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Regulatory Impact Appraisal System Design for Bangladesh

Regulatory Impact Appraisal System Design for Bangladesh. Mark Minford SEDF / Bannock Consulting 23 November 2005. Rationale: Why use RIA?. RIA is part of international best practice for improving legal & regulatory environment

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Regulatory Impact Appraisal System Design for Bangladesh

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  1. Regulatory Impact Appraisal System Design for Bangladesh Mark Minford SEDF / Bannock Consulting 23 November 2005

  2. Rationale: Why use RIA? • RIA is part of international best practice for improving legal & regulatory environment • RIA reviews whether new legislation has clear purpose & systematically evaluates costs of laws on businesses & society • Aims to achieve well-targeted regulations that achieve policy aims with minimum burden on those affected

  3. Background: What is RIA? Examination of: • Purpose & Intended Effect of Regulation • Options (the ‘how’ question) • Costs & Benefits (the ‘what’ question) • Distribution of Impacts (the ‘who’ question) • Formal Consultation with Business • Enforcement Methods & Issues

  4. Why adopt RIA in Bangladesh? The Governance Reason • Helps to make a reality of the vision of creating a competitive and enabling business environment • RIA is an internationally validated tool for improving quality of governance • By clarifying and reducing unnecessary scope of regulations, RIA will reduce the scope for corruption

  5. Why adopt RIA in Bangladesh? The Economic Rationale • Private sector is a key driver of change, so Bangladesh investment climate must be positive • Ensures that regulations & administrative requirements are not (unintentionally) harmful • By reducing the burden of regulation on businesses, RIA can increase productivity, speed economic growth and create jobs

  6. Examples of RIA in Practice (1) Sri Lanka • RIA Concept developed in 2005: - an incremental approach, starting at central government level - location in either President’s office, Cabinet Office or Min of Finance - RIAs to be confined to regulations with most significant impacts - draft regulations & RIAs to be submitted to Unit for review

  7. Examples of RIA in Practice (2) Mexico • Economic Deregulation Unit set up in 1989 by Presidential Decree within Secretariat of Trade (now Economy) • Unit had broad mandate & built consensus through wide stakeholder participation • Unit helped dismantle price controls, simplify commercial court procedures and reduced time for business start-up from 90 days to 1 day

  8. RIA in BangladeshOptions • Location: Centre of Government (Ministry of Law, Ministry of Finance or BoI*) vs. Independent agency • Authority: Reporting directly to P.M. or Minister of Finance or via a Ministry (BoI, Law or Finance?) • Scope: Look at all legislation or only most legislation from particular ministries? RIA produced by Ministry or by separate Unit? *Government has expressed a preference for the proposed regulatory reform unit to be placed under the PM’s office in BOI

  9. RIA in Bangladesh:Key Issues Some key issues that need to be resolved: - Where Office overseeing RIAs should be located and how closely linked it should be with Ministries? - How to develop capacity to undertake RIA in government and in private sector? - Managing RIA results (which will affect interest groups and rent seekers!)

  10. RIA in Bangladesh:Some Key Questions - What should be the role of private sector representatives in overseeing the work on RIAs? - What training will be required for business associations & Chambers to respond well to RIAs? - How can the effectiveness & impact of a Regulatory Reform Commission or Unit be maximized?

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