RIA in Practice: The International
Narrative
Dr. Malathy Knight
Research Associate, Verite Research
March 26th, 2015
Road map
• RIA: “What” and “Why”
• Unpacking the international narrative on RIA
• RIA in developing countries: issues and
challenges
• Getting to workable solutions
Some caveats
• What is a “developing” country in this context?
- Financial resources
- Technical capacity (linked to some extent to financial
resources)
- “Governance” per se not necessarily a part of this mix; BUT
under-developed institutional structures/processes can be
a result of financial resource constraints
• No one-size fits all solutions/international “good”
practice rather than “best” practice
• First-best solutions NOT possible in public
policy/identify “workable” solutions:
RIA: “what” and “why”
•
•
•
Systematic, structured, evidence-based, consultative
analysis of the prospective impacts of a proposed
policy measure against possible alternatives (ex-ante)
“..RIA’s most important contribution to the quality of
decisions is not the precision of the calculations used, but
the action of analyzing – questioning, understanding
real-world impacts and exploring assumptions..” (OECD,
2002)
NOT an end in itself; process matters (demonstration
effects)
RIA: “what” and “why”
•
Sub-set of regulatory policy: effectiveness,
transparency/accountability, proportionality,
consistency, legitimacy – facilitating better
governance structures and processes
•
Two inter-linked elements: RIA process and RIA
document
RIA: “what” and “why”
Fits policy
cycle
Stakeholder
buy-in &
engagement
Public
consultation
Consistent
analytical
method
Iterative
process
RIA: policy context
Policy
identification
Policy
evaluation
Policy
Space
Policy
implementation
Policy
formulation
RIA: policy context
Setting
agenda
Enforcement
Ex-post
evaluation
Ex-ante
appraisal
Monitoring
Drafting
rule/
Monitoring
Implementation
Final impact
assessment
Implementation
regulation
RIA: incidence OECD (formal)
RIA: emerging/developing economies
• Africa: e.g. Botswana, Egypt, Ghana, Nigeria,
Tanzania (pilot projects to implement RIA); Uganda
(RIA training, 2000-2003); Kenya (RIA proposals,
2007); South Africa (approved by Cabinet,2007/RIA
Guidelines available from 2012)
• Latin America: e.g. Brazil, Chile, Columbia, Costa
Rica, Ecuador (trying to introduce a more
systematic use of RIA)
RIA: emerging/developing economies
• Europe & Central Asia: e.g. Bulgaria (think-tank
initiative IME (1998-2002); Moldova (2008); Montenegro
(RIA manual, 2011); Serbia (2004); Ukraine (2004);
Uzbekistan (adoption of government decree on RIA, 2014)
• Asia: e.g. Cambodia, Lao PDR, Malaysia, Mongolia,
Philippines, Vietnam (piloting RIA); Indonesia (via ADB
project in Min of Trade,2002 & TAF training for LG)
•
SOUTH ASIA?
RIA: unpacking the international narrative
• Developing countries: empirical evidence sparse,
patchy
• Why?
-Other regulatory policy options for regulatory review?
-Done but not documented (or informal)?
-Done but not sustainably embedded (e.g. add-on to
satisfy donor conditionality/not in sync with policy
cycle, etc. )?
• GAP in research
RIA: unpacking the international narrative
•
•
•
Knowledge gaps on RIA/alternatives to regulatory review
in emerging/developing economies (based on review of
existing literature)
Important research questions digging deeper into what
has/has not worked and why (political-economy and sociocultural context); extent/limits of policy
transfer/reinventing the wheel; specific stakeholder-level
impact of regulatory review; positive & normative
usefulness of RIA, etc.
Case for meaningful in-depth research program: recall
CUTS 7-Up Project on competition policy and law
(empirical research, wide stakeholder consultation
process, policy buy-in)
RIA: issues and challenges
•
•
Expected outcome (assumption): RIA driver of regulatory
quality/better regulatory structures & processes for
society as a whole
These findings need to be tested/fine-tuned with more
empirical research in emerging/developing economies
RIA: issues and challenges
 Process
•
•




Cohesive, systematic regulatory policy (within which RIA is
to be embedded); clear regulatory policy
objectives/principles/expected outcomes
Policy buy-in
Political (highest levels of government)
Administrative (bureaucrats) – sync with principal-agent dynamics
Technocrats – often most resistant/ideology-driven interests
Civil society (private sector, consumers, etc.) – regulatory capture,
rent-seeking, policy embedding/sustainability
RIA: issues and challenges
 Process
• Institutional arrangements
 One apex organization tasked with overseeing the different
stages (and sectors) of RIA; coordinating
roles/responsibilities of the various technical and
administrative actors in the process; quality-control;
training; advocacy; and, problem-shooting
 Best placed in an entity close to core Executive body of
government
RIA: issues and challenges
 Process
• Skills and financial resources
 Technical know-how (nuts and bolts of RIA method)
 “Knowledge” (political-economic, socio-cultural costs/benefits and
outcomes) – country expertise over donor information transfer
 Adequate remuneration: “you pay peanuts, you get monkeys”!!
• Access to information (e.g. RTI Bill in #LK) – transparency,
accountability, credibility, legitimacy – broader stakeholder
buy-in
RIA: issues and challenges
 Methodology
• Asking the right questions
 Scope: primary or secondary legislation?
 Scope: all regulations across the board or major ones (define major?)?
• Choice of methodology




Least-cost analysis
Cost-effectiveness analysis
Cost-benefit analysis
Multi-criteria analysis
• Some sticky issues
 Monetizing non-market impacts (revealed preference? ability to pay
versus willingness to pay? bounded rationality?)
 Mixing RIA in to long-term policy goals (e.g. quality of life)
RIA: peeling off the layers- #LK story
• Introspective: looking back at mistakes (2004-2005)
• What: “..process used to assess the likely consequences of proposed
regulation, and the actual consequences of existing regulation, to assist
those engaged in planning, approving and implementing improvements
to regulatory systems..”
• Why:
 Objectives of a social market economy; market failure; effective,
workable regulatory policy/institutional structures and processes
 Embedded objectives of good governance: transparency,
accountability, consistency, participation
RIA: peeling off the layers- #LK story
• How:
 Incremental approach to implementation: short-term (setting up RIA
Unit, drawing up RIA Guidelines, RIA pilots, etc.); medium-long term
(expand scope to require at least a partial RIA for all new regulation;
enshrine RIA in an Act of Parliament)
 RIA Unit – focal point for RIA process; located within President’s
Office/Cabinet Office/Ministry of Finance; “lean” entity (outsourcing);
sunset entity?; facilitate training
 Scope: Central, Provincial and Local Government legislation; screen
regulations w.r.t impacts (identify key stakeholders
affected/numbers, identify positive/negative impacts on each key
stakeholder group, score low-medium-high, when one/more impacts
rated “high” or two/more impacts rated “medium” do an RIA
 Public consultation
RIA: peeling off the layers- #LK story
• What we did: Concept paper (rather than a White Paper/Action





Plan)
Formed an informal working group (IPS, AG’s Dept, NGO, Private
Sector, Media)
Resulted from 2-day RIA “concept/practice” advocacy workshop in
#LK (funded by CRC) – attended by policy makers/other key
stakeholders (significant press coverage on #LK regulatory
challenges)
Set out “good” practices
Developed consultatively (interim version published for comments in
media, roundtable discussion on interim version)
Presented to Minister of Finance
RIA: peeling off the layers- #LK story
• Outcome: not implemented
• Why?
 No policy buy-in (policy rhetoric vs. policy action)
 Conceptual/technical knowhow (local & international) : 
 No cohesive regulatory policy to begin with (story of CP)
 Not sufficiently linked to formal policy making body from inception
(assumed that IPS link to Ministry of Finance necessary/sufficient
condition; should have had Ministry reps in Working Group)
 Resistance from regulators (should have brought regulator
representatives into the Working Group)
 Perceived as an “academic” group (despite composition of Working
Group)
RIA in practice: key takeaways
• Is RIA useful? Depends….(caveats, policy context); need
for more empirical foundation in developing economies
• Developing country narrative: very much work-inprogress (“helicopter” view…)
RIA in practice: key takeaways
•
•
•
Solid understanding of policy context (political-economy, sociocultural) and dynamics of policy cycle: e.g. is there a cohesive
regulatory policy structure/processes (regulatory “culture”)?; is there a
“political” window of opportunity?; principal-agent dynamics/diverging
incentives of politicians and bureaucrats; other regulatory review practices
(formal/informal)
Solid understanding of stakeholder interests/vested interests: e.g.
sector-specific public policy dynamics; rent-seeking opportunities that will
be affected by RIA; civil society “voice” /champions of reform
process/culture of right to information/transparency (general governance
culture)
Financial and technical resource/capacity constraints (RIA Light –
World Bank, 2009) : incremental approach? small/core trained
technical group? external funding at the inception? extent/limits of
reinventing the wheel?
RIA in practice: some possible discussion questions
•
Ex-post RIA (for existing legislation)? Goes with incremental
approach/ data and information relatively easier to access/
demonstration effects from regulation IN EFFECT (versus potential)?
•
RIA by law or government policy? (possibly frequent challenges in
courts versus policy changes with political changes?)
•
Does RIA have to be a specific/separate document or can RIA
language be embedded in existing/forthcoming legislation (#LK
PUSCL language that provisions have to be considered in terms of
costs/benefits to main stakeholders)?
Thank you