The governance and resourcing of reviews, and the approaches employed, need to be proportionate to the nature and significance of the regulations concerned. While needing to be cost effective, arrangements should be such as to facilitate findings and recommendations that are sufficiently well supported to be publicly credible.
While it is important that no regulation escapes scrutiny, evaluations need to be proportionate and fit for purpose. There are a number of dimensions to this, including the scope and depth of a review, as well as the resources employed. Conducting reviews is not a costless exercise. Spending disproportionate time and money on some regulations may leave other necessary reviews under-resourced. Regulations of major significance need to be resourced sufficiently to conduct rigorous analysis and engage in broad consultations.
For many regulations, evaluations will be most appropriately conducted within the department or ministry having policy responsibility. Enforcement bodies should normally not conduct reviews themselves, but they are uniquely placed to offer relevant information and advice, and should be closely consulted.
Departments and ministries responsible for regulation have a number of advantages in overseeing ex post reviews of regulation, including greater subject knowledge, familiarity with developments over the life of a regulation, the ability to draw on relevant skills and to undertake reviews at relatively low cost.
Regulatory enforcement bodies within a ministry will typically be a key source of performance information, especially about compliance rates and the costs of administering a regulatory regime. It is important that there is systematic provision for harnessing their knowledge. However, principles of good governance require that these bodies not have responsibility for reviewing their own performance, nor for making recommendations about the regulations they must administer and enforce.
The more “sensitive” a regulation, and the more significant its economic or social impacts, the stronger the case for an “arm’s-length” or independent review process. This in turn requires, at a minimum, that those leading a review are not beholden to the agency concerned, and have no perceived conflicts of interest.
Agencies responsible for regulation, while usually having expert knowledge, can also have mixed incentives when it comes to assessing and reporting on how well a regulation has performed. This can reflect concerns about the prospect of criticism or “blame”, or even about potential disruption to the status quo. How much of a problem this is in practice could depend on a variety of things, including staff turnover in relevant roles within a department and whether the government that made a regulation is still in power at the time of it being reviewed.
This is more likely to be an issue where a regulatory area is publicly or politically contentious, with the need to act also being influenced by the impacts of the regulatory regime.
The degree of independence called for will generally be a judgment call. However, at a minimum, the test should be that while the reviewer will need relevant knowledge and experience, there should be no conflicts of interest – real or perceived – or reasons for being unduly influenced by different interests, including from within the policy portfolio. Some countries have used standing bodies from within government to conduct such reviews (with about half the OECD member counties reporting that they have such bodies), and most have used ad hoc taskforces or committees of review formed specifically for a review task (Box 3.1).