Regulatory Impact Analysis

Regulatory Impact Analysis (RIA) is a policy tool widely used in OECD countries. RIA examines and measures the likely benefits, costs and effects of new or changed regulations. It provides decision-makers with valuable empirical data and a comprehensive framework which they can use to assess options and the consequences their decisions may have. RIA is used to define problems and to ensure that government action is justified and appropriate.

OECD Member countries have recognised that regulatory quality is crucial to economic performance and to improving the quality of life of their citizens. This led the OECD Council to establish, in March 1995, a Recommendation on Improving the Quality of Government Regulation – the first internationally accepted set of principles concerning regulatory quality. Among a range of system improvements, the Recommendation included a reference checklist for regulatory decision-making and a commitment to better RIA.

Attempts to improve regulatory quality initially focused on identifying problem areas, advocating specific reforms and scrapping burdensome regulations. But policy makers soon recognised that makeshift approaches to reform were insufficient. The reform agenda of OECD countries began to broaden, to include a range of explicit overarching policies, disciplines and tools. The OECD Guiding Principles for Regulatory Quality and Performance reflect the change over the last decade, capturing the dynamic, ongoing whole-of-government approach to implementation. RIA can be used to integrate competition and market openness criteria.

The OECD has assessed RIA systems through thematic studies and country reviews. The report Regulatory Impact Analysis – Best Practices in OECD Countries described RIA systems used in different Member states and their historical development, compared elements of those systems and their practical implementation, and identified current best practice in RIA. As a result, a set of ten good practices in the design and implementation of RIA systems was developed. This does not imply that a single system of the implementation of RIA is desirable in all countries at all times. Institutional, social, cultural and legal differences between countries require different system designs. The good practices are starting points to maximise the benefits of RIA.

Contact: For further information please contact pedro.andresamo@oecd.org or gregory.bounds@oced.org

RIA Inventory

The development of good practices on RIA has helped many OECD countries to establish RIA systems. The implementation of regulatory reform, however, calls for continued efforts to improve the capacity for high quality regulation.
The RIA Inventory compares key elements of RIA systems in OECD countries, such as type of analysis, scope of coverage, public disclosure, quality control, cost-benefit analysis, social discount rate, risk assessment, effects on competition and market openness, and ex-post monitoring.

Document: Regulatory Impact Analysis (RIA) Inventory

RIA in OECD Countries and Challenges for Developing Countries

RIA is a clear example of the trend towards more empirically based regulation and decision-making. Its use in OECD countries has increased dramatically in recent years. Experience can provide guidance and identify important principles. By examining the experiences of other countries, regulators can identify areas where problems or impediments to reform are likely to arise, and can suggest strategies to overcome them and continue the reform process. Some non-member countries have already benefited from this experience.

As part of the work on outreach, the Regulatory Policy Division of the OECD’s Public Governance and Territorial Development Directorate (GOV) prepared the paper “RIA in OECD Countries. Challenges for Developing Countries”, which was presented at the Third South-Asian High Level Investment Roundtable, in Dhaka, Bangladesh in June 2005. The goal of this paper discusses and analyses the use of RIA in OECD member states, and to identify challenges for developing countries in establishing appropriate RIA systems.
Document: RIA in OECD Countries. Challenges for Developing Countries

Building an Institutional Framework for Regulatory Impact Analysis (RIA): Guidance for Policy Makers

Regulatory Impact Analysis (RIA) is a fundamental tool to help governments to assess the likely benefits, costs and effects of new or existing regulation. By improving the quality of regulatory design, RIA assists governments to make their policies more efficient. This is all the more important as governments cope with budgetary constraints, and the consequences of competing policy demands.

This guide for policy makers with little knowledge about RIA is intended to cover the main elements that constitute the RIA process, with a focus on basic institutional preconditions for successful implementation. It draws on the extensive work of the OECD on the RIA practices of OECD members. The OECD framework highlights the benefits of RIA, to help practitioners better understand the elements needed to introduce and consolidate a RIA system.

Document: Building an Institutional Framework for Regulatory Impact Analysis (RIA): Guidance for Policy Makers, Version 1.1