Hsin Chu, August 2012

1. Building Effective Institutions for Managing Regulatory Policy Hsin Chu, August 2012 Charles-Henri Montin, Senior Regulatory Expert, Ministry of economy and finance, Paris http://smartregulation.net C.H. Montin, Hsin Chu, August 2012 1

2. All Governments find it difficult to control the quality and quantity of regulation, this can be due to: Lack of coordination and planning capacities to promote coherent reform across government Vested interests may block reform, particularly where decision processes are not transparent and accountable Political incentives favour short term interests over long term social policy goals Regulation becomes outdated in changing environments Regulation is exercised by many levels of government and may be duplicative or excessive Regulators may not be equipped, or have incentives, to assess the cost of regulation and whether regulation is a practical solution Challenges to Delivering High Quality Regulation C.H. Montin, Hsin Chu, August 2012

3. “1. Commit at the highest political level to an explicit whole-of-government policy for regulatory quality… 2. Establish mechanisms and institutions to actively provide oversight of regulatory policy procedures and goals, support and implement regulatory policy, and thereby foster regulatory quality.. “ Governments should: Adopt an integrated approach, which considers policies, institutions and tools as a whole OECD Recommendation on Regulatory Policy and Governance (2012): extract on institutions C.H. Montin, Hsin Chu, August 2012

4. The right set of institutions are required to ensure regulatory implementation: Regulatory oversight bodies with whole of government responsibility Advocate benefits of reform Perform a gatekeeper role on quality of RIA Provide training and clear guidance to regulators Ministerial accountability for regulatory policy Measureable programs to reduce administrative burdens Careful design of independent regulators Institutions to drive Regulatory Policies C.H. Montin, Hsin Chu, August 2012

5. Functions of an oversight body Four core functions: • i) oversight of the rule-making process; • ii) assisting rule makers in their evidence-based analysis (including training & advice); • iii) challenging the quality of regulatory proposals, • iv) advocating for quality regulation/ better regulation. “regulator of the regulators”, “ watchdog” responsible for overseeing regulatory quality C.H. Montin, Hsin Chu, August 2012

6. Success factors • Proximity to core executive functions: ( centre of government, or part of central ministries) • Technical expertise and political support, for coherence, leadership and efficiency.. • Checks and balances, opt-out exemptions and time limits. Limit infringements to ministerial responsibilities, but ensure political commitment; no significant loopholes; transparency and accountability mechanisms • Networked approach: core body coordinating a network of units in the various ministries. C.H. Montin, Hsin Chu, August 2012

7. Institutional arrangements to promote regulatory policy (1998, 2005 and 2008) Notes: The sample includes 31 jurisdictions for 2008 and 2005. For 1998, 27 jurisdictions are included as no data were available for the EU, Luxembourg, Poland and Slovak Republic (*) Questions only relevant for the years 2008 and 2005 Source: Question 14 / 2008 OECD Regulatory Indicators Questionnaire C.H. Montin, Hsin Chu, August 2012

8. The ‘challenge’ function of the OB Reviewed Line Ministries Oversight Body Stock of Regulation Rejected C.H. Montin, Hsin Chu, August 2012

9. Institutional Design: OB within the executive Executive 1. Centre of Government Legislative Oversight Body Secondary Legislation Regulation Primary Legislation Independency & Authority High level political support Whole-of-Government Multidisciplinary Broad concept of reform C.H. Montin, Hsin Chu, August 2012

10. Conclusion Engines of reform NO ONE SIZE FITS ALL MODEL • Each system decides its own institutional setting. The goal is to satisfy common needs: • Co-ordination • High Regulatory Quality • Regulatory Innovation and Improvement • Technical capacities within Government C.H. Montin, Hsin Chu, August 2012

11. To continue the study… • This presentation is online at: http://montin.com/hsinchu/institutions.ppt • Further questions contact: • charles-henri.montin @ finances.gouv.fr C.H. Montin, Hsin Chu, August 2012 11 11