Recent regulatory reform initiatives in Hungary

1. Recent regulatory reform initiatives in Hungary ‘Better regulation’ activities Krisztián Orbán Warszawa, 9th October, 2006

2. introduction I. • dual situation: appropriate legislative background but incomplete realization in many aspects • Act XI of 1987 on Legislation • appropriate basis for Better Regulation activities • not realized to the desirable degree • Governmental Decision No. 1088/1994. (IX. 20.) on the Rules of Governmental Procedures • determines the impact analysis principles to be followed in the case of any governmental initiatives • Minister of Justice also has the obligation to co-ordinate the impact assessment activity

3. introduction II. – recent situation • overregulation • level of administrative burdens too high • state task limits too wide • regulatory system: • lacking transparency of law preparation and inner & outer coherence • parallel regulation • law-making process lacking quality assurance functions (filters) • determination of the need to regulate is intuitive

4. introduction III. • radical change of point of view is needed: • law-makers’ intention cannot be formulated by intuitions instead of evidences • background materials not aiming at being fully objective • easily emerging overregulation is strengthened by the regulative point of view • no-nothing option (no regulation) • alternative regulatory tools • avoidance of unnecessary administrative burdens • protection of the “own” regulations of the ministries - inhibiting the simplification efforts

5. directions of the Hungarian regulatory initiatives • State Reform Committee was set up • Led by governmental commissioner dr. Tibor Draskovics • reform ideas to be prepared based on the Government’s Convergence Plan • reform of the tax system • reform of the pension system • reform of the health care system • deregulation (mainly technical simplification) • transformation, simplification of the institutional system of the state administration • Regulatory Reform WG (sub-WG of the SRC) was set up in August

6. Regulatory Reform WG I. • regulatory experts from different ministries • direction of the regulatory reform: • simpler, cost-effective and more transparent regulation assuring competitiveness and available quality public services • transformation of regulatory procedures regarding democratic participation, availability and quality requirements • developing the coherency between different policies and governmental measures • better HR and technical conditions supporting reg. procedures

7. Regulatory Reform WG II. • main purpose of the WG: to have a comprehensive quality assurance system integrated in the legislative procedures, which • forecasts regulatory effects w/ RIAs • assures stakeholder opinions to be integrated • assures effective of law-making w/ different monitoring systems • assures that regulations generate only the necessary level of ABs for the affected • continuously organizes the required resourced for the above mentioned procedures

8. Regulatory Reform WG III. • intervention areas: • direct intervention into the ‘regulatory mass’ – technical & substantive deregulation • up-to-date and state-of-art law registration systems • appropriate consultation mechanisms w/ social and business partners • programs to cut ABs in business and non-business sector

9. integration of BR in different phases of law-making I. • ‘need of regulation’ phase • ex-post RIAs and consultation [feedbacks: social, economic needs (e.g.: paragraph pillory project)] • ex-ante RIAs and ‘substantive deregulation’ points-of-view needed to be general requirements • comprehensive, structured programming of regulatory tasks (wide range utilization of the law-harmonization database of the ministry) • ‘legislative preparatory’ phase • preparation of regulatory conception: RIAs (including scenario-analysis), alternative regulatory tools • codification: up-to-date Codification Manual, codification trainings for affected public servants

10. integration of BRin different phases of law-making II. • ‘quality test of legal drafts’ phase • ex-ante RIAs • AB filters • filtering logical/linguistic incoherencies • consultation: inner and outer (social partners) • analyses from constitutional and EU law aspects • jurisdiction • ex-post RIAs • AB benchmarks • feedbacks

11. Better regulationin the MoJ&LE • Dept. of Deregulation and Reg. of Law • strong co-operation with SRC&RRWP • RIA co-ordination (8001/2006 Information Note of the MoJ) • ABR programs • ‘social benchmarking’ w/ SCM in process (Act on Family Support) • citizens’ AB benchmarking project (1st October, 2006 – 31st December, 2007) • not full range, only focused benchmarks on sensible target groups (parents bringing up children, elders, permanently ill and disabled people) • laws, government and ministerial decrees • RIA monitoring system • systematic scan of all governmental submissions • using the indicators of the EC • trends, recommendations for the ministries • administrative burden point-of-view analysis of all drafts • internet forum on Better regulation • paragraph pillory project

12. Better regulation futurein the MoJ&LE • IT support in more and more possible fields of law preparation • introduction of e-PreLEX system (communication & task management system between the Gov. Office & Dept.) • KIR3 (document-management & registration system + real time statistics + bar codes) • Extension of the scope of the RIA monitoring system • complete baseline benchmark • possibly funded by SRC • possibly co-ordinated by the Dept. of Deregulation • adhoc ABR programs (focus mainly on ‘low-hanging fruits’) • urgent need of publishable results

13. summary • radical change was needed • key actors of regulatory reform • SRC, RRWP, Dept. of Deregulation & Reg. of Law • main purpose: to have a comprehensive quality assurance system integrated in the legislative procedures • integration of better regulation tools to all phases of law preparation • better regulation in the MoJ&LE • ABR programs (4-phase social benchmark, complete baseline) • RIA support for ministries • RIA monitoring