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Smart Regulation by Professor Robert Baldwin: Understanding Good vs. Excellent Regulation

Explore the insights of Professor Robert Baldwin from LSE on the nuances of 'good' versus 'excellent' regulation, covering aspects such as reputation costs, business uncertainties, and the mandate of regulators. Learn about the role of expertise, trust, fairness, efficiency, and accountability in regulatory frameworks. Delve into the hallmarks of an excellent regulator and the agenda for achieving better regulation. Discover key principles, tools, and challenges in impact assessment for creating smarter regulations. Unpack technical challenges, expert judgments, and the quest for rational decision-making in regulatory processes. Consider the impact on policy and legislative processes, the balance between accountability and expertise, and the pursuit of wealth maximization efficiency. Compare expert and lay risk priorities, explore solutions proposed by Breyer and Sunstein, and address general challenges in regulatory impact assessments. Explore the potential for producing better and smarter regulations in the dynamic regulatory landscape.

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Smart Regulation by Professor Robert Baldwin: Understanding Good vs. Excellent Regulation

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  1. GOOD, EXCELLENT AND SMART REGULATION Professor Robert Baldwin LSE 0

  2. PART I: WHAT ‘GOOD’ REGULATION LOOKS LIKE Which three aspects of regulation do you think small companies dislike most? 1. Reputational costs of being inspected/sanctioned 2. Form filling, providing information 3. Reductions in productivity 4. Diversion of staff from wealth creation 5. Paying for compliance actions (e.g. fitting the filters) 6. Business uncertainties due to changing regulations 7. Costs of licences, registrations, inspection charges etc. 8. Restrictions on entry to new markets 9. Delays in developing new products

  3. Claiming to be a good regulator: THE MANDATE —      VAGUENESS —        DISCRETION ECONOMIC AND SOCIAL READINGS OF MANDATES 2

  4. EXPERTISE •    TRUST •     EXPLANATION •      LANGUAGE •      DISAGREEMENTS •      RESULTS 3

  5. ACCOUNTABILITY •    TO WHOM? •    REPRESENTATIVE? •    COSTS 4

  6. FAIRNESS/DUE PROCESS •      HOW MUCH? • COSTS 5

  7. EFFICIENCY • AT WHAT? • PURE EFFICIENCY? 6

  8. THE CONTENTIOUSNESS OF LEGITIMATION •        INHERENT •        MINISTERS AND AGENCIES 7

  9. BETTER REGULATION TASK FORCE PRINCIPLES • OF BETTER REGULATION •            TRANSPARENCY •             ACCOUNTABILITY •             TARGETING •             CONSISTENCY •              PROPORTIONALITY 8

  10. EXCELLENCE IS BEING: PART II: THE HALLMARKS OF THE EXCELLENT REGULATOR AWARE INTELLIGENT DYNAMIC

  11. AWARE SETTINGS OPTIONS CHALLENGES

  12. INTELLIGENT • WELL-INFORMED • PERFORMANCE SENSITIVE • ABLE TO EXPLAIN

  13. DYNAMIC • ABLE TO ADAPT TO CHANGE • ASSURANCE ABOUT CONTINUITY

  14. KEY ACTIVITIES • SETTING OBJECTIVES (MANDATE) • DELIVERING SUBSTANTIVE OUTCOMES (MANDATE, EFFICIENCY) • SERVING REPRESENTATIVE VALUES (ACCOUNTABILITY, DUE PROCES, EXPERTISE)

  15. THE AGENDA OF EXCELLENCE

  16. PART III: THE SEARCH FOR BETTER REGULATION AND THE ROLE OF IMPACT ASSESSMENT? • FROM DEREGULATION AND RED TAPE CUTTING TO • BETTER REGULATION • OECD: REGULATORY REFORM (1997) • POLICIES • INSTITUTIONS • TOOLS 15

  17. THE TOOLKIT RIAs (SEE BELOW) CONSULTATIONS AND TRANSPARENCY REDUCING BURDENS AND RED TAPE ENFORCEMENT GUIDELINES ALTERNATIVES SUNSET PROVISIONS REVIEWS 16

  18. COST-BENEFIT TESTING AND ITS APPLICATION TO REGULATION • Technical challenges • Impact on policy and legislative processes • Will better regulation be produced? 17

  19. 1. TECHNICAL CHALLENGES 18

  20. CLAIMS FOR APPRAISALS • GOALS MADE ARTICULATE • ALTERNATIVES CONSIDERED 19

  21. UNPACKS EXPERT JUDGEMENTS • OBJECTIVE LOOK AT COSTS

  22. KEEPS RULEMAKING OPEN • ENCOURAGES ACCESS • AVOIDS EARLY CLOSURE OF OPTIONS • IDENTIFIES INFORMATION NEEDS • ENHANCES EFFECTIVENESS • PRODUCES ‘RATIONAL’ DECISIONS AND RULES 21

  23. MANDATE CONFLICT WITH STATUTES 22

  24. ACCOUNTABILITY, DUE, PROCESS, EXPERTISE • OBSCURING POLICY • PRIVILEGED ACCESS • CLOSING OPTIONS • DIFFUSION OF ACCOUNTABILITY AND APPRAISERS’ AGENDAS 23

  25. VALUE INTRUSION (WEALTH MAX)

  26. EFFICIENCY • CBA’S PROBLEMATIC INFORMATIONALLY (DATA IN REGULATORY SECTOR?) 25

  27. It’s the most famous photograph in thehistoryof motorcycling. The doughy figure, wearing just swim trunks, canvas sneakers and a pudding- • DISPLACEMENT (Bonneville Salt Flats September 1948: Rollie Free sets a motorcycle land-speed record of 150.313 mph on his Vincent Black Shadow.)

  28. DATA AND CAPTURE • DISTRIBUTION OF COMPLIANCE

  29. MEASURING BENEFITS • ADMINISTRATION COSTS • RESISTANCE • DELAY • FEEDBACK 28

  30. EXPERT VERSUS LAY RISK PRIORITIES Problems of Preference and Bias: Voluntary risk? Dread Newness Availability Immediacy (temporal) Associated pleasure Social factors (cascades and amplification) Disinformation (news values) Do experts know better? Solution: Breyer or Sunstein?

  31. GENERAL RIA PROBLEMS (NAO, BCC) -   OBJECTIVES -     DO NOTHING -     QUANTIFICATION -     BUSINESS COSTS + SMES - COMPLIANCE 30

  32. 2. IMPACT ON POLICY AND LEGISLATIVE PROCESSES MANIFESTO/COMMITMENT EUROPE SOFT RIAS SECONDARY LEGISLATION LATE CHANGES PREDICTING USE OF POWERS 31

  33. 3. WILL BETTER / SMARTER REGULATION BE PRODUCED? 32

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