Strategies for Simplifying Administrative Procedures: Lessons from OECD

1. Strategies for Simplifying Administrative Procedures:Lessons from OECD Charles-Henri Montin Senior regulatory adviser and representative to RPC Ministry of economy and finance (France) http://smartregulation.net C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

2. The « OECD  method » • Sharing best practice • Committee discussion and Secretariat research and synthesis • Official documents and reports • Country and thematic studies • Compiling comparative statistics • Government at a glance; indicators of regulatory performance • Reviewing national performance • Developing common guidelines: • « 2012 Recommendation on regulatory policy and governance » drafted by Regulatory Policy Committee of OECD • « 22 points for success » in « Overcoming Barriers to Administrative Simplification Strategies » C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

3. OECD material on simplification • Simplification: a tool of regulatory policy, part of administrative reform • Topic handled at OECD by: • The Secretariat: Public Governance Directorate, RP division • Member States: The Regulatory Policy Committee (RPC) & WGs http://www.oecd-ilibrary.org/governance/cutting-red-tape_19976674 C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

4. The economic approach to regulation • Qualitative evidence rare, focused on burden reduction programmes across OECD countries • Belgium, from EUR 8.57 billion (3.5% of GDP) in 2000 to EUR 5.92 billion (1.7% of GDP) in 2008 • Sweden, from EUR 10.5 billion in 2006 to EUR 9.75 billion in 2010 • Netherlands, saving of EUR 2.3 billion based on a in 11% net reduction in 2009 • United Kingdom, net savings of GBP 3.3 billion in 2010 expected • OECD cross country simulations find that convergence to best practice in product and labour markets could yield potential GDP gains of 5-10 percent over 10 years C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

5. Potential GDP gains from regulatory reforms (covering reforms of benefit, tax and retirement systems and product and labor market regulations) http://www.oecd-ilibrary.org/economics/raising-potential-growth-after-the-crisis_5kgk9qj18s8n-en C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

6. The impact of regulation on business • Regulation can create barriers to entry for new firms into markets • This influences the incentive to invest and innovate and ultimately affects productivity (WB Doing Business report) • Responding to administrative requests for information takes resources; • Small vs. large businesses • Small business bear a disproportionate share to the burdens of regulation (EU study for Small Business Act) • Changes in regulation • Business perceive repeated changes to existing regulations or new regulations as particularly burdensome • Stability in regulatory framework important as it allows effect learning on how to comply • Regulation can constrain the choice set of entrepreneurs and lead to a misallocation of resources (UK study); C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

7. How to simplify procedures • Generally, administrative simplification activities take 5 approaches • Better use of ICTs, including data exchange; • One-stop shops, process reengineering; • Reducing number of information obligations, licenses, permits; • Exemptions from information obligations, especially for SMEs; • Reducing reporting requirements. • Over the last 5 years many countries have used ambitious quantitative targets and applied the Standard Cost Model. Now moving to “regulatory costs” including compliance (see most recent EC communication 12/12/12) • Outcomes at times fell short of expectations: • a need to focus on the perception of reform results C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

8. Perception vs reality of simplification Absolute numbers vs. individual effects Irritation” factor Delays in visibility of reforms Cutting dead wood Focusing on small measures for a large number of regulated enterprises Lack of communication C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

9. New trends • Stem the flow • One-in one-out, regulatory moratorium, regulatory “budgets”, RIA • Check the stock: systematically review existing regulation (“closing the loop”) • Evaluate costs and benefits: example “fitness checks” (EC) • Evaluate simplification programmes for their “value for money” • Broaden scope of simplification beyond paperwork: • Include compliance costs; benefits and costs (fitness) of regulation • Integrate e-government initiatives with process reengineering, one-stop-shops and other programmes • Better legal support: simplified procedures embedded in streamlined legal corpus (codification and consolidation) • Smart Regulation C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

10. Simplification in modernization and public governance reform strategies • Avoid excessive reliance on simplification: • Avoid focusing S. efforts on admin burden on business and SCM • Need for a comprehensive regulatory reform strategy (S. “not a standalone objective”) • Adopt the governance perspective • Government must enlist other parties’ efforts: independent regulators, local authorities, civil society bodies, stakeholder organisations, etc • Need for stakeholder input at all stages of strategy • Implementation is as important as design • Preconditions • Political support is essential to develop regulatory policy. • resources (institutions and funds) must be appropriate to develop and maintain it. C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

11. Compléments • Rester au courant: le blog « qualité réglementaire »: http://smartregulation.net • OCDE: « Eliminer la paperasserie: des stratégies nationales pour simplifier les formalités administratives » (2007): synthèse et rapport complet • OCDE « Eliminer la paperasserie - Pourquoi la simplification administrative est-elle si compliquée? » Novembre 2010 • OCDE « Mieux Légiférer en Europe: série des monographies nationales dont France 2010 » (mai 2010.) • Ecrire à l’auteur: charles-henri.montin@finances.gouv.fr C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013

12. Thank you C.H. MONTIN, Sciences-Po Chaire MADP, 16 janvier 2013