REGULATORY IMPACT ASSESSMENT IN DEVELOPING AND TRANSITION ECONOMIES: A SURVEY OF CURRENT PRACTICE AN

1
REGULATORY IMPACT ASSESSMENT IN DEVELOPING AND
TRANSITION ECONOMIES A SURVEY OF CURRENT
PRACTICE AND RECOMMENDATIONS FOR FURTHER
DEVELOPMENT

• Colin Kirkpatrick, David Parker and Yin-Fang Zhang

2
Regulatory Impact Assessment

• The process of systematically assessing the costs
  and benefits of regulations
• Both new regulations (ex ante assessment) and
  existing regulations (ex post assessment)
• Used in the OECD
• Implementation in lower-income economies is
  largely unknown (exceptions are Mexico and South
  Korea, which are OECD members)

3
Regulatory Impact Assessment can Promote

• Better regulation/ good governance
• Transparency
• Accountability
• Consistency reduce uncertainty.

4
Our Research

• In an earlier paper we reviewed the arguments
  surrounding the use of RIA in the context of
  developing countries.
• In this paper, we report the results of a
  questionnaire survey of regulators in developing
  and transition economies.
• Questionnaire (in the Appendix to the paper) is
  based on the principles of RIA especially in the
  context of lower-income economies.

5
Principles of RIA

• There are two dimensions to a good regulatory
  system, namely outcomes (measured in terms of
  objectives) and processes. Questions were asked
  relating to both dimensions.
• RIA needs the development of appropriate skills
  within the government machinery, the development
  of appropriate forms of consultation, necessary
  championing across government, and it needs to
  overcome the risks from regulatory capture.

6
The Questionnaire

• Distributed to 99 countries in the summer of 2003
  and 40 responded (a 40 response rate).
• Distributed to 311 regulatory bodies in these
  countries and 60 returns received (a more
  disappointing response rate of around 17). Where
  multiple replies were received from a country,
  the answers were compared for consistency.
• The majority of responses were from regulators of
  utilities (energy -22 telecoms 20). Most
  respondents were in senior positions (e.g. 23
  held the post of director-general or equivalent).

7
Countries from which replies were received

• Asia (nine countries)India, Jordan, Korea,
  Malaysia, Oman, Pakistan, the Philippines, Sri
  Lanka, Thailand
• Africa (16 countries)Algeria, Botswana, Cameroon,
  Gabon, Ghana, Guinea Bissau, Kenya, Malawi,
  Mauritius, Morocco, Nigeria, South Africa,
  Tanzania, Uganda, Zambia, Zimbabwe
• Latin America and Caribbean (nine
  countries)Barbados, Brazil, Colombia, Jamaica,
  Mexico, Nicaragua, Peru, Uruguay, Venezuela
• Transition Economies (six countries)Albania,
  Estonia, Georgia, Lithuania, Moldova, Romania

8
Questions related to the following subjects

• existing familiarity with RIA as a concept and
  the OECD guidelines
• the existing use of RIA within the country
• legal requirements to adopt RIAs and the
  existence of published RIA guidance within
  government
• the form RIAs take when used
• the processes used within government when
  undertaking RIAs
• RIA transparency, in terms of published
  documentation
• public consultation and participation in RIA
  exercises
• RIA and wider regulatory reforms.

9
The Resultsare RIAs used?
Only 6 respondents, however, were familiar with
the OECD guidelines.
Mainly used for ex ante assessment only. Few
reported existence of guidelines.
10
Where used?
Only 13 countries claimed that RIA was used in
all 3 areas of regulation.
11
RIA covers costs benefits?
However, Few claimed to use sophisticated
techniques to quantify costs and benefits
5 countries uncertain
12
Processes

• Consulation occurs, but less frequently with
  consumer bodies.
• Few make the results of consultation public.

13
RIA and Wider Regulatory Reform

• In 22 of the 40 countries from which replies were
  received, respondents reported that there was a
  strategy in place promoting government-wide
  reforms in regulation.
• RIA is being adopted in the majority of cases as
  part of a wider regulatory reform programme.

14
Conclusions

• Level of awareness of RIA in developing and
  transition economies is higher than we might have
  expected, based on the limited information
  previously available.
• Sample bias possible perhaps the countries from
  which replies were not received have less
  knowledge of RIA?
• We need to know more about exactly how RIA is
  being used and its precise results this is the
  subject of on-going case study research with our
  partners.

15
In particular

• We need to adapt the approach to meet the needs
  and conditions of lower-income economies,
  including their institutional endowment.
• We need to develop a focus on poverty reduction.
• We need to guard against capture of the process.

16
Recommendations for future research

• Better regulation does not always mean less
  regulation (World Bank, 2001).
• Need to develop knowledge of
• What is happening in terms of regulation and
  regulatory governance in particular countries and
  what lessons can be learned?
• What procedures already exist in countries to
  monitor the performance of regulation?