C.H. Montin, Tbilisi, 12 November 2014 11 Tbilisi, 12 November 2014 Developing Regulatory Impact...

C.H. Montin, Tbilisi, 12 November 2014 11

Tbilisi, 12 November 2014

Developing Regulatory Impact AssessmentIn Georgia

Defining the problem (issue), the objectives and the options

Charles-Henri Montin, Smart Regulation Consultant

Former Senior Regulatory Expert,

Ministry of economy and finance, Paris

http://smartregulation.net


Summary

Importance of a good definition of the problem/issue to solve

Example (motorbike accidents) How to identify and characterize the issue Example (rice paddies) Establish the need and rationale for action Formulating the policy objective Options and alternatives Selecting the best option


Stages of the RIA process


Importance of Defining the Problem/Issue

Problem Definition: example

There are many road accidents caused by motorbike drivers on the roads. The main reason for this is motorbike drivers who do not have the ability to control their motorbikes.


Draft legislation prepared with no RIA

The Ministry of Health (of country X) plans to introduce a new regulation that states only people who weigh over 40kg, and have a height of over 1.45m and a chest size under 73cm would be allowed to ride motorbikes on the road with engine sizes of 50cc and above.


Correct Analysis

Appropriate Problem Definition

At least 30 people die everyday from transportation-related incidents, and many more are seriously injured. Almost 70% of these accidents are caused by motorbike drivers. The majority of these accidents (67%) are caused by drivers either speeding, or driving while under influence of alcohol. And 81% of the accidents are caused by men.


How to identify the Issue


Brainstorm the Issues


Define the Problem to Solve


Establish need for action and rationale for intervention

Establish need for action (new regulation or policy):– Are there deficiencies in the regulations?

e.g. a missing constitutional mandate, a legal vacuum produced by a a court ruling, a legislative mandate to develop regulation, a need to fulfill an electoral promise, etc.

Is there a market failure ?– e.g. prices do not reflect the real costs and

benefits to society ( "externalities" ); – insufficient supply of public goods; – little or no competition; – information insufficient for decision-makers

( including consumers and government )


Problem definition: the process

Identify and describe the issue– evidence about the nature of the problem– probability of the problem arising and frequency– who is impacted?– who is best placed to manage/resolve the problem

Analyze and list the causes (examples)– longstanding known causes– new opportunities due to science and technology,– changes in attitudes– new awareness


Characteristics of a Problem/issue

When did the problem begin? What is the scale of the problem? Who is impacted by the problem? What regulations exist? Why is government intervention required?


Example

Problem Definition

There is a concern about Food Security due to the urbanization of agricultural land, particularly rice paddies.


Consequence of no RIA

Ministry of Agriculture and Rural Development is proposing to increase the level of compensation payable to land owners of rice paddy fields to:

1) Deter developers from purchasing rice paddy fields

2) Provide higher and more equitable price for rice paddy fields


Correct Analysis

Appropriate Problem Definition

The production of rice is not an attractive business. The profitability of rice production is low. Often rice paddy fields vary in quality and are therefore also inefficient in their production. Therefore owners of rice paddy fields are choosing to sell their land and find another source of income, possible in urban areas.


How to formulate a Policy Objective

“Objective” means the intended outcome or effect that the proposal will have.


Qualities of a Policy Objective


Options: what action should be taken?

Do nothing is always the first option…


Types of Options

Do nothing/maintain status quo Intervene directly e.g. Enforce existing regulations differently Co-regulate with professional bodies New regulations Create a climate for change e.g. Set standards Information and education campaigns Self regulation and codes of practice Quality assurance marks Incentives (financial, other)


Consider Alternatives to Regulation


Selecting the right option

You are looking for policy solutions that: Address the defined problem (focused) Will be effective in delivering the desired

outcome (effective) Are proportional to the problem Fit with wider social, economic and

environmental policy objectives Give good value for money Are enforceable


Conclusion

How you intervene is as important as whether to intervene.

You need to exercise logical judgement about which option to develop to take to a full Regulatory Impact Assessment

C.H. Montin, Tbilisi, 12 November 2014 11 Tbilisi, 12 November 2014 Developing Regulatory Impact...

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