Improving the quality and ensuring enforcement of the regulatory framework for urban development

The regulatory framework for urban development in China, and the areas that have an impact on the issue, is quite comprehensive. It includes formulation of the urban and rural plan, implementation, modification, supervision and inspection, legal liability and supplementary provisions. The current Urban and Rural Planning Law is the product of continuous updating and improvements of the old regulatory framework. However, the regulatory framework suffers from at least two main shortcomings: i) ambiguity and lack of clearly defined rights and responsibilities of the different actors; and ii) lack of a systematic enforcement of the urban plans. These weaknesses have affected collaboration across levels of government and generated duplication of effort; they have also compromised accountability of the different urban actors.

Chinese authorities may wish to launch a review of urban planning legislation to eliminate discrepancies and gaps between the laws and executive regulations.18 Urban planning legislation should create effective and credible co-ordination mechanisms across levels of government and sectors, foster coherence across major policy objectives, clarify responsibilities for assuring regulatory quality, and ensure capacity to respond to a changing, fast-paced environment. It should also make certain that institutional frameworks and resources are adequate, and that systems are in place to manage regulatory resources effectively and to discharge enforcement responsibilities. Strengthening regulation by staffing regulatory units adequately is also recommended, as is conducting regular training sessions and making effective use of consultation, including advisory bodies of stakeholders.19

To ensure compliance with the rules and regulations on urban planning, Chinese authorities should develop and apply enforcement strategies that deliver the best possible outcomes, by achieving the highest possible levels of compliance while keeping regulatory costs and administrative burdens as low as possible. To address this problem, appropriate compliance-assurance strategies should be developed that enable strict, fair and timely response to noncompliance, while creating incentives to improve compliance and rewards for better behaviour. The discretionary powers of enforcement personnel should be limited, and delineated precisely in the regulations. The experience of OECD countries suggests that a well- formulated enforcement strategy is one that provides correct incentives for regulated subjects as well as appropriate guidelines for enforcement staff, and minimises both monitoring effort and the costs for the regulated subjects and the public sector (OECD, 2014a).

Nonetheless, efforts to make sub-national levels of government comply with the law and avoid making frequent changes to the regulatory detailed plans need to be stepped up. This leaves room for discretionary implementation of the urban plan and for improper behaviour on the part of officials and developers. The State Council’s ongoing effort to formulate the Rules for Modification of the Urban Comprehensive Plan, and the Ministry of Housing and Urban-Rural Development’s work on measures to assess the implementation of the urban comprehensive plan, need to be continued and reinforced. The central government has taken special action nationwide to promote openness and transparency in decision-making and planning management. It has also required that planning and project approval comply with the law. This is an initial step in limiting the discretion of administrative authorities involved in planning, setting down stricter procedures, and combating corruption.

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