Taipei – 28 August 2012

1. Regulatory Policies in support of National Competitiveness Lessons from around the world Taipei – 28 August 2012 Charles-Henri Montin, Senior Regulatory Expert, Ministry of economy, finance and industry, Paris, France Delegate of France to RPC http://smartregulation.net

2. Contents • How regulatory reform can contribute to competitiveness • Varieties of regulatory reform experience (one faith, many chapels) • How can Chinese Taipei tap the competitiveness potential of regulatory reform CH MONTIN,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 2012

6. The main areas of regulation in support of competitiveness CH MONTIN,Taipei, 28 August 2012

7. What is quality regulation? • 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) • Necessary • Clear/ accepted • Light (costs) • Well targeted • Stable • Proportional • Well applied CH MONTIN,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 2012

13. 2012 OECD Recommendation on Regulatory Policy and Governance (1) • Adopt explicit policy for regulatoryquality. • Apply open government, consultation • Oversee procedures and goals of regulation to foster quality. • Integrate RIA into the early stages of the policyprocess • 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,Taipei, 28 August 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 enforcementstrategies. • Co-ordination mechanisms between levels of government to promote coherence of regulations. • Developregulatory management capacitiesatsub-national levels of government. • Giveconsideration to all relevant international standards and frameworks for co-operation CH MONTIN,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 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 CH MONTIN,Taipei, 28 August 2012

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,Taipei, 28 August 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,Taipei, 28 August 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,Taipei, 28 August 2012

22. world bank Dimensions of the business environment CH MONTIN,Taipei, 28 August 2012

23. How to present regulatory reform? CH MONTIN,Taipei, 28 August 2012

24. Country best practices CH MONTIN,Taipei, 28 August 2012

25. Part 3Options for Chinese Taipei Impressive competitiveness results But other economies are pursuing RR Chinese Taipei must reform its regulatory implicit policies andpractices

26. Taiwan in the GCI CH MONTIN,Taipei, 28 August 2012

27. Taiwan in the GCI 2011- 2012 CH MONTIN,Taipei, 28 August 2012

28. Comment from GCI Taiwan, China remains stable in 13th position, profile nearly unchanged Consistent performance across the pillars of the GCI, • Assets • innovation (9th) • quality and presence of business clusters in high-end manufacturing, first-class R&D, • excellent educational system, • high level of technological readiness (24th) and well-developed infrastructure, with the exception of air transport (51st). • Weaknesses: • rigidity of labor rules (118th, deteriorating) causes inefficiency of market (33rd), • public and private institutions (31st), but improving. CH MONTIN,Taipei, 28 August 2012

29. Doing Business approach OVERALL RANKING (2012): 25 . Taiwan, China CH MONTIN,Taipei, 28 August 2012

30. Taiwan’s comparative position CH MONTIN,Taipei, 28 August 2012

31. Taiwan’s comparative position (DB) CH MONTIN,Taipei, 28 August 2012

32. Taiwan’s assets in global competition • Highly innovative • Strong intellectual property protection • Entrepreneurial • Flexible business culture reacts rapidly • Large pool of researchers • Strong science and technology education, research institutions • Some deep technology clusters in closely related industries • Logistics strengthened In past 10 years • Strong outbound FDI • Gateway to China: strongest democracy, freedom of speech of any Chinese-speaking BUT … CH MONTIN,Taipei, 28 August 2012

33. Problematic factors of doing business CH MONTIN,Taipei, 28 August 2012

34. Further reasons to engage in RR • Risks affecting all economies • Ever more complex policies (green growth, climate, etc • Fierce competition (need to keep pace) • Impact of the crises (stress test of governance) • Opportunities • Regulation: the most promising remaining factor • The least expensive reform (leverage effect • APEC cooperation and mutual expertise • OECD-APEC dialogue CH MONTIN,Taipei, 28 August 2012

35. A menu for launching regulatory reform CH MONTIN,Taipei, 28 August 2012

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38. To continue the study… • This presentation is online • http://montin.com/documents/taipei2012.ppsx • Updates on current events and trends: • http://smartregulation.net • Contact: • montin @ smartregulation.net • charles-henri.montin @ finances.gouv.fr CH MONTIN,Taipei, 28 August 2012