Chapter 29: Regulatory Impact Assessment: Ambition, Design and Politics
Kai Wegrich When drafting policy proposals, politicians and bureaucrats have to strike a balance between two dimensions of the task. They have to engage with issues of political desirability and feasibility and at the same time develop a ‘technically’ sound policy proposal. The latter part of the task is increasingly subject to rules and standards that prescribe procedures and analytical methods of drafting regulations. Bureaucrats are required to conduct or commission a cost–benefit analysis or other forms of economic analysis. They are required to take these into account when advocating their preferred regulatory response. This activity is called (regulatory) impact assessment (RIA/IA, also regulatory impact analysis). In the last three decades, RIA has become a key tool of ‘regulatory reform’ or ‘better regulation’ and has been widely diffused internationally. Although its history can be traced back longer, RIA is usually considered to have originated in the US. More specifically, President Reagan’s 1981 executive order no. 12291 is seen as the original version of a governmental regulation establishing RIA as a mandatory element in government rulemaking. Since then, RIA has diffused across first Western Europe and then the wider OECD world (OECD 2009: 15). More recently, transition and developing countries have emulated these reforms, with the encouragement of international organisations such as the OECD and the World Bank. Combined with the unbiased consultation of societal actors, the economic analysis of regulatory options should enhance the quality of government regulation in generally all regulatory domains. In an ideal world, the selection...
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