Regulatory policy tools in a multi-level context
The implementation and use of policy and regulatory tools in a multi-level context presents some challenges. In terms of their design and the specific techniques needed to put them into practice, there is certain homogeneity between the tools used at central and sub-national levels of government. The big question, however, refers to the best strategy to maximise the benefits of certain tools and to make a coherent choice of which level should be in charge of their implementation. Tools for high quality regulation at different levels of government should be designed and used with the aim to reduce transaction costs and to identify the “optimal level” of application. The multi-level dimension requires that policymakers consider avoiding possible overlapping in the use of certain tools that could be costly if not used in a rational way.
Box 10.2. The Regulatory Criteria Checklist of British Columbia, Canada
In British Columbia, Canada, the Regulatory Criteria Checklist (RCC) replaced RIA in 2001. Ministers and heads of regulatory authorities must make sure that any proposed legislation, regulation and new policy are evaluated according to the criteria set out in the checklist. A signed copy of the RCC or exemption form must be included with any legislation submitted for Executive Council review and any Order in Council that is being recommended by the responsible minister to the Executive Council to enact a regulation. Copies of the signed RCC and exemption forms must be provided to Straightforward BC. In addition, the responsible minister or head of a regulatory authority must make the RCC available to the public, at no charge, on request.
The RCC itself is simple and includes several questions in eleven different categories: i) Reverse onus: Need is justified, ii) cost-benefit analysis, iii) competitive analysis, iv) streamlined design, v) replacement principle, vi) results-based design, vii) transparent development, viii) time and cost of compliance, ix) plain language, x) simple communications, and xi) sunset review/expiry principle.
Each category has a yes/no checkbox next to it. If the answers to the questions in any category are “no”, then an explanation must be attached. At the end of the form, there is a box that asks how many regulatory requirements will be added and how many will be eliminated, as well as what the net change will be. When the reform policy was first introduced in 2001, two regulatory requirements had to be eliminated for every one introduced. Since 2004, when the original goal to reduce regulation by one-third was met, a target of no net increase has been in place and extended to 2015. The RCC encouraged a change in culture from one where regulation was seen as the answer to any problem and the private sector was viewed with some suspicion to one where questions are asked, alternatives are considered, and the contribution that businesses make to the economy is better understood.
Source: Garcia Villarreal, J. P. (2010), “Successful Practices and Policies to Promote Regulatory Reform and Entrepreneurship at the Sub-national Level”, OECD Working Papers on Public Governance, No. 18, OECD Publishing, doi: 10.1787/5kmh2r7qpsti-en.
For example, it is worth asking whether RIA should be undertaken at each level of government or what is the “optimal level” to do it. Solutions to these questions will depend on the specific context and sector regulated, but the usefulness of RIA for local regulations is unquestionable. Regulations produced by sub-national levels of government have normally a direct and decisive impact on citizens and businesses, generating substantial costs and benefits. Sub-national levels of government can tailor RIA to the specific needs of their economies, aspects that could be ignored by central levels. RIA at sub-national levels of government also contributes to increase efficiency and transparency while considering consequences of proposed regulation. But finding the “optimal level” is not an easy task and so far there is no empirical evidence on how to define it. However, there are a few cases in which sub-national governments have designed simplified ex ante regulatory assessment methodologies to control the flow of regulations (see Box 10.2 on the case of British Columbia, Canada).