etc.)

Methods to take a regulatory decision


Political Expert Consensus

Benchmarking

Empirical

RIA Best practices


!

RIA is required before adopting a regulation in 13 OECD countries


OECD developed ten criteria
OECD 1997 Regulatory Impact Analysis: Best Practices in OECD countries, Paris

Based on
16 countries reviewed under OECD Regulatory Reform Programme

Key issues
Theory VS. Practice
Experimental period and the enforcement

Fine tuning the instrument(s)


A continuous quality process Start small, scale rapidly

Shifting and balancing the emphasis on carrots and sticks Periodic external evaluation of the instrument(s)

Aspects of RIAs in OECD countries


(28 countries)
14 12 11 13 11 11 11 9 8 7 7 11 1998 2000

Number of countries

10 8 6 4 2 0 RIA for draft bills RIA for subordinated regulations RIA quantifies costs 4

RIA quantifies benefits

RIA shows benefits higher than costs

RIA publicly consulted

1. Maximise political commitment to RIA


!

Endorsement at the highest levels of government Supported by clear ministerial accountability


Key issues

Embedded in law or secondary regulation Cabinet level document Fragmentation of governance structure and administrative culture Scope of RIA (primary, secondary regs, sectoral regulators, soft-law, subordinated regulations, etc). The role of Parliament 6

2. Allocate responsibilities for RIA programme elements carefully


!

Decentralisation
!

to ministries and regulators to favour ownership and integration into decision-making

Central unit functions:


! ! ! !

manage RIA process challenge RIAs training and guidance for RIA drafters (also advocate reforms)

Key issues Resources for RIA drafter and for the central unit Credibility of challenge function of the central unit 7 Technical Vs political gate keeper

3. Use a consistent but flexible analytical method


Qualitative Vs. Quantitative analysis Benefit-cost analysis Risk assessment


Key issues

Difficulty to assess benefits Difficulty to assess dynamic effects A standard methodology to provide comparability Low technical skills in the public sector (rule-making training) individual VS cumulative impacts 8

4. Develop and implement data collection strategies


Experts (e.g. interviews) Surveys & studies Panel tests Models


Key issues

Clarity and precision of guidance Evidence-based training Resources for data gathering
9

5. Target RIA efforts


Primary and Secondary regulations Thresholds Common sense Two-step approach


Key issues

Setting thresholds The onus of the proof Underestimation of the first RIA in a two-step approach

10

6. Integrate RIA with the policy making process and begin as early as possible

Avoid to transform RIA on a justification report or internal red tape Assessment of alternatives to regulations
Key issues

Emphasis on alternatives (including do nothing one) Understanding regulatory compliance Costing enforcement (including lower levels of governments) Tradition of economic instruments 11 Capture of the challenge function

7. Involve the public extensively


Democratic/participation dimension Data gathering mechanisms Increase compliance Accelerate and ease the implementation
Key issues

Time constraints The power of exposure Mandatory publication or not Active consultation techniques (e.g. panel tests) Passive consultation (notice and comments)
12

8. Communicate the results

Improves transparency and accountability Improves regulatory compliance Increases trust in government and RIA
Key issues

Parliament may require RIAs for draft laws Response to comments to draft RIAs

13

9. Train the regulators


A decision-making technique A vehicle for a cultural change for regulators


Key issues

Guideline and training material (including e-based) Legal Vs evidence-based culture

14

10. Apply RIA to existing as well as new regulations

RIA as a performance assessment instrument

Key issues Ex ante Vs ex post evaluation Maximising investment Strategic approach to massive reforms

15

Conclusions
Achievements
A better designed and more effective instrument Better understanding of regulatory impacts

Challenges
Implementation Quantification & targeting Increasing objectives/criteria
16

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