30a Conferencia nacional sobre Mejora Regulatoria México– 18 octubre 2012

1. Mejora regulatoria para fortalecer la competitividad nacional Lecciones de Francia y del mundo 30a Conferencia nacional sobre Mejora Regulatoria México– 18 octubre 2012 Charles-Henri Montin, Senior Regulatory Expert, Ministry of economy, finance and industry, Paris, France http://smartregulation.net

2. Contents How regulatory reform can contribute to competitiveness Varieties of regulatory reform experience (one faith, many chapels) How can Mexico further tap the competitiveness potential of regulatory reform CH MONTIN, Pachuca (MX), 18 octubre de 2012

3. Part one: How regulatory reform can support competitiveness Approaches to competitiveness Regulation in society and the economy What is quality regulation? Measuring competitiveness

4. Drivers or competitiveness CH MONTIN, Pachuca (MX), 18 octubre de 2012

5. How can governments nurture competitiveness? • Establish a stable and predictable macroeconomic, political, and legal environment • Improve the availability, quality, and efficiency of general purpose inputs, infrastructure, and institutions • Set overall rules and incentives governing competition that encourage productivity growth • (cluster development) • (process of economic change ) CH MONTIN, Pachuca (MX), 18 octubre de 2012

6. The main areas of regulation in support of competitiveness CH MONTIN, Pachuca (MX), 18 octubre de 2012

7. What is quality regulation? • Necessary • Clear/ accepted • Light (costs) • Well targeted • Stable • Proportional • Well applied • Regulation: written rules that mandate behavior, in pursuit of policy objectives • Regulation, “one of three key levers of state power, with fiscal and monetary policy” (OECD) CH MONTIN, Pachuca (MX), 18 octubre de 2012

8. Lack of coordination and planning capacities Vested interests may block reform; political incentives favour short term interests over long term societal policy goals Rapidly changing environments (obsolescence) Too many levels of government: duplicative or excessive reg. (e.g. gold-plating of EU law) Over-reliance on regulation, regardless of cost and alternatives Risk aversion, poor risk management in reg. Challenges to Delivering High Quality Regulation CH MONTIN, Pachuca (MX), 18 octubre de 2012

9. Economic impact of good regulation • Regulatory Reform can yield 5 -11% of extra GDP • (impact of reform of Product market regulation, Employment protection legislation reform and benefit, tax and retirement systems • See 2011 working paper http://www.oecd-ilibrary.org/economics/raising-potential-growth-after-the-crisis_5kgk9qj18s8n-en CH MONTIN, Pachuca (MX), 18 octubre de 2012

10. Part 2Varieties of regulatory reform The growth and control of regulation The three ages of regulatory quality International and national approaches

11. From regulation to better regulation From Jacobs & Associates CH MONTIN, Pachuca (MX), 18 octubre de 2012

12. Early sets of principles OECD 1995-97: 7 recommendations to governments UK 1998: 5 principles transparency, accountability, targeting, consistency, proportionality Maturity Mandelkern report (EU) (2001): six dimensions OECD “performance” 2005 :Broad programmes, impacts, transparency, competitiveness test, liberalisation, policy linkages Current trends National sets: Australia (2007) “best practice regulation,” Ireland, Finland… OECD review of 2005 principles (2012): post-crisis adaptations The search for “Principles” of regulatory quality CH MONTIN, Pachuca (MX), 18 octubre de 2012

13. 2012 OECD Recommendation on Regulatory Policy and Governance (1) • Adopt explicit policy for regulatory quality. • Apply open government, consultation • Oversee procedures and goals of regulation to foster quality. • Integrate RIA into the early stages of the policy process • Review stock of significant regulations against policy goals, to ensure that they remain effective, up to date, cost justified, cost effective and consistent. • Reports on the performance of regulatory policy and reform programmes CH MONTIN, Pachuca (MX), 18 octubre de 2012

14. 2012 Recommendation on Regulatory Policy and Governance (2) • Supervise regulatory agencies • Provide review mechanism accessible to citizens and businesses at reasonable cost. Timely decisions. • Risk-based design and implementation of regulations. Responsive implementation and enforcement strategies. • Co-ordination mechanisms between levels of government to promote coherence of regulations. • Develop regulatory management capacities at sub-national levels of government. • Give consideration to all relevant international standards and frameworks for co-operation CH MONTIN, Pachuca (MX), 18 octubre de 2012

15. The three ages of regulatory quality Regulatory Reform (1995) Effective Efficient Competitive Consult stakeholders Regulatory governance (2010) Integrated objectives Cycle approach Incl. M&E Involve stakeholders GOOD BETTER SMART BR ≠ Deregulation BR = dynamic LT process acting on policies, institutions and tools CH MONTIN, Pachuca (MX), 18 octubre de 2012 Regulatory management Command & Control Due process Consistent legally Accessible Inform stakeholders

16. One objective, three approaches OECD Regulatory policy Think tank Best practice forum Market orientation Public management European Union Better/Smart Regulation Supranational Manage ‘Acquis communautaire’ Subsidiarity Transposition Process-oriented Inter-institutional World Bank Group Business climate Doing Business (outcomes) Development technical assistance One stop shops Licensing Reg. guillotine CH MONTIN, Pachuca (MX), 18 octubre de 2012

17. OECD Thematic work • Institutions for regulatory oversight • Building capacities and introducing tools • Preventing regulatory capture • Ensuring policy sustainability • Contributing to green growth • Addressing risk in regulation making • Coordinating multi-level regulation • International regulatory co-operation CH MONTIN, Pachuca (MX), 18 octubre de 2012

18. ‘Regulatory Governance Cycle’ OECD Policy issues for government action Develop policy roadmap - choose the policy instrument(s) The 4 Cs Consultation Co-ordination Co-operation Communication Monitor and evaluate performance of regulation REGULATION OTHER POLICY TOOLS • Design new regulation • Check current regulation Enforce regulation

19. E.U. European Better Regulation Mandelkern Predominantly legal Simplification Consultation standards 2002 Barroso I (2005) VP Verheugen Competitiveness test Admin Burden Reduction Progr. 2007-12 SME test Stoiber Group Barroso II (2010) Smart Regulation Fitness checks Cycle approach Integration of evaluation, infringements, complaints CH MONTIN, Pachuca (MX), 18 octubre de 2012

20. E.U. Better Regulatory Design (Mandelkern) Alternatives Consultation RIA FLOW Stakeholders The economy The Economy The Administration Admin burdens STOCK Access Simplification + Tools for ensure efficient implementation (including information, government forms, BPR, OSS, inspections) CH MONTIN, Pachuca (MX), 18 octubre de 2012

21. Increase social welfare through more effective social and economic policies Boost economic development by encouraging market entry and competitiveness Control regulatory costs and improve productive efficiency, particularly for SMEs Improve the rule of law , transparency and participative democracy world bank Goals of Regulatory Reform CH MONTIN, Pachuca (MX), 18 octubre de 2012

22. world bank Dimensions of the business environment CH MONTIN, Pachuca (MX), 18 octubre de 2012

23. How to present regulatory reform? CH MONTIN, Pachuca (MX), 18 octubre de 2012

24. Country best practices CH MONTIN, Pachuca (MX), 18 octubre de 2012

25. Part 3Opciones para México A look at the performance rankings: WEF and DB Mexico and the OECD Lessons from France with a focus on multi-level The world view

26. México en el GCI 2011- 2012 CH MONTIN, Pachuca (MX), 18 octubre de 2012

27. Mexico, CH MONTIN, Pachuca (MX), 18 octubre de 2012

28. WEF 2012-13 ranking: 53rd (+5) • competitivenessstrengths • deepinternalmarket (11th), • a soundmacroeconomicframework (40th), • good transport infrastructure (41st), • and fairlysophisticated businesses (44th). • persistent structural challenges • functioning of public administration (100th) • lack of security (137th • low trust of business in politicians (97th). • Inefficient (rigidities) labor (102nd CH MONTIN, Pachuca (MX), 18 octubre de 2012

29. Doing Business 2012: overall 53rd (+1)

30. Doing Business commends México Case study p. 32- 33 reports measurement ofresults from online one-stop-shop Tuempresa on number of registrations and reduction of corruption, as an example of multi-level cooperation to improve the business environment

31. México y la OCDE Regulatory review 1999 Regulatory review 2004 Public management review, including RIG “Practicas y politicas exitosas para promover la mejora regulatoria y el emprendimiento a nivel subnacional” (2010) Guia para mejorar la calidad regulatoria de tramites estatales y municipales e impulsar la competitividad de Mexico Regulatory review 2012 (on-going) CH MONTIN, Pachuca (MX), 18 octubre de 2012

32. 2004 Regulatory review CH MONTIN, Pachuca (MX), 18 octubre de 2012 • Took stock of progress made since the 1999 review • Ley federal de procedimiento administrativo • COFEMER (“oversight body”) develops tools • Options for the future • Extend regulatory policy to include tax policies, and coordination with subnational levels • Clearer hierarchy of regulations • Better use of regulatory tools (drafting, ICT, review) • Modernise framework of regulatory authorities

33. Best practices for multi-level BR and business “Practicas y politicas exitosas para promover la mejora regulatoria y el emprendimiento a nivel subnacional” (2010) Systematic review of regulatory and competitivity policies Policies and institutional arrangements Tools Ease of doing business (emprendimiento) Foreign examples of best practices from BC, Catalunya and Piemonte 36 recommendations

34. 2012 update from OECD • Build on strengths • Good transparency around RIAs & registries • Admin burden measurement results (calculator) • Review legislation focusing on high-impact texts • Extend use of RIA at earlier stages of policy and regulation, with minister signoff • Raise status of COFEMER and include advocacy • Align subnational BR on best performers and introduce coordination (like AUS COAG) • Introduce productivity screening CH MONTIN, Pachuca (MX), 18 octubre de 2012

35. Highlights from the French approach Developed within the European Better Regulation agenda, and the reform-of-the-state policy Emphasis on legislative stock management including quality drafting, publication and simplification Intensive policies improving relations with users including massive egov, quality of official forms and quality of service RIA made compulsory by constitution, to strengthen role of parliament CH MONTIN, Pachuca (MX), 18 octubre de 2012

36. Multi-level better regulation in France • Unitary state • Consistent hierarchical legal order • No regulation delegated to regions and other LA • Implementation powers for regions (economic) and départements (social) provide flexibility • Recent reforms • Redistribution and harmonization of functions • Moratorium on new legislation applicable to LA • Strengthened evaluation capacity in parliament • Screening of new legislation for additional burdens CH MONTIN, Pachuca (MX), 18 octubre de 2012

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39. To continue the study… • This presentation is online • http://montin.com/documents/mexico.ppsx • Updates on current events and trends: • http://smartregulation.net • Contact: • montin @ smartregulation.net • charles-henri.montin @ finances.gouv.fr CH MONTIN, Pachuca (MX), 18 octubre de 2012