1. Taipei – 28 August 2012 Regulatory Policies in support of National Competitiveness Lessons from around the world Charles-Henri Montin, Senior Regulatory Expert, Ministry of economy, finance and industry, Paris, France Delegate of France to RPC http://smartregulation.net

2. Contents  How regulatory reform can contribute to competitiveness  Varieties of regulatory reform experience (one faith, many chapels)  How can Chinese Taipei tap the competitiveness potential of regulatory reform CH MONTIN,Taipei, 28 August 2012

3. Part one: How regulatory reform can support competitiveness Approaches to competitiveness Regulation in society and the economy What is quality regulation? Measuring competitiveness

4. Drivers or competitiveness NC Stable environment Quality infrastructure Efficient competition Cluster development Corporate sophistication CH MONTIN,Taipei, 28 August 2012

5. How can governments nurture competitiveness?  Establish a stable and predictable macroeconomic, political, and legal environment  Improve the availability, quality, and efficiency of general purpose inputs, infrastructure, and institutions  Set overall rules and incentives governing competition that encourage productivity growth  (cluster development)  (process of economic change ) CH MONTIN,Taipei, 28 August 2012

6. The main areas of regulation in support of competitiveness Reduce costs of doing business Provide well- run public services Provide stable background Preserve efficient market operation Market rulesInstitutions Business environment infrastructure CH MONTIN,Taipei, 28 August 2012

7. What is quality regulation?  Regulation: written rules that mandate behavior, in pursuit of policy objectives  Regulation, “one of three key levers of state power, with fiscal and monetary policy” (OECD) CH MONTIN,Taipei, 28 August 2012  Necessary  Clear/ accepted  Light (costs)  Well targeted  Stable  Proportional  Well applied

8.  Lack of coordination and planning capacities  Vested interests may block reform; political incentives favour short term interests over long term societal policy goals  Rapidly changing environments (obsolescence)  Too many levels of government: duplicative or excessive reg. (e.g. gold-plating of EU law)  Over-reliance on regulation, regardless of cost and alternatives  Risk aversion, poor risk management in reg. Challenges to Delivering High Quality Regulation CH MONTIN,Taipei, 28 August 2012

9. Economic impact of good regulation  Regulatory Reform can yield 5 -11% of extra GDP  (impact of reform of Product market regulation, Employment protection legislation reform and benefit, tax and retirement systems  See 2011 working paperworking paper http://www.oecd-ilibrary.org/economics/raising-potential-growth-after-the- crisis_5kgk9qj18s8n-en CH MONTIN,Taipei, 28 August 2012

10. Part 2 Varieties of regulatory reform The growth and control of regulation The three ages of regulatory quality International and national approaches

11. From regulation to better regulation From Jacobs & Associates CH MONTIN,Taipei, 28 August 2012

12.  Early sets of principles –OECD 1995-97: 7 recommendations to governments –UK 1998: 5 principles transparency, accountability, targeting, consistency, proportionality  Maturity –Mandelkern report (EU) (2001): six dimensions –OECD “performance” 2005 : Broad programmes, impacts, transparency, competitiveness test, liberalisation, policy linkages  Current trends –National sets: Australia (2007) “best practice regulation,” Ireland, Finland… –OECD review of 2005 principles (2012): post-crisis adaptations The search for “Principles” of regulatory quality CH MONTIN,Taipei, 28 August 2012

13. 2012 OECD Recommendation on Regulatory Policy and Governance (1)  Adopt explicit policy for regulatory quality.  Apply open government, consultation  Oversee procedures and goals of regulation to foster quality.  Integrate RIA into the early stages of the policy process  Review stock of significant regulations against policy goals, to ensure that they remain effective, up to date, cost justified, cost effective and consistent.  Reports on the performance of regulatory policy and reform programmes

14. 2012 Recommendation on Regulatory Policy and Governance (2)  Supervise regulatory agencies  Provide review mechanism accessible to citizens and businesses at reasonable cost. Timely decisions.  Risk-based design and implementation of regulations. Responsive implementation and enforcement strategies.  Co-ordination mechanisms between levels of government to promote coherence of regulations.  Develop regulatory management capacities at sub- national levels of government.  Give consideration to all relevant international standards and frameworks for co-operation CH MONTIN,Taipei, 28 August 2012

15. Regulatory management  Command & Control Due process Consistent legally Accessible Inform stakeholders Regulatory Reform (1995) Effective Efficient Competitive Consult stakeholders Regulatory governance (2010) Integrated objectives Cycle approach Incl. M&E Involve stakeholders BR ≠ Deregulation BR = dynamic LT process acting on policies, institutions and tools The three ages of regulatory quality GOODBETTERSMART CH MONTIN,Taipei, 28 August 2012

16. One objective, three approaches OECD Regulatory policy Think tank Best practice forum Market orientation Public management European Union Better/Smart Regulation Supranational Manage ‘Acquis communautaire’ Subsidiarity Transposition Process-oriented Inter-institutional World Bank Group Business climate Doing Business (outcomes) Development technical assistance One stop shops Licensing Reg. guillotine CH MONTIN,Taipei, 28 August 2012

17. Thematic work  Institutions for regulatory oversight  Building capacities and introducing tools  Preventing regulatory capture  Ensuring policy sustainability  Contributing to green growth  Addressing risk in regulation making  Coordinating multi-level regulation  International regulatory co-operation CH MONTIN,Taipei, 28 August 2012

18. Policy issues for government action Develop policy roadmap - choose the policy instrument(s) Develop policy roadmap - choose the policy instrument(s) Design new regulation Check current regulation Design new regulation Check current regulation Enforce regulation Monitor and evaluate performance of regulation REGULATION OTHER POLICY TOOLS The 4 Cs Consultation Co-ordination Co-operation Communication ‘Regulatory Governance Cycle’ CH MONTIN,Taipei, 28 August 2012

19. European Better Regulation Mandelkern Predominantly legal Simplification Consultation standards 2002 Barroso I (2005) VP Verheugen Competitiveness test Admin Burden Reduction Progr. 2007-12 SME test Stoiber Group Barroso II (2010) Smart Regulation Fitness checks Cycle approach Integration of evaluation, infringements, complaints CH MONTIN,Taipei, 28 August 2012

20. Better Regulatory Design (Mandelkern) Consultation Access Alternatives RIA Admin burdens Simplification STOCK Stakeholders The Economy The Administration + Tools for ensure efficient implementation (including information, government forms, BPR, OSS, inspections) FLOW The economy CH MONTIN,Taipei, 28 August 2012

21.  Increase social welfare through more effective social and economic policies  Boost economic development by encouraging market entry and competitiveness  Control regulatory costs and improve productive efficiency, particularly for SMEs  Improve the rule of law, transparency and participative democracy Goals of Regulatory Reform CH MONTIN,Taipei, 28 August 2012

22. Dimensions of the business environment Administrative“One stop shop”, single window, inspections, licensing, standardized forms and corporate documents LegalCommercial code, company law, collateral law, bankruptcy, labor law, infrastructure laws, PPP JudicialCourt procedure, case management, performance of judges Electronic services (eGov) Company/collateral registry, Credit bureau, Electronic signature, single ID, Paying taxes, Legal portal Tax and Subsidies Corporate tax, VAT, social contribution, registration duties, selective interventions CH MONTIN,Taipei, 28 August 2012

23. How to present regulatory reform? Deregulation, Reducing regulation Korea, Taiwan, UK (2011), NZ Improving business climate, reducing administrative burdens Australia, Netherlands, Belgium, Singapore Better Regulation UK, European Union, Ireland Fighting bureaucracy Germany Administrative simplification France, Italy, Portugal, Viet Nam Regulatory reform OECD, World Bank, US, ¨PR China, Poland, Netherlands, Thailand CH MONTIN,Taipei, 28 August 2012

24. Country best practices Transparency and open government Denmark, Finland, Norway, US Quantifying regulatory costs Australia, NL, UK, US Multilevel governance Italy, Mexico Simplification, one-stop-shop Austria, Belgium, Mexico Independent advisory bodies Germany, NL, UK, Sweden CH MONTIN,Taipei, 28 August 2012

25. Part 3 Options for Chinese Taipei Impressive competitiveness results But other economies are pursuing RR Chinese Taipei must reform its regulatory implicit policies andpractices

26. Taiwan in the GCI CH MONTIN,Taipei, 28 August 2012

27. Taiwan in the GCI 2011- 2012 CH MONTIN,Taipei, 28 August 2012

28. Comment from GCI Taiwan, China remains stable in 13th position, profile nearly unchanged Consistent performance across the pillars of the GCI,  Assets –innovation (9th) –quality and presence of business clusters in high-end manufacturing, first-class R&D, –excellent educational system, –high level of technological readiness (24th) and well-developed infrastructure, with the exception of air transport (51st).  Weaknesses: –rigidity of labor rules (118th, deteriorating) causes inefficiency of market (33rd), – public and private institutions (31st), but improving. CH MONTIN,Taipei, 28 August 2012

29. Doing Business approach. Taiwan, China OVERALL RANKING (2012): 25 CH MONTIN,Taipei, 28 August 2012

30. Taiwan’s comparative position CH MONTIN,Taipei, 28 August 2012

31. Taiwan’s comparative position (DB) 20122011 Hong Kong22 Taiwan, China2524 China9187 CH MONTIN,Taipei, 28 August 2012

32. Taiwan’s assets in global competition  Highly innovative  Strong intellectual property protection  Entrepreneurial  Flexible business culture reacts rapidly  Large pool of researchers  Strong science and technology education, research institutions  Some deep technology clusters in closely related industries  Logistics strengthened In past 10 years  Strong outbound FDI  Gateway to China: strongest democracy, freedom of speech of any Chinese-speaking BUT … CH MONTIN,Taipei, 28 August 2012

33. Problematic factors of doing business CH MONTIN,Taipei, 28 August 2012

34. Further reasons to engage in RR  Risks affecting all economies –Ever more complex policies (green growth, climate, etc –Fierce competition (need to keep pace) –Impact of the crises (stress test of governance)  Opportunities –Regulation: the most promising remaining factor –The least expensive reform (leverage effect –APEC cooperation and mutual expertise –OECD-APEC dialogue CH MONTIN,Taipei, 28 August 2012

35. A menu for launching regulatory reform Review current policies and practices Adopt regulatory policy (statement) Appetizers Set up/ strengthen institutions Develop capacities (priority: RIA) Starters Launch review of existing law Implement tools: RIA, and others Mains Monitor and report progress Communicate to sustain reform Desserts CH MONTIN,Taipei, 28 August 2012

36. CountryMost original objective or contentNotable Institutions or tools US Regulatory Reform *Regulatory review, CBA, *challenge function OIRA Executive Order UK Reducing Regulation *Principles; Policy statement, *RIA, *one-in one-outPrinciplesPolicy statementone-in one-out *local delivery; consultation BRE BRDO Canada Smart Regulation *Multi-level coordination, international dialogue Treasury Board France Qualité du droit *Quality legal drafting; curbing overproduction of norms, SME policy;Quality legal drafting Conseil d’Etat Legifrance Germany Reducing bureaucracy Reduction of *regulatory costsregulatory costsNormenkontrollrat Netherlands Regulatory reform *Reduction of administrative burdens, e-companyReduction of administrative burdens ACTAL Belgium Human Rules *Small scale solutions to practical problems

37. CH MONTIN,Taipei, 28 August 2012 AustraliaBest practice regulation *Deregulation PolicyDeregulation PolicyProductivity Commission Russian Federation Regulatory ReformRIABR Council (tbc) MexicoRegulatory ReformRed Tape, sub-national BRsub-national BRCOFEMER Taiwan, China Regulatory ReformNational competitiveness, *Doing Business ranking EUBetter Regulation (2002) Smart Regulation Smart Regulation (2010) *RIA, Streamlining acquis communautaire, cutting red tape, *consultation, *ex post evaluation (2010)cutting red tapeconsultation IABIAB, Stoiber GroupStoiber Group OECDRegulatory Governance Reviews of national capacities Recommendation for regulatory policy World BankRegulatory ReformImproving business and investment climate investment climate Doing Business report

38. To continue the study…  This presentation is online http://montin.com/documents/taipei2012.ppsx  Updates on current events and trends: http://smartregulation.net  Contact: montin @ smartregulation.net charles-henri.montin @ finances.gouv.fr CH MONTIN,Taipei, 28 August 2012