1 Regulatory reform, transparency and development Athens development and governance institute 21 November 2005

2 Regulatory challenges and decentralization: Multilevel regulatory governance Josef Konvitz Head, Division of Regulatory Policy OECD, Paris

3 Multi-level regulatory governance: Why now? Pressures of globalisation and market openness Development of regions in an EU framework; subsidiarity to strengthen democracy Fiscal constraints on central government; better targeting of what government does Expectations of citizens and businesses for better public services and transparency

4 Public-Private Interface Local-regional government is often the highest level people see; Attaining public service goals: Quality versus economic and electoral cycles –Health –Environment –Education

5 What are the main issues for national government? How regulation at the regional/ local level affects national policy objectives Promoting competition and investment that generate jobs Resolving policy conflicts Weak enforcement and compliance Reducing the gap between what is specified in law, and actual practice

6 What are the main issues for regional and municipal governments? Lack of clarity in definitions of roles and responsibilities Unfunded mandates Managing populist pressures Capacity and flexibility for experimentation and priority setting

7 What are the main regulatory issues and challenges for businesses and citizens at the sub-national level? Delays, complexity and capacity Not knowing who decides what, and at what level Planning and land use: Who can build what, where and when? Permits for business operations Compliance and inspections

8 Sticky sectors: –Housing and construction –Food production and sales –Financial services such as banks and insurance –Big retail versus small retail outlets

9 How can regions innovate to reduce administrative burdens? E-government procedures Cutting red tape (Mexico’s SARE programme) Consultation and dialogue at the regional level Better inter-regional co-operation Targeting obsolete regulations, or regulations that are an impediment to business (Japan’s special zones) Coping with risk (France’s PPR or natural risk prevention plans)

10 Lessons from the Athens Olympic Games Transforming power of a big idea Impact of external pressure Revise public procurement procedures Law on risk Challenge: how to develop infrastructure more efficiently while making the system more transparent and consultative

11 How well-prepared are regions and municipalities to implement national and EU legislation? What are their most present shortcomings? Tools: –Use of regulatory impact analysis (RIA) is too limited –Consultation –Compliance and dispute resolution Policy objectives: –What constitutes success? Failure? –Benchmarking: Processing permits and granting licenses Level of participation in consultation

12 Conclusions Changing the administrative culture is difficult Building regulatory quality is a long-term project Regions can – and must – make regulatory quality a priority State retains central function for regulatory oversight: Implies a whole-of-government strategy, but less direct state intervention