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«Corrigenda to OECD publications may be found on line at: © OECD 2014 You can copy, download or print OECD content for ...»

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 The Law for Regulatory Reform in the State and Municipalities of Jalisco established the Committee for Regulatory Reform (COMERJAL), which is composed by representatives of the federal government (15 members), the State of Jalisco Executive branch (17 members, plus the President, Vice-president, and Technical Secretariat of the committee), the State Legislature, the State’s Judicial branch, municipalities (16 members), business groups (16 members), and the social sector (6 members). The social sector is represented by the Workers Confederation (CTM), the Workers and Peasants Revolutionary Federation of Jalisco, the Regional Workers Confederation, the Peasants National Confederation (CNC), the Federation of Neighbourhood Associations of Jalisco, and the Agrarian Communities League.

COMERJAL is one of the most diverse citizen councils found in Mexico.

Source: OECD (2012), “Guía para mejorar la calidad regulatoria de trámites estatales y municipales e impulsar la competitividad de México” (Guide for improving state and municipal regulatory quality and promoting competitiveness in Mexico), OECD Publishing.

The proximity of local authorities to the citizens they serve creates an opportunity to draw them into the policy process. The city of Copenhagen, Denmark, for example, has a long tradition of citizen engagement and, in the late 2000s, involved citizens in the formulation of the Regional Development Plan for the Capital Region (OECD, 2009c). Yet participatory decision-making can be even more important in less cohesive places, where the urban space is highly contested and characterised by relatively volatile and fragmented alliances. In such cases, building alliances for a more competitive and inclusive processes for decision-making becomes imperative. That is perhaps why South Africa introduced requirements for citizen participation in its legislation and why the authorities in cities like Cape Town and Gauteng have worked hard to invest those processes with meaning and to ensure that they do not become formal exercises, which is often a real risk (OECD, 2008, 2011e). Contested environments are not limited to middle-income countries: in Toronto (Canada) a contested municipal merger led to deep political divisions that persist to this day. Yet the city council managed to adopt a new economic development strategy

unanimously in January 2008, after the city shifted from a consultation model to a co-production model:

instead of drafting a strategy for consultation and comment, the city administration invited civil society actors to participate in the elaboration of the strategy from the beginning (OECD, 2010c).

Tools for evidence-based policy making

Governments can use a variety of instruments to strengthen the evidence base for decision making. These tools clarify the effects and the trade-offs of government actions for decision makers and stakeholders alike. They include, but are not limited to, regulatory impact assessment, investigatory commissions, cost-benefit analysis, ex-post evaluation and performance-based budgeting. If used systematically these tools provide strong levers for governments to promote both inclusive political processes and to ensure that issues of social inclusiveness are mainstreamed in rule-making and policy choices.

At its core, evidence-based policy making incorporates consistent use of data to inform policy decisions. This approach to policy making involves (i) generating and gathering basic data; (ii) transforming data into actionable evidence; (iii) using evidence in key decision-making processes, and, (iv) disseminating evidence and involving stakeholders to sustain reform implementation (OECD, 2012f). Each of these steps requires further synthesising information in a way that can respond to the interests and capabilities of different stakeholders.

Ex ante and ex post regulatory impact assessments play a role in revealing and monitoring the trades-off between economic, social and environmental effects of potential regulatory responses. A well-functioning regulatory impact analysis (RIA) system can assist in promoting policy coherence by making transparent the trade-offs 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. Indeed, the range of impacts that are routinely required to be assessed within a RIA has evolved significantly over the last decade to include competition, market openness, budget and the public sector, specific social groups and small businesses. The inclusion of social concerns has also become more widespread: an assessment of the impact on poverty is required in more than half of OECD countries (Figure 4.4). Canada provides a concrete example of how RIA can be used to give special consideration to vulnerable social and economic groups (Box 4.5).

Many emerging and developing economies have begun applying regulatory impact assessments to systematically enhance rule making and improve the business environment. In Latin America, for instance, Brazil has established its PRO-REG programme in the President’s Office to implement RIA. In Southeast Asia, Malaysia, Viet Nam, Cambodia and Laos are all in the process of piloting or introducing impact assessments. In Africa, South Africa, Uganda, Tanzania and Zambia have also introduced impact assessments. In these countries the requirements for analysis have been adapted to suit the country priorities and national strategies, whether that is encouraging small businesses, improving economic productivity or poverty reduction.





Figure 4.4.

The types of impact assessments have significantly increased in OECD countries

–  –  –

Impacts on specific regional areas(**) Impacts on specific social groups(*) Impacts on other groups (not for profit  sector including charities) (**) Impacts on the public sector(*)

–  –  –

Notes: Jurisdictions involve OECD countries and the European Union. For 1988 no data are available for the European Union, Luxembourg, Poland, and the Slovak Republic. This means that that this figure is based on data for 27 countries in 1998 and for 30 countries and the EU in 2005/2008. (*) No data are available prior to 2008; (**) No data are available prior to 2005 Source: OECD (2009), “Indicators of Regulatory Management Systems”, www.oecd.org/regreform/indicators. Data for Brazil, Russia and South Africa are available on www.oecd.org/gov/regulatory-policy/rmscountrynotes.htm

Box 4.5. Inclusive rule making procedures in Canada

Including different communities: In Canada, the Cabinet Directive on Regulatory Management explicitly states that “departments and agencies are also to work with First Nations, Inuit, and Métis communities and peoples; with national, regional, and local aboriginal organisations; and with aboriginal governments” when consulting on draft regulatory proposals. In fact, when assessing regulatory impacts on society and culture, the Triage Statement Form (which determines whether a new regulatory proposal is subject to a low impact or to a medium/high impact RIA) advises government ministries and departments to give special consideration to vulnerable social and economic groups, such as aboriginal peoples, official-language minorities, lower income Canadians, recent immigrants, and groups affected on the basis of age, gender, race, and culture.

Including small business: Canada’s regulatory policy now also includes the requirement to adopt a “small business lens” when assessing regulatory proposals. The objective of the small business lens is to reduce regulatory costs on small businesses without compromising the health, safety, security, and environment of Canadians. The small business lens ensures that regulators are sensitive to the needs of small businesses when they design regulations. The lens introduces a number of new requirements that regulators must consider when designing regulations that will impact small business. Regulators must complete a checklist that guides consultation with small business to understand their realities at the earliest stages of design. They will have to demonstrate to ministers that due consideration was given to reduce the burden associated with the option imposed upon small business. If a less burdensome option is not adopted, regulators will have to justify why.

Source: Treasury Board Secretariat of Canada (2014), “Red Tape Reduction Action Plan”, webpage, www.tbs-sct.gc.ca/rtrapparfa/index-eng.asp, consulted on 23 January 2014.

As noted previously, special commissions can play a role in evidence-based decision making.

Among the tools adopted by countries to better integrate regulatory policy and Inclusive Growth, several countries have established special commissions to provide advice on how regulatory reforms for productivity impact inclusiveness objectives. For instance, the Productivity Commission of New Zealand advises the Government on improving productivity in a way that is directed to supporting the overall wellbeing of New Zealanders. The Commission undertakes in-depth inquiries on topics referred to it by the Government, carries out productivity-related research that assists improvement in productivity over time, and promotes understanding of productivity issues.

Performance-related budgeting tools also allow for greater transparency of the objectives and results of public policies. These tools contribute to justifying public programmes in terms of performance and impact on the lives of citizens.62 Performance-related budgeting tools should be coupled with robust evaluation processes to assess how well targets are being met. It is important that these processes have a strong public-facing aspect, not just in the interests of transparency per se, but also to lend these processes greater legitimacy and force as tools of accountability.

Finally, tools that reveal the gender-specific impacts of policies and programmes contribute to inclusive policy making in various domains. For example, introduction of gender mainstreaming and gender impact assessments have led to improvement in care provisions and leave arrangements, as well as actions to desegregate labour markets across EU member states. This in turn strengthens equality of access to labour market opportunities of both men and women (Rubery, 2002). Indeed OECD countries (e.g.

Austria) are increasingly adopting the use of gender impact assessments or gender-sensitive budgeting to assess gender implications and ensure gender-sensitivity and responsiveness of government actions. These practices however are not yet fully integrated into the mainstream policy analysis and budgetary process (OECD, 2014b). Some developing countries, such as the Philippines, Peru, and Thailand are also engaging in some form of gender mainstreaming and gender-responsive budgeting.

Public consultation to support public interest, trust and legal certainty

Public consultation of regulation plays an important and multi-faceted role in inclusive policy making. These consultations contribute to improving the quality of regulation and the governments’ responsiveness to citizens and firms. They also support evidence-based decision making in government, educate stakeholders, improve regulatory compliance, promote trust in government, and bolster the legal security of citizens and businesses (OECD, 2011d). Transparency and participation in the regulatory process is an important pre-requisite to ensure that regulation serves the public interest and is informed by the legitimate needs of those interested in, and affected by, regulation.

Evidence from OECD countries highlights critical conditions for effective consultation, communication and stakeholder engagement. A clear, enforceable, measureable, government-wide policy on active stakeholder engagement in developing and reviewing regulations is crucial (OECD, 2013c). Such a policy needs to be accompanied by mandatory but flexible guidelines for stakeholder engagement. Public consultation implies inviting the general public to comment on draft regulatory proposals, providing sufficient time for submitting comments, and offering clear indications of how comments can be submitted. Information and communication technologies can be used to broaden outreach efforts and facilitate consultation (Box 4.6). ICT tools must be user-friendly, capitalise on users’ existing social networks, and use plain language in communication (OECD 2010e).

Box 4.6. Regulations.gov in the United States

Regulations.gov is the one-stop, online source for the public to search, view, and comment on regulations issued by the US government. On average, US federal agencies and departments issue nearly 8 000 regulations per year. In the past, if members of the public were interested in commenting on a regulation, they would have to know the sponsoring agency, when it would be published, review it in a reading room, then struggle through a comment process specific to each agency. Today using regulations.gov, the public has the potential to shape rules and regulations that impact their lives, from anywhere.

The e-Rulemaking Program is working to meet users’ needs by enhancing regulations.gov. In July 2009, regulations.gov was re-launched with enhanced search functions, and several communication and information sharing features. Since this re-launch, site updates are continually made with the goal of further engaging the public and enhancing their participation in the regulatory process.

Citizens share their opinions on what features and functions they would like to see on regulations.gov through online surveys, focus groups, usability testing, and comments received on Regulations.gov Exchange — an online forum launched in May 2009 to solicit public feedback. The Regulations.gov Exchange forum was re-launched in January 2010 to continue to provide users with two-way communication, particularly as the e-Rulemaking program works to update and improve the regulations.gov website.

Source: Excerpted from www.regulations.gov consulted on 28/01/2014.

Since stakeholder engagement can be costly and subject to “review fatigue”, it needs to be welltargeted and efficient. This can be achieved by good planning and by ensuring that resources dedicated to consultation and the depth of the process are proportional to the impact of the regulation. Consultation should be undertaken early in the process, before legislation is drafted, ideally when the problem is defined and the goals for a government intervention are set. The earlier in the stakeholders are taken on board, the less likely it is that there will be demands for substantive changes when the final draft is ready. Engaging stakeholders throughout the process of developing regulations also increases a sense of ownership and compliance. In addition to consulting when developing new regulations, it is equally important to involve stakeholders when reviewing existing regulatory stock to take into account the users’ perspective (Box 4.7). Sufficient resources must therefore be available for this process.

Box 4.7. Australia’s Quarantine and Biosecurity Review: A model consultation arrangement In February 2008, Australia launched a review of its quarantine and biosecurity systems. An independent panel of experts, appointed by the Minister for Agriculture, Fisheries and Forestry, was asked to review the appropriateness, effectiveness and efficiency of current arrangements, including public communication processes and governance and institutional arrangements. The Panel first prepared and released an issues paper in order to prompt discussion and attract submissions and comments from stakeholders. It received around 220 written submissions from a wide range of interested parties, including overseas submissions. The Panel organised over 170 meetings with domestic and international stakeholders, both individuals and representatives of organisations. It also sought information from Australia’s trading partners on their arrangements for managing biosecurity risks; held discussions with government officials and business representatives in New Zealand, North America, Europe; and met with representatives from other WTO members. A dedicated website supported the process: reference documents used during the review were made available online, alongside copies of all the submissions received.



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