WHY IS PERFORMANCE ASSESSMENT IMPORTANT?
To successfully regulate markets, regulators need to be constantly alert, informed by live-data, checking sectoral trends and assessing the impact of their decisions. Measuring regulators’ performance is therefore essential, but by no means easy. What should be measured? Is it possible to attribute impacts to regulators' decisions? How to make effective use of what is measured? How is the structure of the organisation contributing or preventing efficient and effective outcomes? These are only some of the questions regulators are grappling with. To help regulators find an answer, the OECD has developed an innovative framework that looks at the institutions, processes and practices that help regulators assess their performance and achieve the outcomes they are set up to deliver.
HOW TO ASSESS PERFORMANCE?
The OECD Performance Assessment Framework for Economic Regulators (PAFER) helps regulators better assess their own performance and the performance of the sectors they oversee.
The PAFER builds on the recognition that governance matters to drive performance. While scorecards and indicators are useful tools to develop accessible and assessable information, they are not enough. These tools need to be part of a governance framework that supports attention and concern for performance within the regulator but also outside the regulator, balancing the issues of those government and non-government stakeholders that make up the eco-system where regulators operate.
Regulatory, governance and cultural context
To capture and assess this governance framework aimed at driving performance, the PAFER focuses on:
- Strategic objectives: to identify the existence of a set of clearly identified objectives, targets, or goals that are aligned with the regulator’s functions and powers, which can inform the development of actionable performance indicators;
- Input: to determine the extent to which the regulator’s funding and staffing are aligned with the regulator’s objectives, targets or goals, and the regulator’s ability to manage financial and human resources autonomously and effectively;
- Process: to assess the extent to which processes and the organisational management support the regulator’s performance;
- Output and outcome: to identify the existence of a systematic assessment of the performance of the regulated entities, the impact of the regulator’s decisions and activities, and the extent to which these measurements are used appropriately.
For further information, or to attend a meeting or find out about becoming a member of the NER, please contact Faisal Naru or Filippo Cavassini.
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