Transcript RIA training Moscow

TOWARDS BETTER REGULATION – CUTTING
BUSINESS RED TAPE IN LITHUANIA
1
Andrea Renda, Senior Research Fellow, CEPS
Vilnius – 7 July 2011
THE EU BETTER REGULATION AGENDA
 Use of ex ante impact assessment since 2003
 Ex ante assessment of economic, social, environmental
impacts of future policy initiatives
 Quality assurance by Impact Assessment Board since 2007
 Ex post evaluation by ECA and external experts
 “Closing the policy cycle” and fitness checks in the future
 Administrative burdens reduction programme
 Launched in February 2007
 Initial “fast-track actions”
 Mixed results so far, both in the EU and Member States
2
IMPACT ASSESSMENT IN MEMBER STATES
Pioneers
United
Kingdom
CEE countries
with RIA
development
Late adopters
Red-tapedominated
Czech Republic,
Estonia,
Hungary,
Poland,
Slovakia,
Slovenia
France, Ireland,
The
Netherlands,
Sweden,
Belgium
(Flanders)
Austria,
Belgium
(Central gov),
Denmark,
Finland,
Germany
Laggards
Bulgaria,
Greece, Italy,
Lithuania,
Latvia,
Luxembourg,
Malta,
Portugal,
Romania, Spain
Cyprus
Recent research projects (ENBR, EVIA, but also OECD EU15) have highlighted a huge
adoption-implementation gap, which seems to be hard to fill in the near future
3
LITHUANIA AND BETTER REGULATION

Impact assessment is in place since 2003, and was recently relaunched (Res. 1244 of 30 Sept 2009). Main lessons are:

Long-term political commitment remains essential

Patchy implementation to date

Persisting lack of skills in public administration

Reference to economic, social, political or “concrete private
interest”: need to assess environmental impacts as well

Lack of a real watchdog with enhanced competences and powers
to trigger a real cultural change

Legislative planning and consultation more important than
widespread use of RIA
4
AB REDUCTION: PARTIAL OVERLAP
Results from the
first round of
the EU
measurement in
13 priority areas
5
Areas covered by
Lithuanian AB
Reduction Programme
SCM: PROBLEMS ON THE WAY…

Once ABs have been measured, RIA is still needed


The SCM does not consider all costs...




Investments (Material costs)
Taxes and charges (Financial costs)
Opportunity costs
...nor does consider benefits!



Impossible to use SCM as a stand-alone tool replacing RIA
“third-party” IOs (e.g. labelling)
Efficiency criteria/welfare analysis
The SCM assumes 100% compliance

This is the most critical flaw in the whole methodology, and must be taken into
due account before drawing any conclusion in the measuremens results
6
Evaluating AB reduction measures
Ex post evaluation of
effectiveness, efficiency,
proportionality, actual
perceived impact and
macroeconomic impact
Annual interim evaluations
of the effectiveness and
efficiency of reduction
proposals
Evaluation of design
and implementation
of the measurement
programme
0
time
Measurement period
Source: Allio and Renda (2011)
Reduction period
Evaluation period
8
9
POLICY RECOMMENDATIONS

Key better regulation dimensions are missing







Legislative planning and public consultation
Improve RIA methodology (include environmental impacts, etc.)
Use the SCM to lay the foundations for RIA
Improve RIA process through a real “watchdog”
Improve consultation and civil society representation
Use indicators for M&E
Avoid “short-termism” (e.g. focus on EODB and SCM)

Align goals with all EU2020 flagship initiatives

Expand SCM at least to financial services and company law

Review the enforcement and inspection regime

Strengthen institutions
10
BEYOND BETTER REGULATION

Digital Agenda v. (draft) 2010-2015 ISD Strategy
Spectrum policy (800MHz band) a key priority
 Broadband for all by 2013 v. 98% by 2015
 ICT development is the first regulatory reform
 Cloud computing strategy + resilience to attract investment


Innovation policy
Away from “modest innovators”: strengthen demand-side
innovation policy, brokering and entrepreneurship
 Make the most of the upcoming flow of EU funds for 2011-2012
and beyond (mediate between EIB and local SMEs)


Competition policy
Weak enforcement: strengthen powers and skills
 Law on the Protection of Unfair Operations by Retail Trade
Undertakings of 2009 is raising concerns in Brussels

11
APPENDIX
12
THE STANDARD COST MODEL
Compliance costs
Direct financial costs
Substantive compliance
costs
Monetary transfers to
public administration
(taxes, duties, etc.)
Modification of
productive process or
output
Administrative costs
13
THE STANDARD COST MODEL
Administrative costs
Business
administration costs
The SCM
measures all
costs from
regulation, but
aims at
reducing only
administrative
burdens…
Administrative costs
from central
government
regulation
Administrative activities
that businesses may
continue if the regulations
were removed
(‘Business as usual’)
Administrative activities
that businesses only
conduct because
regulation requires it, i.e.
administrative burdens
14
CROSS-COUNTRY COMPARISONS (I)
15
CROSS-COUNTRY COMPARISONS (II)
16
CROSS-COUNTRY COMPARISONS (III)
17
18
THE NETHERLANDS: AB MEASUREMENT RESULTS
19
THE NETHERLANDS: REALISED REDUCTIONS
20
DENMARK: MEASUREMENT RESULTS (A)
21
DENMARK: MEASUREMENT RESULTS (B)
22
DENMARK: MEASUREMENT RESULTS (C)
23
UK: MEASUREMENT RESULTS (A)
24
UK: MEASUREMENT RESULTS (B)