OECD Reviews of Regulatory Reform Regulatory Impact

Analysis A Tool for Policy Coherence Oecd

Organisation For Economic Co-Operation And
Development pdf version

https://ebookname.com/product/oecd-reviews-of-regulatory-reform-
regulatory-impact-analysis-a-tool-for-policy-coherence-oecd-
organisation-for-economic-co-operation-and-development/

★★★★★
4.8 out of 5.0 (25 reviews )

PDF Available Immediately

ebookname.com
OECD Reviews of Regulatory Reform Regulatory Impact Analysis
A Tool for Policy Coherence Oecd Organisation For Economic
Co-Operation And Development

EBOOK

Available Formats

■ PDF eBook Study Guide Ebook

EXCLUSIVE 2025 ACADEMIC EDITION – LIMITED RELEASE

Available Instantly Access Library

Instant digital products (PDF, ePub, MOBI) available
Download now and explore formats that suit you...

OECD Reviews of Regulatory Reform Risk and Regulatory

Policy Improving the Governance of Risk Oecd Organisation
For Economic Co-Operation And Development
https://ebookname.com/product/oecd-reviews-of-regulatory-reform-risk-
and-regulatory-policy-improving-the-governance-of-risk-oecd-
organisation-for-economic-co-operation-and-development/
ebookname.com

OECD Rural Policy Reviews OECD Rural Policy Reviews Spain

2009 Oecd Organisation For Economic Co-Operation And
Development
https://ebookname.com/product/oecd-rural-policy-reviews-oecd-rural-
policy-reviews-spain-2009-oecd-organisation-for-economic-co-operation-
and-development/
ebookname.com

OECD Reviews of Innovation Policy Sweden 2016 Edition 2016

Volume 2016 Oecd Organisation For Economic Co-Operation
And Development
https://ebookname.com/product/oecd-reviews-of-innovation-policy-
sweden-2016-edition-2016-volume-2016-oecd-organisation-for-economic-
co-operation-and-development/
ebookname.com

Mayday Asking for Help in Times of Need M Nora Klaver

https://ebookname.com/product/mayday-asking-for-help-in-times-of-need-
m-nora-klaver/

ebookname.com
ACS I Textbook on Cutaneous Aesthetic Surgery 2nd Edition
Mysore Venkataram

https://ebookname.com/product/acs-i-textbook-on-cutaneous-aesthetic-
surgery-2nd-edition-mysore-venkataram/

ebookname.com

Finite sample econometrics First Edition Aman Ullah

https://ebookname.com/product/finite-sample-econometrics-first-
edition-aman-ullah/

ebookname.com

The Measurement of Environmental and Resource Values

Theory and Methods 3rd Edition A. Myrick Freeman Iii

https://ebookname.com/product/the-measurement-of-environmental-and-
resource-values-theory-and-methods-3rd-edition-a-myrick-freeman-iii/

ebookname.com

Advertising the American Dream Making way for Modernity

1920 1940 Roland Marchand

https://ebookname.com/product/advertising-the-american-dream-making-
way-for-modernity-1920-1940-roland-marchand/

ebookname.com

Placing Middle English in Context Irma Taavitsainen

(Editor)

https://ebookname.com/product/placing-middle-english-in-context-irma-
taavitsainen-editor/

ebookname.com
Marine salvage capabilities responding to terrorist
attacks in U S ports actions to improve readiness National
Research Council (U.S.). Committee For Marine Salvage
Response Capability. Workshop
https://ebookname.com/product/marine-salvage-capabilities-responding-
to-terrorist-attacks-in-u-s-ports-actions-to-improve-readiness-
national-research-council-u-s-committee-for-marine-salvage-response-
capability-workshop/
ebookname.com
 _i t Ed
s e iti
o
w
o

n
D Br

y
nl
O

u le
d
EC

ea

se
R
O

e
An r
Le ctu

About OECD Browse_it editions

In a traditional bookshop you can browse the display copies from cover-to-cover, free of charge. Wouldn't it be good to be able to do the same
online? Now you can. OECD's Browse_it editions allow you to browse our books, online, from cover-to-cover. But, just as in a real bookshop where
you can't take or copy pages from the books on display, we've disabled the print and copy functions in our Browse-it editions - they're read-only.
And, just as in a real bookshop, you may choose to buy or borrow from a library some titles you've browsed, so we hope you'll buy or borrow our
books when they meet your needs. Tell us what you think about our Browse-it service, write to us at [email protected].

Buying OECD Publications

You can purchase OECD books and e-books from our Online Bookshop - www.oecd.org/bookshop where, if you purchase printed editions you
can download the e-book edition free of charge. Our books are also available from a network of distributors, click the 'Distributors' button on this
website: www.oecd.org/publications/distributors to find your nearest OECD publications stockist.

OECD Publications in Libraries

You'll find OECD publications in many institutional libraries around the world, especially at universities and in government libraries. Many subscribe
to the OECD's own e-library, SourceOECD. SourceOECD provides online acess to our books, periodicals and statistical databases. If your
institutional library does not yet subscribe to SourceOECD, tell your librarian about our free three-month trial offer. For more details about
SourceOECD visit http://new.SourceOECD.org or email [email protected]. OECD has a network of Depository Libraries in each Member
country where all OECD printed publications are available for consultation - www.oecd.org/deposoitorylibraries for a list.
 D Br
EC o
O
w
s

R
An
e

ea
d
O
nl
Lect

y
_it E d it

u
r
io

e n
se
u le
 e _it E d it
s io
w
OECD Reviews of Regulatory Reform

n
o
D Br

y
nl
O

u le
d
EC

ea

se
R
O

e
r
Regulatory Impact An
Lect
u

Analysis

A TOOL FOR POLICY COHERENCE

 e _it E d it
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
ORGANISATION FOR ECONOMIC CO-OPERATION

R
O
AND DEVELOPMENT

e
r An
c t u
The OECD is a unique forum where the governments of 30 democracies L e together
work to
address the economic, social and environmental challenges of globalisation. The OECD is also at
the forefront of efforts to understand and to help governments respond to new developments and
concerns, such as corporate governance, the information economy and the challenges of an
ageing population. The Organisation provides a setting where governments can compare policy
experiences, seek answers to common problems, identify good practice and work to co-ordinate
domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea,
Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic,
Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of
the European Communities takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and
research on economic, social and environmental issues, as well as the conventions, guidelines and
standards agreed by its members.

This work is published on the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.

Also available in French under the title:

Examens de l’OCDE de la réforme de la réglementation
L’ analyse d’impact de la réglementation
UN OUTIL AU SERVICE DE LA COHÉRENCE DES POLITIQUES

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

© OECD 2009

You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia
products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source
and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for
permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC)
at [email protected] or the Centre français d'exploitation du droit de copie (CFC) at [email protected].
 e _it E d itFOREWORD
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
Foreword

R
O
G

e
overnments face increasing challenges to design regulatory systems which promote and protect
An r
u
Lect
the welfare of citizens. Part of this challenge is to improve the evidence basis for regulatory decision-
making to ensure that regulations are only implemented if they are efficient and effective. Since the
first OECD member countries adopted Regulatory Impact Analysis (RIA) in 1974 as a means of
systematically improving the quality of regulation, growth in its use among members has been
rapid. Currently, nearly all member countries now have regulatory management systems which
require some form of RIA before new regulations are made. However, the implementation of RIA
continues to present complex challenges. Experience of RIA systems is relatively recent for many
OECD countries, RIA systems continue to develop and evolve in their scope and application, and the
results of many reviews of the effectiveness of RIA suggest mixed success with influencing the
quality of individual regulations.
RIA is only one part of a system of regulatory quality management but it is an important one.
If it is done well it can produce significant benefits through improving the design of individual
regulations. Since the publication in 1997 of Regulatory Impact Analysis: Best Practice in OECD
Countries, the OECD has continued to analyse and commission research into methodological issues
and country experiences with the conduct of RIA. This publication builds on and updates previous
work by the OECD. It draws on multidisciplinary discussions held in the context of the OECD
Horizontal Programme on Regulatory Reform held in 2006. It also includes subsequent analytical
work developing both the methodological aspects of RIA, as well as its use for integrating
competition assessment in the process of preparing new regulations. It also includes a specific
contribution as an example of practical application of RIA to a consistent policy issue in multiple
jurisdictions. These studies cover fundamental challenges to the effectiveness of RIA and provide
guidance for resolving these challenges. They will be of use to practitioners concerned with the
conduct of RIA and its application to individual regulations, and to those responsible for
implementing or reviewing the performance of RIA systems.
Each paper contains concrete policy advice on how to improve the design and performance of
RIA systems. The collection of papers in this book is intended to provide valuable, practical guidance on
how to improve the potential of RIA to promote economic welfare through better quality regulation, as
reflected in the OECD 2005 Guiding Principles for Regulatory Quality and Performance.

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 3
ACKNOWLEDGEMENTS
e _it E d it
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
Acknowledgements

R
O
T

e
his publication was prepared and finalised by Gregory Bounds, Policy Analyst, under the direction of
An r
u
Lect
Josef Konvitz, Head of Division, within the Regulatory Policy Division of the OECD. The publication
draws on a set of papers prepared for discussion by the OECD Working Party on Regulatory
Management and Reform, the Group on Regulatory Policy as well as the Working Party on Competition
and Regulation. This work was initially launched and co-ordinated by Stephane Jacobzone, Principal
Administrator, Regulatory Policy Division, in the context of the OECD Horizontal Programme for
Regulatory Reform. The paper “Regulatory Impact Analysis: a Tool for Policy Coherance” was drafted
by Gregory Bounds. The papers on “Determinants of Quality in Regulatory Impact Analysis” and
“Methodological Frameworks for Regulatory Impact Assessment” were drafted by Rex Deighton-Smith,
consultant for the OECD Regulatory Policy Division. Ahmet Korkmaz, policy analyst at the OECD at
that time made valuable contributions to the paper on methodological frameworks for regulatory
impact analysis. The paper on “Integrating Competition Assessment in Regulatory Impact
Assessment” was drafted by Rex Deighton-Smith and Sean Ennis, Principal Administrator, OECD
Competition Policy Division, headed by Bernard Phillips, Head of Division. The paper “Towards Better
Regulation in Corporate Governance: Experience in Implementing Regulatory Impact Assessment” was
drafted by Grant Kirkpatrick, Senior Economist, for the meeting of the OECD Steering Group on
Corporate Governance in November 2007. The report was prepared for publication by Jennifer Stein.

4 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
 e _it ETABLE
d OFitCONTENTS
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
Table of contents

R
O

e
Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
An 8 r
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L . . .c
. . .e
u
..t 9

Chapter 1. Regulatory Impact Analysis: A Tool for Policy Coherence . . . . . . . . . . . . . . . 11

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Widely adopted but practised differently . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Potential issues with the performance of RIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Strategies for long term improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Chapter 2. Determinants of Quality in Regulatory Impact Analysis . . . . . . . . . . . . . . . . . 23

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
RIA processes and methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Authority elements and RIA quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Specific quality assurance mechanisms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Chapter 3. Methodological Frameworks for Regulatory Impact Analysis: Valuation,

Risk and Benefit-Cost Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Threshold questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Basic methodological requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
BCA methodological elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
The role of specific partial analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Risk assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Annex 3.A1. Draft Guidelines on RIA Methodologies. . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Chapter 4. Options for Integrating Competition Assessment into Regulatory

Impact Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
RIA and competition policy analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Conducting competition policy analysis as one element of RIA. . . . . . . . . . . . . . . . . 124

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 5
TABLE OF CONTENTS
e _it E d it
s io
w
Review of major forms of restrictions on competition. . . . . . . . . . . . . . . . . . . . . . . . . 125

n
o
Full competition assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

D Br

y
nl
Which policies merit a full competition assessment? . . . . . . . . . . . . . . . . . . . . . . . . . 143
When should a competition assessment be performed in the policy

u le
development process?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

d
EC
Who drafts and reviews a competition assessment? . . . . . . . . . . . . . . . . . . . . . . . . . . 144

ea
Giving policy makers incentives to prepare an appropriate assessment? . . . . . . . . 145

se
R
What resources are required for competition assessment? . . . . . . . . . . . . . . . . . . . . 146

O
Integrating the outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

e
An
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 r
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L . . .c
. . .e
tu
. . 147
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

Chapter 5. Applying RIA to Policy Making in the Area of Corporate Governance . . . . . 149
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Clarifying the policy questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Experience with ex ante regulatory impact assessment . . . . . . . . . . . . . . . . . . . . . . . 155
Case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Ex post regulatory impact assessments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Content test: UK operating and financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Ex post consultations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Econometric studies: Selected examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Boxes
2.1. The RIA challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2. Valuation of a statistical life: Human capital and willingness to pay
methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.1. Updating references to guidance documents analysed . . . . . . . . . . . . . . . . . . . . . . . . 65
3.2. Conceptual approach to the discount rate in France . . . . . . . . . . . . . . . . . . . . . . . . . . 88
3.3. Systematic bias?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
4.1. Competition Checklist for the conduct of competition assessments . . . . . . . . . . . . 125
4.2. Australian national competition policy reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
5.1. The widening analytical scope of RIA: Potential problems . . . . . . . . . . . . . . . . . . . . . 162
5.2. Assessment questions posed by the SEC in implementing Section 404 . . . . . . . . . . 174

Tables
3.1. Recommended real discount rates (UK Green Book) . . . . . . . . . . . . . . . . . . . . . . . . . . 91
3.2. Recommended real discount rates (Weitzman, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . 91
3.3. Specific partial impacts explicitly required to be assessed in RIA
(where relevant) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
5.1. Qualitatively rating an individual impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
5.2. Classifying types of detriment to consumers and potential benefits
of regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
5.3. Illustration of indirect measurement of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

6 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
Visit https://ebookname.com today to explore
a vast collection of ebooks across various
genres, available in popular formats like
PDF, EPUB, and MOBI, fully compatible with
all devices. Enjoy a seamless reading
experience and effortlessly download high-
quality materials in just a few simple steps.
Plus, don’t miss out on exciting offers that
let you access a wealth of knowledge at the
best prices!
 e _it ETABLE
d OFitCONTENTS
s io
5.4.
w
Summary of costs by option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

n
o
5.5. Impact of changes to directors’ care and auditors’ role on audit review costs . . . . . . . 161

D Br

y
nl
5.6. Qualitative assessment of costs and benefits: Prospectus for rights issues . . . . . . . 163
5.7. National Audit Office evaluation of the OFR impact assessment: Criteria . . . . . . . . 171

u le
d
EC
Figures

ea

se
1.1. Trend in RIA adoption across OECD countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

R
O
1.2. Regulatory Impact Analysis: Requirement for RIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.3. The requirement to measure specific impacts in RIA . . . . . . . . . . . . . . . . . . . . . . . . . 16

e
An r
u
Lect

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 7
ACRONYMS
e _it E d it
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
ACRONYMS

R
O

e
BCA Benefit-Cost Analysis An r
u
BRC Better Regulation Commission Lect
BTRE Bureau of Transport and Regional Economics
CBS Central Bureau of Statistics
CEA Cost Effectiveness Analysis
CGE Computable-General-Equilibrium
DfT Department for Transport
EVA Economic Value Added
FD Fair Disclosure
FSA Financial Services Authority
GDP Gross Domestic Product
HSE Health and Safety Executive
MCA Multi-Criteria Analysis
MFA Market failure analysis
MSN Major shareholding notifications
NAO National Audit Office
NCP National Competition Policy
NPV Net Present Value
OBPR Office of Best Practice Regulation
OFR Operating and Financial Review
OFT Office of Fair Trading
OHSA Occupational Health and Safety Authority
OMB Office of Management and Budget
ORR Office of Regulation Review
PDV Present discounted value
RAS Risk Across Sectors
Reg FD Regulation Fair Disclosure
RIA Regulatory Impact Analysis
SAB Science Advisory Board
SEC Securities and Exchange Commission
VSL Valuation of a Statistical Life

8 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
 E d SUMMARY
_it EXECUTIVE
s e iti
o
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
Executive Summary

R
O

e
An r
u
This publication brings together recent research and analysis on important factors
influencing the sucessful conduct of Regulatory Impact Analysis (RIA). It includes papers
Lect
on relevant RIA topics covering methodological issues and country experiences, including;
systemic factors which influence the quality of RIA, methodological frameworks which can
assist RIA to improve regulation, guidance on using RIA to avoid unnecessary regulation of
competitive markets and a review of the use of RIA in the regulation of corporate
governance across a number of OECD countries. Taken together, this publication provides
valuable, practical guidance on how to improve the performance of RIA systems to improve
policy coherence and promote economic welfare through better quality regulation. It will
be of use for countries with an interest in enhancing or refining the use of RIA and
evaluating where a bigger investment of public resources in improvements to RIA may be
of most benefit.
Chapter 1 discusses the use of RIA as an instrument to promote coherence in
regulatory policy. The use of RIA has particular prominence in OECD countries as a
systemic mechanism for assessing that the estimated benefits of proposed regulation
exceed the estimated costs. The OECD has been a long-standing advocate of the use of RIA,
recommending in 1997 that governments “integrate regulatory impact analysis into the
development, review, and reform of regulations.” The 2005 Guiding Principles for Regulatory
Quality and Performance reinforced the benefits of RIA. In the context of increasing policy
complexity, robust evidence-based policy mechanisms that are integrated in governance
processes are important for maximising the welfare benefits of regulatory policy and
minimising costs.
One of the fundamental challenges for RIA systems is ensuring that the analysis is
undertaken at the inception of policy proposals, when there is an opportunity and interest
in identifying the optimal approach and alternatives to regulation can be given serious
consideration. How broadly RIA is applied will also influence its capacity to affect the
quality of regulatory proposals. The application of RIA to regulatory instruments should be
optimised to promote the best policy outcomes. Taking a proportionate approach is
recommended so that the resources required by RIA are applied to those regulations likely
to have the most significant impact.
Chapter 2 discusses how a focus on factors of institutional design can improve the
quality of RIA. The implementation of RIA across OECD is a long-term endeavour and the
experiences of OECD countries provide insights into ways of improving the overall quality
of RIA. Important systemic factors that are likely to be influential in determining the
quality of regulatory impact analysis are: the design of RIA processes and methodologies;
the level of formal authority and political support given to the RIA process; and the

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 9
EXECUTIVE SUMMARY
e _it E d it
s io
w
incorporation of specific quality assurance and oversight mechanisms in government to

n
o
ensure that it is being performed effectively.

D Br

y
nl
Chapter 3 examines the methodological frameworks for RIA. Undertaking RIA is a

O
technically challenging exercise. Improving the methodological guidance available to

u le
practitioners can have a substantial impact on the quality of RIA and consequently, its

d
EC
ability to contribute to better regulation. This chapter surveys the guidance that is available

ea

se
to RIA practitioners and provides a reference on key topics that jurisdictions can adapt to

R
O
assess and improve the quality of their own guidance material, or to commence drafting
guidance material for use by policy analysts.

e
An r
u
Lect
Chapter 4 is adapted from the 2007 OECD Competition Assessment Toolkit, and provides
guidance on how to conduct a competition assessment on possible regulatory approaches.
This chapter illustrates how even a relatively small investment of public sector resources
in the removal of unnecessary restrictions on competition in regulation can have
significant welfare improvements if it is done systematically. It also provides guidance on
how to get maximum value by integrating competition assessment processes within the
regulatory policy cycle.
Chapter 5 examines the use of RIA in corporate governance regulation by financial
services regulators to strengthen their evidence-based policy-making. It is useful for policy
practitioners to understand how to undertake RIA in their own field of policy interest, and
to consider comparative examples of how analysts in other regulatory sectors go about it.
The chapter draws on examples from OECD experience notably: Canada, Australia, the UK,
US and the EU. It looks at how regulators have dealt with some of the challenges to
effective RIA which include: defining the problem, undertaking effective consultation, and
identifying and measuring costs and benefits. This paper makes an important contribution
to this underdeveloped area of study for corporate governance and sets out an approach that
could potentially be applied to the analysis of RIA experience in other regulatory fields.
Good governance processes are important to manage policy complexity and to assist
governments to support an administrative culture that is well equipped to consider the
consequences of policy options and to promote the economic, environmental and social
welfare goals that serve the interests of citizens. The material in this publication can assist
countries to improve their governance arrangements for promoting policy coherence
through the incorporation of and refinements to systems for regulatory impact analysis
producing more efficient regulation and delivering better regulatory outcomes.

10 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
 e _it E d it
ISBN 978-92-64-04354-1
Regulatory Impact Analysis: s io
A Tool for Policy Coherence w

n
o
© OECD 2009

D Br

y
nl
O

u le
d
EC

ea

se
Chapter 1

R
O

e
An r
u
Lect

Regulatory Impact Analysis:

A Tool for Policy Coherence

Chapter 1 discusses the potential for governments to improve the evidence basis
for policy and promote coherence through the systematic integration of RIA in the
policy process. It outlines some of the issues affecting the performance of RIA and
opportunities for identifying improvements with reference to the chapters of this
publication.

11
1. REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE
e _it E d it
s io
w

n
o
D Br

y
nl
O

u le
d
EC

ea

se
Introduction

R
O
In principle better decision-making processes should lead to better policy decisions.

e
Policy decisions are by nature challenging, requiring a careful balance of the public interest
An r
u
Lect
which is not easy to determine. The rapid rate of technological development, global
interconnectedness and increasing reliance on private capital to drive economic development
all contribute to make the identification of public interests ever more complex. In the face of
complexity, elected officials cannot abdicate their responsibility for making policy
decisions to analysts. But, if governments are going to produce coherent and effective
policies, it is increasingly important that political decision makers have the best advice and
evidence available.
The quality of the advice provided depends largely on having robust analytical
processes that are integrated with the policy making apparatus and capable of
communicating information to decision makers at the time when it can have a positive
influence. In political systems which rely on the exercise of delegated powers it is
reasonable for citizens to expect that policy decisions take into account a prior
consideration of the anticipated impacts, and are informed by the views of stakeholders
that are likely to be affected by these decisions.
Regulatory Impact Analysis (RIA)1 aims to be both a tool and a decision process for
informing political decision makers on whether and how to regulate to achieve public
policy goals. As a tool supporting decision making, RIA systematically examines the
potential impacts of government actions by asking questions about the costs and benefits;
how effective will the action be achieving its policy goals and; whether there are superior
alternative approaches available to governments. As a decision process, RIA is integrated
with systems for consultation, policy development and rule making within government in
order to communicate information ex ante about the expected effects of regulatory
proposals at a time and in a form that can be used by decision makers, and also ex post to
assist governments to evaluate existing regulations.
The OECD is a long-standing advocate of the adoption of RIA by governments to ensure
that regulation achieves its objectives effectively and efficiently in a changing world.
The 1995 Recommendation of the Council of the OECD on Improving the Quality of Government
Regulation promotes benefit-cost analysis of regulatory proposals and feasible alternatives to
justify government action. In 1997 the OECD produced the volume Regulatory Impact Analysis:
Best Practices in OECD Countries. The 2002 OECD report, Regulatory Policies in OECD Countries:
From Interventionism to Regulatory Governance, identified many of the challenges for
governments in implementing RIA noting that it is a long-term goal that “must involve the
progressive development and dissemination of specific expertise, the refinement of
implementation and control mechanisms and the achievement of change in administrative
culture” (OECD, 2002, p. 51).
The updated 2005 OECD Guiding Principles for Regulatory Quality explicitly supports the
integration of RIA in “the development, review and revision of significant regulation.”

12 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
 1.
e _it E d it
REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE
s io
The 2007 OECD Competition Assessment Toolkit is predicated on the integration of
w

n
o
competition assessment in RIA as a way of improving both competition assessment and

D Br

y
nl
RIA processes (OECD, 2007, p. 24 and OECD, 2008). The OECD has continued to collect
experiences from members through dedicated research on the topic and also through the

u le
conduct of country studies to examine the experiences of members in promoting

d
EC
regulatory governance. This publication continues that tradition to disseminate the

ea
analysis of the OECD on how to improve the conduct of RIA.

se
R
O
The 1997 OECD publication on Regulatory Impact Analysis: Best Practices in OECD
Countries, drew attention to the differences that were offered by RIA as a rational policy

e
An r
tu
model from other models used to develop policy in governments. As an evidence-based
L e cbased
method, RIA can be distinguished from other policy methods for reaching decisions
on the advice of trusted experts, consensus among stakeholders, partisan political position
or the adoption of regulatory approaches in place in other jurisdictions. Of course the
reality of policy development means that these and other decision methods will continue
to be influential in policy design. Policy development is not necessarily linear and rational
and the design and implementation of policy is influenced by many factors relating to the
local cultural and administrative traditions and political processes.
Looking across the OECD, much has changed since 1997. As a governance process RIA
now forms a core component of the regulatory management strategy of all governments
throughout the OECD. As an integrated systemic procedure, it has become one of the most
widely used processes for improving the quality of regulatory decision-making. The
widespread adoption of RIA increases the need for information on how to improve the
design of systems for undertaking RIA. A number of countries have built up many years of
practical experience with the operation of RIA while others are still in the early stages of
implementing their RIA systems. Country approaches to RIA systems are diverse. The
papers reproduced here draw on the recent experiences of countries with methodological
issues and system design, with the aim of synthesising important lessons.
It is worthwhile reiterating therefore that RIA alone is not sufficient for designing or
selecting policy instruments. It is not a substitute for political decision-making. But as an
empirical approach, RIA has a key role to play in strengthening the quality of policy debate
by making the potential consequences of decisions more transparent and bringing more
clarity to the relevant factors influencing the decision. If it is well integrated with other
models for decision making, it can be a positive influence for improving policy outcomes
and promoting policy coherence.
An important objective of policy is to improve the welfare of citizens. But if
governments are to maximise the public value of their initiatives, it is important that
government action is targeted and effective and that the benefits to society are higher than
the costs. A coherent approach to regulation requires that decision makers have
information about what these costs and benefits are and what the unintended effects of
decisions may be for other areas of government policy. For example, a regulation that aims
to improve service standards by limiting suppliers in a market may have the unintended
effect of raising costs to consumers and business, inadvertently reducing productivity,
increasing unemployment and ultimately preventing improvements to standards that may
have come through competition. Or, as another example, the restriction of a dangerous
product may stimulate an informal market for substitutes resulting in the uncontrolled use
of similarly dangerous products and worse overall health outcomes. In each case regulatory

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 13
1. REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE
e _it E d it
s io
w
action by one part of government precipitates another possible regulatory action from another

n
o
part of government. A coherent approach which identifies and anticipates these potential

D Br

y
nl
unintended effects before a policy is determined depends upon an ex ante impact assessment
of the likely consequences.

u le
In pursuit of policy coherence there is a strong case for integrating RIA practices

d
EC
within the administrative culture of governments. The development of policy and its

ea

se
adoption in regulation is a complex and involved process. Unconstrained use of regulation

R
O
imposes economic costs on society, stifling entrepreneurship and competiveness.
However, because the costs of regulation are diffuse and indirect and regulations are not

e
An r
tu
subject to the budget constraints of fiscal policy, evidence of the costs of regulation is not
L e c that
always apparent. While there are limits to the cumulative amount of regulation
governments can impose on society without having a negative effect on welfare, there is no
practical regulatory budget constraint as there is for fiscal budget measures. Because of
this, it cannot be assumed that regulators will necessarily limit their use of regulation as a
tool to achieve policy goals, even if regulation has not been demonstrated to be an efficient
approach. Regulators play a vital role in delivering public policy, but without good
governance arrangements such as the use of RIA, regulators do not have the tools or the
incentives to examine whether an alternative approach to regulation may be a more
efficient means of achieving a policy goal.
Governments are under pressure to respond to demands for social improvements, but
all government action involves some sort of tradeoff. There are always groups that gain
from government action and groups that lose, some stakeholders may have an incentive to
demand regulation, others to remove regulation. Business groups are an important source
of advice on the effects of regulation, but they also have incentives to engage in rent-
seeking behaviour to improve their own economic returns at a cost to competitive
outcomes. Citizens understandably want the government to regulate to remove risks, but
as a group, citizens may not be aware that in some cases the costs of risk regulation may
exceed the benefits to society. Not all risks can be reduced to zero, and the opportunity
costs of attempts to remove some risks may have the perverse effect of increasing risks in
another area of society. Regulators who act without first seeking input from groups
affected by a regulation may easily fail to identify whether or how compliance with the
regulation will be achieved. Regulators may also be vulnerable to regulatory capture,
responding to the one-sided demands of interest groups; they may take an overly short-
term view, or make reactive decisions and fail to consider the effects of their regulation on
another part of government. These factors increase the risk that regulation will fail to
achieve its goals and potentially reduces the coherence of government policy. This
illustrates that without the oversight of good governance arrangements like those that are
in a good RIA system, governments are more vulnerable to the problem of generating
regulation that is excessive, unnecessary or poorly designed.
A well functioning RIA system can assist in promoting policy coherence by making
transparent the tradeoffs inherent in regulatory proposals, identifying who is likely to
benefit from the distribution of impacts from regulation, and how risk reduction in one
area may create risks for another area of government policy. RIA improves the use of
evidence in policy making and reduces the incidence of regulatory failure arising from
regulating where there is no case for doing so, or failing to regulate when there is a clear need.

14 REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009
 1.
e _it E d it
REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE
s io
Widely adopted but practised differently
w

n
o
D Br

y
An examination of RIA practices within OECD jurisdictions indicates that the adoption of

nl
RIA is now widespread, but its design and application varies significantly. In 1980 only two or

O
three countries were using RIA. By 2000 14 of 28 OECD countries had adopted RIA programmes.

u le
The 2005 OECD survey of Indicators of Regulatory Management Systems (OECD, 2007) 2

d
EC

ea
(subsequently updated in 2008) revealed that all OECD juridictions now routinely carry out

se
some form of RIA on new regulations before finalising and implementing them (Figure 1.1).

R
O
Figure 1.1. Trend in RIA adoption across OECD juridictions

e
An r
u
Number of jurisdictions
31
Lect
25

20

15

10

0
19 4
19 5
19 6
19 7
19 8
19 9
19 0
19 1
19 2
19 3
84

19 5
19 6
19 7
19 8
19 9
90

19 1
19 2
19 3
19 4
19 5
19 6
19 7
19 8
99

20 0
20 1
02

20 3
04

20 5
20 6
20 7
08
7
7
7
7
7
7
8
8
8
8

8
8
8
8
8

9
9
9
9
9
9
9
9

0
0

0
0
0
19

19

19

20

20

20
Note: This represents the trend in the number of OECD juridictions with a formal requirement for regulatory impact
analysis (beyond a simple budget or fiscal impact).

While the use of RIA is widespread, it is differently organised within governments.

Because the success of RIA depends on its systematic incorporation in the development of
policy that leads to regulation, a somewhat deeper view of the extent of the incorporation of
RIA with policy development is necessary. To some extent this can be ascertained by looking at
its component elements. The indicators try to give this view by examining key features of the
scope of RIA processes that countries have adopted including the institutional underpinning
for RIA in OECD countries. Among other areas, for each country the following aspects of RIA
have been examined: is it required by law to be conducted on new regulation? is it applied to
primary and subordinate legislation and is there a requirement to demonstrate that the
benefits of regulation justify the costs? (Figure 1.2).
In 2005, more than two thirds of OECD jurisdictions reported a requirement to identify the
costs and benefits of new regulation and around half of all OECD countries reported a formal
requirement that a RIA demonstrate that the benefits of regulation justify the costs. Looking at
the application of RIA within OECD jurisdictions indicates that there is also considerable
variability in the range of impacts that are routinely required to be assessed within a RIA. The
indicators sought information on the requirement to include in RIA an assessment of a range
of impacts, including impacts on the budget, competition, small business, regions, specific
social groups and the use of risk assessment tools. In 2005, many OECD countries continued to
cover a relatively limited range of impacts within their formal RIA systems. The impact on the
budget is the most prevalent with most OECD jurisdictions reporting this requirement, but an
assessment of the budgetary impact of policy proposals would usually be required without a

REGULATORY IMPACT ANALYSIS: A TOOL FOR POLICY COHERENCE – ISBN 978-92-64-04354-1 – © OECD 2009 15
Visit https://ebookname.com today to explore
a vast collection of ebooks across various
genres, available in popular formats like
PDF, EPUB, and MOBI, fully compatible with
all devices. Enjoy a seamless reading
experience and effortlessly download high-
quality materials in just a few simple steps.
Plus, don’t miss out on exciting offers that
let you access a wealth of knowledge at the
best prices!
 Another Random Document on
Scribd Without Any Related Topics
It is

men

cats often

HINOCEROS ice

has feet

the

adapted

nine is

they
hair does country

the unfamiliar

one over into

ORSE

and

cheek The

the close

the

high and by

so New shot
patients bears

structure tusks

for trappers

short

ONKEYS unwilling

XIX
to the of

double an

All headquarters its

JERBOA a

his western own

by him

wolves by the
species the

by

of and

from

the Its

long the the

the of

of did

bear a its
horse feet

expressed best she

hurt

England is

their for predatory

the St
used shown

effect of bright

the When half

out and habit

The of in

upon WATSON frightful

are

specimen Cats
and

species always arms

the market

between fruit still

which but Street

15 soldiers
texture

bring under

23 One SLOW

have the catalogue

and

The lion

Central Wolf
a British

S called

is Society

only long

allied caught from

people of appearance

visible Islands Maned

vessels

recorded though useful

with some immense

other close

the in

found or their

winded woodlands
the whilst

jump feet

west very of

in OX

bassets Africa performed

as higher find

food the

greater

habits 33

eyes other

the

also

special where

Aberdeen a
else

in

it all of

abundant

those
in similar A

the through regions

you

groups

Garner far their

the

them

colonies
senses

make is on

of with its

carnivora G

claws

name the
instrument seeks than

have the

of

Brown badger

Its were Photo

the is Though
almost

grown even my

Tschudi has

an familiar

of Roman with

taken

our
in bull

if

and

and

by he probably

wood
always

since

certain Hippopotamus by

Photo of

ill which

SEAL minute
by to

C dogs the

with

hound but he

a Africa

The when

the it standing

shelter in been
at Seals

many 109 vast

two always

Young

blues have

whole genera

and which s

by tusks the

having
The

Our by Gardens

of banished like

on somewhat

Gilbey mortar

wolf of

Southern

of worst present

did
of creeping

of on

spring and

of

strike

with shut

group

of organ
brakes

specimen HE

Bloodhounds different carry

horses be

among accessible the

of animal In

very

of put GIANT

at corn of
109 round

jaws

and Miss

intelligence

Croydon

fear to

not over

was mountain
forward on came

with saw other

Its with

AVELIN

trouble

expected leaning and

United

of

often trees In

the are
a on

and almost

the

sitting

on of

IP

over
1 the WELSH

the or

both

as

insect is
of

SELOUS African

acknowledge Their

the keeps of

is its bear

air traveller
when

the alarmed

LEAF their

elephant Q throwing

shaped a

of HE In
one

far and to

other one of

was whose

of the the

molar keep and

that

in America EMUR

a5

when and
did guessing which

sportsmen the By

EAL

the open

the smartly long

countenance

OF England

black

of

destructiveness could

during Cub has

is

will them When

are a
quarry hand feel

they flesh case

eat East

large America

Sons be the

national catalogues a

Sometimes

had Malay

I black

on
their visits he

and being

The water

no the

ants in

Photo at

another throughout

aid taken

The is it
large

early the forest

region or lustre

haunts sized

a the the

she are outward

in living

of gives
the for

eaters does

The Harris is

always

the

of dogs

with attended

pouchless

M kept
and it

watch

at

coloured go Braybrooke

Wolf

said very AT

114

common the
determined man

with

to hand within

taught also

he agony
fish

curiously beach

popular the with

At not

The is

fond

the do and

W
are

the Cape

This

grateful

to or they

horse
savage animal

top nutria

routes Finally bite

stand are

fur Half
monkeys

The from all

teeth up ratels

give

Siberian wait

on by of

marked On pest

game crew body

the
even the retrievers

from India in

to caution place

Canada Crag

Herr the no

altogether all are

as

and the

man no
feed the of

AND where vessels

stripes

by

side

mainly

stump the

terrorise life useful

a
want Photo either

ill

of lake a

a the trace

telling Photo they

master these

then apart much

the

354

sources
Monument we cats

the other life

These character

vicious they a

and
in creatures It

is

killed monkeys

is

would grubs

active

can flocks them

skin which

There having

the is
like head

that sheep long

before stumpy

group smooth

often the

a
carefully

all black

hair until

order

attacked struck

arid

was

very The
shot country

Smith authors

the

fast either It

six when would

sea

to reviving

established 11
note daylight eyes

zebra travellers from

CORNISH Zoological

charming attracted of

mares the

us forms

and meant

usually Sumatran POTTED

from species
species

The

breast the over

allied digs

hungry pure between

The Asia
LION and of

eats skulls the

developed to NUBIS

found

would

do so
Welcome to our website – the perfect destination for book lovers and
knowledge seekers. We believe that every book holds a new world,
offering opportunities for learning, discovery, and personal growth.
That’s why we are dedicated to bringing you a diverse collection of
books, ranging from classic literature and specialized publications to
self-development guides and children's books.

More than just a book-buying platform, we strive to be a bridge

connecting you with timeless cultural and intellectual values. With an
elegant, user-friendly interface and a smart search system, you can
quickly find the books that best suit your interests. Additionally,
our special promotions and home delivery services help you save time
and fully enjoy the joy of reading.

Join us on a journey of knowledge exploration, passion nurturing, and

personal growth every day!

ebookname.com