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Challenges in regulatory reform:
Can the U.S. learn from other
countries?
Scott Jacobs
Managing Director
The Future of Regulations: Moving From Presumption to Proof
Tuesday, November 13, 2012
Mercatus Center at George Mason University
2
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3. www.regulatoryreform.com
When governments lose control of regulation,
the rule of law erodes
“We built a world of bureaucracy and lust for
power. A world of corruption, of small and big
privileges and interests for anyone who could
take advantage of other people.“
-- Greek Prime
Minister George
Papandreou, 11
September 2010,
announcing a
deregulation program
3
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4. www.regulatoryreform.com
Price controls
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5. www.regulatoryreform.com
The global spread of RIA
30
Number of Countries Adopting RIA
25
20
15
United States
10
5
0
1970 1980 1990 2000 2010
OECD Countries Non-OECD Countries
5
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6. www.regulatoryreform.com
European Commission Impact Assessment on periodic
technical inspections of motor vehicles (2011)
Addi/onal
jobs
Mone/zed
benefit/
Cost
(€mn)
Benefit
(€
mn)
(compared
to
cost
ra/o
previous
op/on)
Op#on
1
0.28
184
656:1
0
Op#on
2a
459.5
1622
3.53:1
1,450
Op#on
2b
3347
5623
1.68:1
13,450
Op#on
2c
9227
7027
0.76:1
46,260
Op#on
3a
460
1806
3.93:1
1,450
Op#on
3b
3347
5807
1.73:1
13,450
Op#on
3c
9227
7211
0.78:1
46,260
6
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7. www.regulatoryreform.com
What can the US learn?
Four reforms from other countries
n Inter-institutional cooperation on regulatory
reform
n Cleaning up old regulations - effective regulatory
review
n A national reform program in a federal system
n Managing cumulative regulatory burdens
7
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8. www.regulatoryreform.com
Cleaning up the regulatory stock:
Various tools
n Ad hoc self-reviews by regulators: no real gains anywhere
n Regulatory Guillotine reviews or other approaches to using
independent expert bodies to review rules – see South Korea
n Replace old costs with new costs: Remove one regulation for each
new one that is proposed -- UK – one in, one out
n Create a truly independent scorer for regulatory costs and benefits,
modeled on the Congressional Budget Office
n Creating a full-time advocate for regulatory rollback -- Kansas
created an “Office of the Repealer” that aggregates complaints and
suggests repeals to the governor and legislature. No repeals yet,
though.
n Automatic “sunsets” of laws – little success in other countries
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Economic Impacts of Regulatory
Guillotine reform in South Korea
South Korea
% business regulations deleted: -49%
New Jobs created: +1,066,200
Business cost savings: +4.4% of GDP
Increased FDI: $36.5 billion in new FDI
Korean numbers are projections. Source: Byung Ki Ha(1999), The Economic Effects of Korea’s Regulatory Reform (in Korean), KIET.
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Cumulative and interactive effects: USA
10
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