Simple, Effective,
Transparent Regulation: Best
Practices in OECD countries
Cesar Cordova-Novion
Deputy Head of Programme
Regulatory Reform, OECD
Regulation and Regulatory
Management
Regulation is the most widely used
policy instrument of governments
 Regulation creates benefits and costs
for society
 Ensuring high quality regulation has
become a key priority for OECD
governments

Development of the OECD
regulatory quality concept
 A decade
of experience and
analysis, in terms of
Economic structural adjustments
 Social cohesion
 Good governance

Three Stages of Regulatory
Reform
Policy Objectives of Reform
- Managing aggregate
regulatory effects
- Setting frameworks
REGULATORY
MANAGEMENT
Characteristics of Reform
- System-based
- Pro-active
- Improving flexibility in
regulatory regimes
- Producing effective and
Low cost quality regulations REGULATORY
- Improving regulatory
QUALITY
processes
IMPROVEMENT
- Improving access to
regulations
- Instrument-based
- Elimination,
- Instrument-based
- Reactive
- Reduction,
- Simplification of
regulations
DEREGULATION
- Pro-active,
- Focus on quality, but
one instrument at
the time
Strategies for Assuring
Regulatory Quality
I. Building a regulatory management
system

Regulate the regulators through transparency and
accountability mechanisms
II. Improving the quality of new regulations

Control of the flow
III. Upgrading the quality of existing
regulations

Control of the stock
I. Building a Regulatory
Management System
1. Adopt regulatory reform policy at the highest political
levels

22 countries have published a quality regulation policy
2. Establish explicit standards for regulatory quality and
principles of regulatory decision-making

18 countries have explicit principles of good regulation
3. Build regulatory management capacities

20 countries have a dedicated body (or bodies) consulted
when developing new regulation
– 12 of them assess RIAs
– 9 dedicated bodies annually report progress of individual
ministries
The OECD Reference Checklist for
Regulatory Decision Making










Is the problem correctly defined?
Is the government action justified?
Is regulation the best form of government action?
Is there a legal basis for regulation?
What is the appropriate level (or levels) of government for
this action?
Do the benefits of regulation justify the costs?
Is the distribution of effects across society transparent?
Is the regulation clear, consistent, comprehensible and
accessible to users?
Have all interested parties had the opportunity to present
their views?
How will compliance be achieved?
II. Improving the Quality of New
Regulations
4. Regulatory Impact Analysis

In 12 countries RIA is required before adopting a regulation
5. Systematic public consultation procedures with
affected interests



In 14 countries consultation with affected parties when
preparing subordinated regulations is mandatory
14 countries publish draft laws under a system of ´notice and
comments´ (13 in the case of draft regulations)
8 countries (7 through the Internet) mandatory publish a list of
draft subordinated regulations
6. Using alternatives to regulation

Specific guidance to assess alternatives has been
implemented in 11 countries
7. Improving regulatory co-ordination

In 14 countries the competition authority is usually consulted
Aspects of RIAs
14
Number of countries
12
13
11
11
11 11
11
10
1998
2000
9
8
8
7
7
6
4
4
4
2
0
RIA for
draft bills
RIA for
subordinated
regulations
RIA
quantifies
costs
RIA
RIA shows
quantifies benefits
benefits
higher than
costs
RIA
publicly
consulted
III. Upgrading the Quality of
Existing Regulations
(in addition to the strategies listed above)
8. Reviewing and updating exiting regulations


Automatic review requirements of specific laws are used in 18
countries.
Only in 5 countries a periodic evaluation of existing
regulations is mandatory for all laws.
9. Reducing red tape and formalities
Initiatives to improve business licences and permits

‘silence is consent’ rule in
8 countries

one-stop shops in
13 countries

ongoing review programme in
13 countries
In sum

Regulatory Reform means


Improving the quality regulation through a mix
of regulation, deregulation and re-regulation
Implementing and enforcing a regulatory
management and reform programme based
on:




Principles and Policies
Institutions (i.e. budget and resources for
control unit)
Incentives (i.e. positive and negative)
Tools (RIA, consultation, communication,
alternatives, periodic reviews etc.)
To know more on OECD
Regulatory Reform
Programme
http://www.oecd.org/subject/regreform/