OECD promotes regulatory reform through in four principal ways: Policy recommendations, country reviews, thematic discussions (including sectoral analysis, International regulation database and government capacities and tools for improving regulatory quality), and Co-operation with non-member countries.

Regulatory reforms operate at 3 levels: revising a single regulation; rebuilding an entire regulatory framework and its institutions; improving processes for designing regulations and managing reform. In the OECD area, they aim to create effective, market-oriented regulatory, competition, trade and investment regimes and institutions, and high standards of social and environmental protection.

Regulatory reform produces economic and social benefits. It fosters non-inflationary growth; boosts consumer benefits; improves the competitivity of export and upstream sectors; enhances flexibility and innovation in the supply-side of the economy, reducing vulnerability to economic shocks; creates jobs; strengthens regulatory protection for health and safety, the environment and consumers.

However, regulatory reform can threaten vested interests and often leads to a reallocation of capital and labour resources, while its economy-wide benefits occur over the medium term. The challenges are greater still in countries lacking core rules to underpin functioning markets: property rights, judicial institutions, commercial codes and bankruptcy laws.

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