Presentation by Manuel Cabugueira, Legal Centre of the Presidency of the Council of Ministers (CEJUR), Portugal, at the 9th Conference on Measuring Regulatory Performance - Closing the Regulatory Cycle: Effective ex post Evaluation for Improved Policy Outcomes which took place in Lisbon on 20-21 June 2017. Further information is available at www.oecd.org/gov/regulatory-policy/measuring-regulatory-performance.htm.
1. Evaluation methods for
improved policy outcome
Manuel Cabugueira
Technical Unit for Legislative Impact Assessment (UTAIL)
Legal Centre of the Presidency of the Council of Ministers (CEJUR)
Disclaimer: All responsibility for any opinion, information and views set out in this presentation lies entirely with the authors.
The impact assessment in Portugal:
“How much?”
2. 20/06/2017 2
Plan for the presentation
‒ Introductory comments on the Evaluation and political outcome
‒ The impact assessment in Portugal: the “How much?” program
‒ Final comments on the Evaluation and political outcome
4. Evaluation and political outcomes
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Economic (linear) perspective on political intervention and
aspirations regarding the outcome
Public
necessity
Market failure?:
• Externalities?
• Information?
• Scale
• (Political?)
Is there a
market
response?
Public
intervention
Efficiency
Economic growth
(Sustainable?)
Welfare
Is Public
intervention
necessary,
efficient?
Regulatory
Impact
Assessment
(as an analytical
and decision
support instrument)
5. Evaluation and political outcomes
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1. Commit at the highest political level to an explicit whole-of-government policy for regulatory quality.
2. Adhere to principles of open government, including transparency and participation in the regulatory process to ensure that regulation serves the public interest
and is informed by the legitimate needs of those interested in and affected by regulation.
3. Establish mechanisms and institutions to actively provide oversight of regulatory policy procedures and goals, support and implement regulatory policy, and
thereby foster regulatory quality.
4. Integrate Regulatory Impact Assessment (RIA) into the early stages of the policy process for the formulation of new regulatory proposals.
5. Conduct systematic programme reviews of the stock of significant regulation against clearly defined policy goals, including consideration of costs and benefits,
to ensure that regulations remain up to date, cost justified, cost effective and consistent, and deliver the intended policy objectives.
6. Regularly publish reports on the performance of regulatory policy and reform programmes and the public authorities applying the regulations.
7. Develop a consistent policy covering the role and functions of regulatory agencies in order to provide greater confidence that regulatory decisions are made on
an objective, impartial and consistent basis, without conflict of interest, bias or improper influence.
8. Ensure the effectiveness of systems for the review of the legality and procedural fairness of regulations and of decisions made by bodies empowered to issue
regulatory sanctions.
9. As appropriate apply risk assessment, risk management, and risk communication strategies to the design and implementation of regulations to ensure that
regulation is targeted and effective.
10. Where appropriate promote regulatory coherence through co-ordination mechanisms between the supranational, the national and sub-national levels of
government.
11. Foster the development of regulatory management capacity and performance at sub-national levels of government.
12. In developing regulatory measures, give consideration to all relevant international standards and frameworks for co-operation in the same field and, where
appropriate, their likely effects on parties outside the jurisdiction.
(2012) RECOMMENDATION OF THE OECD COUNCIL ON REGULATORY POLICY
AND GOVERNANCE
6. Evaluation and political outcomes
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Portuguese profile on the OECD Regulatory Policy Outlook 2015
7. Evaluation and political outcomes
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RIA at the center of “Better Regulation”
Better Regulation covers the whole policy cycle – policy
design and preparation, adoption; implementation
(transposition, complementary non-regulatory actions),
application (including enforcement), evaluation and
revision. For each phase of the policy cycle, there are a
number of Better Regulation principles, objectives, tools
and procedures to make sure that the EU has the best
regulation possible. These relate to planning, impact
assessment, stakeholder consultation, implementation
and evaluation.
Better Regulation in the Commission
http://ec.europa.eu/smart-regulation/guidelines/ug_chap1_en.htm
9. Background (I)
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Government’s Programme
• Ex ante impact assessment of relevant legislation (in particular,
legislation imposing costs for SMEs) as an action aiming to
improve the quality of regulation
(https://www.simplex.gov.pt/)
10. Background (II)
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Better and
Smart Regulation
Reducing the
Administrative Burden
Cutting
Red Tape
Promotion of
e-Government
(https://www.simplex.gov.pt/)
Objectives of the SIMPLEX + programme
The SIMPLEX+ 2016 programme includes 255 measures
• “Custa Quanto?” – “How Much?” (does it cost):
Stimulus to economic competitiveness, entrepreneurship and economic growth
11. “How Much?”: Objectives
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Support the political decision process
Improve regulatory efficiency and economic rationality
Improve law making practices and the quality of regulation
Strengthen the rational/grounding in the communication of measures
adopted by the Government
Ex ante
Legislative
Impact
Assessment
Implement a culture of assessment and simplification
and promote administrative modernisation
Eliminate, reduce and/or mitigate administrative burdens and
compliance costs for firms
12. “How Much?”: Enactment
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Council of Ministers Resolution n.º 44/2017, 24th of March 2017, formalized the
measure and established the framework for the Legislative Impact Assessment:
• The Impact assessment is instituted as an integral part of the legislative procedure;
• Coordination is attributed to the Presidency of the Council of Ministers;
• A Technical Unit for Legislative Impact Assessment (UTAIL) was created within the Legal
Centre of the Presidency of the Council of Ministers (CEJUR);
• Close relation between UTAIL the ministries and a network of contact points within the
sectorial public administrative bodies;
• Particular attention is given to the impact on SME (SME test) and it also implements a
Competition Impact Assessment procedure;
• During the first year, this measure is being implemented as a pilot project and it will be
evaluated on January 2018.
13. “How Much?”: description
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Ex ante systematic regulatory economic impact assessment tool, focused
on the identification and calculation of the variation of administrative
burdens and other compliance costs imposed on individuals and on
businesses created by legislative initiatives to be approved by the
Portuguese Council of Ministers.
• During the pilot year of 2017 it will be applied on costs that are imposed on
businesses.
14. “How Much?”: implementation network
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The Legislative Impact Assessment is implemented by a network of focal points
within the ministries and several contact points integrated in sectorial public
administrative bodies in close collaboration with the Technical Unit for Legislative
Impact Assessment (UTAIL)
The UTAIL acts as a supervising body that supports the implementation of RIA,
developing the impact assessment methodology, giving technical support,
providing training to the Ministries and other public administrative bodies and
producing a final report for each impact assessment analyses.
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Regulatory Impact Assessment
+ Economic Impact
+ Benefits
+ Costs for businesses
+ Costs for citizens
+ Costs for public administration
+ SME
+ Competition / markets
Qualitative
analyses Administrative
burden
Compliance
costs
Global Model
Cost Benefit
analyses
Quantitative analyses
Benefits
identification
Benefits
monetization
Cost
estimation
Cost
estimation
Cost
estimation
Cost
estimation
Identify / quantify /
monetize, impacts:
• direct
• indirect
• dynamic (?)
• structural (?)
• Behavioural (?),
• Regulatory design (?)SME test
Competition
Impact Assessment
Total Cost
Monetization
Cost
estimation
Cost
estimation
“How Much?”: delimitation
16. “How Much?”: methodology
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Variation of Costs imposed on businesses: [increase, decrease or variation]
Direct Costs
Administrative
Costs
Specific
Financial Costs
Non Specific
Financial Costs
AAC * t * f * pv x f
[Standard Cost Model]
v – value of direct costs
f – frequency (annual)
AAC – average administrative cost (€/hour/work)
t – time to carry out the necessary tasks to comply with legislation
p – population
17. “How Much?”: implementation stages
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Screening
•Characterization of
the legal proposal
1st
•Characterization
of the incidence
2nd
•Data collection
and treatment
3rd
•“AIL“ report
•SME Test
•CIA
• Incidence
• Legal Origin
• Benefits
• Time
• Population
• Economic sector
• Data collection and
treatment for each
cost parameter
• Cost estimation
• Report
• SME Test
• CIA
Ministry and Network of
sectorial public bodies
Ministry and Network of
sectorial public bodies
Ministry and Network of
sectorial public bodies
Ministry and Network of
sectorial public bodies;
UTAIL
• UTAIL supports the
implementation
• Information (excel) sheet and
methodological guidelines
provide a step by step
guidance to evaluate the
impact assessment.
• INE (Statistics Portugal )
provides information on
average wages and
productivities per sector.
18. “How Much?”: SME Test
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Council of Ministers Resolution n.º 44/2017, 24th of March 2017, establish that
a special attention must be given to the impact assessment on SMEs
• In the framework of the European program – “Think Small first”:
• It should be taken in consideration:
o the possibility of an exemption to the obligations that are proposed by the
legislation;
o the adoption of mitigating measures.
• .The SME test demands a close involvement of SMEs stockholders and
other sectorial institution.
•
19. “How Much?”: CIA
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Competition Impact Assessment checklist
The implementation of the, OECD, Competition Impact
Assessment Checklists, screens the impact on market
competition.
It points out the potential distortions on competition that
may result form the public intervention.
Five, broad, impacts may be considered:
A. Limitation on the number or range of suppliers;
B. Limitation on the ability of suppliers do compete;
C. Reduction on the incentive of suppliers to compete;
D. Limitation on the choices and information available to customers
.
21. Evaluation and political outcomes
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Dynamic perspective on political intervention and
aspirations regarding the outcome + Behaviour insight
Public
necessity
Market failure?:
• Externalities?
• Information?
• Scale
• (Political?)
• Behavioural
Is there a
market
response?
Public
intervention
[behavioural
response]
Efficiency
Economic growth
(Sustainable?)
Welfare
Is Public intervention
necessary, (politically) effective
efficient, equative (inter and
intra generational)?
What now RIA?
22. Thank you,
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Manuel Cabugueira
Coordinator
UTAIL - Technical Unit for Regulatory Impact Assessment
CEJUR - Centre of the Presidency of the Council of Ministers
mcabugueira@cejur.gov.pt
www.portugal.gov.pt/pt/ministerios/mpma/quero-saber-
mais/sobre-a-pcm/cejur/custa-quanto.aspx