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Taipei – 28 August 2012
Regulatory Policies in support of National Competitiveness
Lessons from around the world
Charles-Henri Montin, Senior Regulatory Expert,
Ministry of economy, finance and industry, Paris, France
Delegate of France to RPC
http://smartregulation.net
CH MONTIN,Taipei, 28 August 2012
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
Part one: How regulatory reform can support competitiveness
Approaches to competitivenessRegulation in society and the
economyWhat is quality regulation?Measuring competitiveness
CH MONTIN,Taipei, 28 August 2012
Drivers or competitiveness
NC
Stable environme
nt
Quality infrastruct
ure
Efficient competitio
nCluster
development
Corporate sophistica
tion
CH MONTIN,Taipei, 28 August 2012
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
The main areas of regulation in support of competitiveness
• Reduce costs of doing business
• Provide well-run public services
• Provide stable background
• Preserve efficient market operation
Market rules
Institutions
Business environme
nt
infrastructure
CH MONTIN,Taipei, 28 August 2012
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
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
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
Part 2Varieties of regulatory reform
The growth and control of regulation
The three ages of regulatory quality
International and national approaches
CH MONTIN,Taipei, 28 August 2012
From regulation to better regulation
From Jacobs & Associates
CH MONTIN,Taipei, 28 August 2012
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
2012 OECD Recommendation on Regulatory Policy and Governance (1)
Adopt explicit policy for regulatory quality. Apply open government, consultation Oversee procedures and goals of regulation to
foster quality. Integrate RIA into the early stages of the policy
process 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
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 enforcement strategies.
Co-ordination mechanisms between levels of government to promote coherence of regulations.
Develop regulatory management capacities at sub-national levels of government.
Give consideration to all relevant international standards and frameworks for co-operation
CH MONTIN,Taipei, 28 August 2012
Regulatory managementCommand &
ControlDue process Consistent
legallyAccessible
Inform stakeholders
RegulatoryReform (1995)
EffectiveEfficient
Competitive
Consult stakeholders
Regulatory governance
(2010)
Integrated objectives
Cycle approachIncl. M&E
Involve stakeholders
BR ≠ DeregulationBR = dynamic LT process acting on policies, institutions
and tools
The three ages of regulatory quality
GOOD BETTER SMART
CH MONTIN,Taipei, 28 August 2012
One objective, three approaches
OECD
Regulatory policy
Think tankBest practice
forum
Market orientation
Public management
European Union
Better/Smart Regulation
SupranationalManage ‘Acquis communautaire’
SubsidiarityTransposition
Process-oriented
Inter-institutional
World Bank Group
Business climateDoing Business
(outcomes)
Development technical
assistance One stop shops
LicensingReg. guillotine
CH MONTIN,Taipei, 28 August 2012
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
Policy issues for government
actionDevelop policy
roadmap- choose the
policy instrument(s)
• Design new regulation
• Check current regulation
Enforce regulation
Monitor and evaluate
performance of regulation
REGULATION
OTHERPOLICYTOOLS
The 4 Cs
Consultation
Co-ordination
Co-operation
Communication
‘Regulatory Governance Cycle’
CH MONTIN,Taipei, 28 August 2012
European Better Regulation
Mandelkern
Predominantly legal
SimplificationConsultation
standards 2002
Barroso I (2005)
VP VerheugenCompetitiveness
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
Better Regulatory Design (Mandelkern)
Consultation
Access
AlternativesRIA
Admin burdens
SimplificationSTOCK
Stakeholders
The E
conomy
The Administration
+ Tools for ensure efficient implementation (including information, government forms, BPR,
OSS, inspections)
FLOW The econom
y
CH MONTIN,Taipei, 28 August 2012
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
Goals of Regulatory Reform
CH MONTIN,Taipei, 28 August 2012
Dimensions of the business environment
Administrative “One stop shop”, single window, inspections, licensing, standardized forms and corporate documents
Legal Commercial code, company law, collateral law, bankruptcy, labor law, infrastructure laws, PPP
Judicial Court procedure, case management, performance of judges
Electronic services (eGov)
Company/collateral registry, Credit bureau, Electronic signature, single ID, Paying taxes, Legal portal
Tax and Subsidies
Corporate tax, VAT, social contribution, registration duties, selective interventions
CH MONTIN,Taipei, 28 August 2012
How to present regulatory reform?
Deregulation, Reducing regulation• Korea, Taiwan, UK (2011), NZ
Improving business climate, reducing administrative burdens• Australia, Netherlands, Belgium, Singapore
Better Regulation• UK, European Union, Ireland
Fighting bureaucracy• Germany
Administrative simplification• France, Italy, Portugal, Viet Nam
Regulatory reform• OECD, World Bank, US, ¨PR China, Poland, Netherlands,
Thailand
CH MONTIN,Taipei, 28 August 2012
Country best practices
Transparency and open government• Denmark, Finland, Norway, US
Quantifying regulatory costs• Australia, NL, UK, US
Multilevel governance• Italy, Mexico
Simplification, one-stop-shop• Austria, Belgium, Mexico
Independent advisory bodies• Germany, NL, UK, Sweden
Part 3Options for Chinese Taipei
Impressive competitiveness resultsBut other economies are pursuing
RRChinese Taipei must reform its
regulatory implicit policies andpractices
CH MONTIN,Taipei, 28 August 2012
Taiwan in the GCI
CH MONTIN,Taipei, 28 August 2012
Taiwan in the GCI 2011- 2012
CH MONTIN,Taipei, 28 August 2012
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
Doing Business approach
. Taiwan, China
OVERALL RANKING (2012): 25
CH MONTIN,Taipei, 28 August 2012
Taiwan’s comparative position
CH MONTIN,Taipei, 28 August 2012
Taiwan’s comparative position (DB)
2012 2011
Hong Kong 2 2
Taiwan, China
25 24
China 91 87
CH MONTIN,Taipei, 28 August 2012
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
Problematic factors of doing business
CH MONTIN,Taipei, 28 August 2012
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
A menu for launching regulatory reform
•Review current policies and practices•Adopt regulatory policy (statement)
Appetizers
• Set up/ strengthen institutions
• Develop capacities (priority: RIA)
Starters
• Launch review of existing law
• Implement tools: RIA, and others
Mains
• Monitor and report progress
• Communicate to sustain reform
Desserts
CH MONTIN,Taipei, 28 August 2012
Country Most original objective or content
Notable Institutions or tools
USRegulatory Reform
*Regulatory review, CBA, *challenge function
OIRAExecutive Order
UKReducing Regulation
*Principles; Policy statement, *RIA, *one-in one-out*local delivery; consultation
BREBRDO
CanadaSmart Regulation
*Multi-level coordination, international dialogue
Treasury Board
FranceQualité du droit
*Quality legal drafting; curbing overproduction of norms, SME policy;
Conseil d’Etat Legifrance
GermanyReducing bureaucracy
Reduction of *regulatory costs Normenkontrollrat
NetherlandsRegulatory reform
*Reduction of administrative burdens, e-company
ACTAL
BelgiumHuman Rules
*Small scale solutions to practical problems
CH MONTIN,Taipei, 28 August 2012
Australia Best practice regulation
*Deregulation Policy Productivity Commission
Russian Federation
Regulatory Reform
RIA BR Council (tbc)
Mexico Regulatory Reform
Red Tape, sub-national BR COFEMER
Taiwan, China
Regulatory Reform
National competitiveness, *Doing Business ranking
EU Better Regulation (2002)Smart Regulation (2010)
*RIA, Streamlining acquis communautaire, cutting red tape, *consultation, *ex post evaluation (2010)
IAB, Stoiber Group
OECD Regulatory Governance
Reviews of national capacities
Recommendation for regulatory policy
World Bank
Regulatory Reform
Improving business and investment climate
Doing Business report
CH MONTIN,Taipei, 28 August 2012
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
