1. by Josef Konvitz Head of OECD Regulatory Policy Division
Regulatory Policies in OECD Countries Benefits, costs, and best practices
by Josef Konvitz
Head of OECD Regulatory Policy Division

2. What are regulatory policies?
Regulatory policies are designed to maximise the efficiency transparency and accountability of regulations based on an integrated rule-making approach and the application of regulatory tools and institutions.

3. Regulatory policies improve the functioning of markets
Boosts consumer benefits
reducing prices for services and products such as electricity, transport, and health care, and by increasing choice and service quality.
Supports sustainable, non-inflationary growth
Improves competitiveness
Reducing the cost structure of exporting and upstream sectors in regional and global markets.
Fosters flexibility and innovation
Increases job creation
by creating new job opportunities, and by doing so reducing fiscal demands on social security, particularly important in ageing populations.
Reduces risk of crisis due to external shocks

4. OECD Regulatory Policy Concept
Regulatory quality is the driving principle behind reform today
Deregulation where markets work better than governments
Re-regulation and new regulatory institutions where markets cannot work without governments
More efficient government and social regulations to achieve high standards of health, safety and environmental protection at lower economic cost
What is regulatory reform for OECD, that is:
not deregulation only
not economic benefits only

5. Main Elements of a Regulatory Policy
What is a ‘good’ regulation?
The 1995 OECD Checklist for Regulatory Quality
The 1997 OECD Recommendations on Regulatory Reform
The 2005 OECD Principles for Regulatory Quality and Performance
Set a Regulatory Policy
Efficiency, transparency & accountability
Assure political support
Institution building
Set a strategy to drive the Policy
Capacity building for
Improving rule-making
Reviewing existing regulations
Implement the Policy

6. The Regulatory Checklist of the OECD 1995 Recommendations
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?

7. Strategies for Assuring Regulatory Quality
I. Building a regulatory management system
Regulate the regulators through transparency and accountability mechanisms (laws, policies, institutions, procedures, enforcement, etc.)
II. Improving the quality of new regulations
Control of the flow (consultation, RIA, alternatives, co-ordination, etc.)
III. Upgrading the quality of existing regulations
Control of the stock (deregulation, up-dating, codification and restatement, administrative simplification)

8. Since 1997
Twenty multidisciplinary country reviews: Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Mexico, Netherlands, Norway, Poland, Spain, Turkey, United Kingdom, United States
Detailed assessments of progress in: regulatory management, competition policy, international market openness, sectoral reforms
Research on the link between regulatory reform and economic performance

9. Progress Visible developments But
Regulatory policy is now on governments’ road map
Rapidly emerging best practices across all fronts
Specific achievements, for example with transparency
Visible development of more competitive markets
But
“Whole of government” approach to high quality regulation not yet achieved
Uneven progress across OECD countries: a growing gap between leaders and the rest
Regulatory reform often still perceived to mean a “one-off” effort on specific issues, rather than a continuous, dynamic process.

10. Regulatory reform and economic performance
Drivers of economic performance and sustained growth: structural reforms are a powerful complement to fiscal and monetary stabilisation
Product market reforms, including regulatory reforms, have a confirmed positive effect
Productivity: countries that have extensively reformed their product markets experienced an acceleration of productivity in the 1990s
Employment: reform can also play an important role in lowering structural employment rates
Regulatory policies that help economic performance and market opening
Reducing barriers to international trade
Promoting domestic competition
Simplifying administrative procedures

11. Lessons of experience
Leadership as most important ingredient for success
Crises as catalyst for change
Harmful effects of a short-term perspective
Role of central regulatory bodies to change administrative culture
Need for communication strategy to build constituency for reform
Getting the level of intervention right

12. Towards the future: interface between the public and private sectors
Management of complexity of policy objectives, with often unexpected outcomes
Greater use of alternatives to regulation
Evaluation of regulations and of their social and economic impacts
Risk awareness
Extending coverage to public services such as education, health, environment

13. Future challenges (1)
Cultural change: needs to be promoted across government
A culture which is fully aware of the importance of good regulation is not yet fully embedded in administrations
Improving the State-citizen relationship is a start, efforts are now needed to improve capacities for effective rule-making
Particular weaknesses are the integration of competition principles, and communication between trade policy and regulatory officials
Evaluation: integrating the lessons of past experiences
Developing a better understanding of the link between regulatory processes and regulatory performance
Learning from failures as well as successes
Further development and integration of best practices
Communication: engaging all stakeholders
Engaging currently marginalised but important stakeholders such as SMEs and foreigners
Dealing with vested interests
Engaging all relevant stakeholders, including the general public

14. Future challenges (2) Putting regulatory policy to work
The current agenda still needs attention
Deregulation of closed and sheltered product and service markets is still needed in many countries
Reforms of the network sectors need to continued, in some cases more vigorously
An emerging challenge: the public sector
The public sector – “regulation within government” and of public services – has been comparatively neglected
The public spending to GDP ratio in the OECD is 40%, so the potential for raising economic performance and social welfare through the application of regulatory quality to this part of the economy is huge
Managing competition in public services is an important area for the “regulatory State”
Public services at the local government level need special attention

15. Conclusions:
Adopt whole-of-government approach; avoid ad-hoc and piecemeal solutions
Adopt philosophy of continual improvements; the benefits of reform wear off
Learn from each other's experience, including failures as well as successes
Change the administrative culture and expectations of citizens