There is scope for Ireland to improve its regulatory performance according to statistics produced recently by the OECD. The statistics are contained in the recently published ‘Better Regulation Practices across the European Union, 2019’. This report was prepared by the OECD at the invitation of the European Union  http://www.oecd.org/publications/better-regulation-practices-across-the-european-union-9789264311732-en.htm

 

Why improve Regulation Policies?

Laws and regulations affect the daily lives of businesses and citizens. High-quality laws promote national welfare and growth, while badly designed laws hinder growth, harm the environment and put the health of citizens at risk. The introduction to the OECD Report points out that  – “… Countries need to strengthen their regulatory processes and the institutions involved. At a time of fiscal stringency and heightened global uncertainty, regulatory policy remains a key government tool for ensuring the safety and well-being of citizens while stimulating innovation and economic growth and prosperity , Despite some improvements much work remains to be done to reap the rewards of better regulation”. http://www.oecd.org/publications/better-regulation-practices-across-the-european-union-9789264311732-en.htm

 

The OECD’s Scoring System

The OECD uses three main indicators to measure regulatory performance:-

  • An indicator on Regulatory Impact Assessment (RIA);
  • An indicator on Stakeholder Engagement and
  • An indicator on Ex-post Evaluation, i.e. reviewing performance.

In turn, each of these indicators has four components:

  • Methodology: how good or bad is the methodology used for RIAs;
  • Oversight: If there is an oversight body, how effective is it;
  • Adoption: How consistently are RIAs undertaken, and
  • Transparency: To what extent are results of RIAs made publicly available.

The maximum score for each component is one and the maximum score for each aggregate indicator is four. A perfect country could score twelve points i.e. three times four. No such score has ever been recorded by any Member State.

 

Ireland’s Performance for RIAs

Table 1 reproduces the OECD scores, for 2014 and 2017, for Ireland’s performance of in the area of Regulatory Impact Assessment (RIA). The overall results show Ireland achieving a “good pass”, but not an “honours” result in both years. It is interesting to note that where Ireland achieved an aggregate result of 2.09 in 2017, the European. Union achieved an aggregate result of 3.28. Put differently, Ireland only achieved 64 per cent of the EU result in 2017.

Table 1: IRELAND – Regulatory Impact Analysis for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.72 0.73 0.01
Oversight 0.19 0.15 -0.04
Adoption 0.80 0.80 0.00
Transparency 0.41 0.41 0.00
Aggregate 2.12 2.09 -0.03
Note: Maximum score of 1 for each category and
maximum score of 4 for the aggregate of four categories

 

Ireland’s Performance under Stakeholder Engagement

Engaging with those concerned and affected by regulations is fundamental if the quality of regulations is to be improved. OECD now produces statistics on stakeholder engagement. Table 2 reproduces OECD scores for Ireland on stakeholder engagement in 2014 and 2017. The results are quite disappointing. Where Ireland achieved an aggregate result of 1.7 in 2017, the European. Union achieved an aggregate result of 3.41. Put differently, Ireland only achieved half of the EU result for stakeholder engagement in 2017.

 

Table 2: IRELAND – Stakeholder Engagement for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.44 0.44 0.00
Oversight 0.00 0.25 0.25
Adoption 0.62 0.62 0.00
Transparency 0.31 0.39 0.08
Aggregate 1.37 1.70 0.33
Note: Maximum score of 1 for each category and
maximum score of 4 for the aggregate of four categories

 

Ireland’s Performance under Ex-post Evaluation

Only after laws have entered into force can governments assess their full effects on society. Conditions change over time and even regulations can become outdated. Accordingly, the OECD advises countries to regularly review their stock of existing regulations. For its part, the OECD measures the extent to which countries carry out ex-post evaluations. Table 3 reproduces OECD scores for Ireland for ex-post evaluations in 2014 and 2017. The aggregate results are extremely low, with some components actually recording zero results.  Where Ireland achieved an aggregate result of 0.79 in 2017, the European. Union achieved an aggregate result of 3.08. Put differently, Ireland only achieved a quarter of the EU result for stakeholder engagement in 2017

 

 

Table 3: IRELAND – Ex-post Evaluation for Primary Laws
Category Year 2014 Year 2017 Change
Methodology 0.00 0.00 0.00
Oversight 0.00 0.17 0.17
Adoption 0.43 0.49 0.06
Transparency 0.13 0.13 0.00
Aggregate 0.56 0.79 0.23
Note: Maximum score of 1 for each category and maximum score of 4 for the aggregate of four categories

 

Scope for improvement

There is certainly scope for Ireland to improve its regulatory performance if Ireland’s scores, as published by the OECD, are accepted as reflecting actual performance. In the text accompanying the statistics, the OECD notes that – “ Ireland recently made some improvements to its regulatory policy system, particularly in the areas of consultation and ex post evaluation”. However, it suggests that – “ In order to more effectively monitor and assess the quality of RIA implementation, Ireland should consider establishing a central oversight body”. This suggestion of having an oversight body was also made recently by The Law Reform Commission – see my blog https://www.pai.ie/is-there-a-need-for-a-regulatory-guidance-office/ . While the advent of a robust oversight body would be helpful, it would be only one of a number of things that needs to be done to improve regulatory performance across the public sector. The overall objective should be one of designing, developing and delivering good regulatory policies for all citizens.

 

Tom Ferris is a Consultant Economist specialising in Better Regulation. He lectures on a number of PAI courses and contributes blogs regularly to PAI. He was formerly the Senior Economist at the Department of Transport.

 

Tom Ferris