Public governance

Improvements in Chile’s regulatory policy would bring major benefits to the‎ economy and society

 

25/04/2016 - Chile has improved its regulatory policy in recent years, but could see benefits from further measures and a comprehensive effort to improve the way it prepares and issues new laws and regulations, according to a new OECD report.

 

“Regulatory Policy in Chile” finds that, while Chile has taken some steps to improve its rule-making process, it is still behind the OECD average in assessing the impact of regulations, consulting with outside parties on their design and evaluating them over time.

 

This means Chile is not making the most of a key “third lever” alongside tax and spending policies that can drive growth and well-being. The Review finds that one of Chile’s main weaknesses is its lack of a regulatory oversight body. It recommends creating an agency to oversee the rule-making process currently managed by different government departments with no overall supervision.

 

“High-quality regulation leads to better productivity and more inclusive growth. In today’s difficult economic times, it is imperative that governments pay attention to this often neglected third lever,” said OECD Secretary-General Angel Gurría, who delivered the report to President Michelle Bachelet. “Chile should make it a priority to improve its regulatory framework to help achieve its economic and social goals.”

 

While in Santiago, Mr Gurría will also meet with business representatives and trade union leaders to address issues of productivity, inclusive growth, trade, investment and sustainable development, ahead of the annual Meeting of the OECD Council at Ministerial Level that Chile will be chairing on 1-2 June, in Paris.

 

In the OECD’s Regulatory Policy Outlook 2015, Chile was found to be among a third of OECD countries that have yet to implement a policy on regulatory compliance and enforcement. The report noted that this creates unnecessary costs for business and society.

 

The new Review finds that most regulators in Chile prepare new norms without having clear evidence that regulation is the best way for government to intervene. It also finds that good practices in rule-making procedures are limited.

 

The Review welcomes a proposal in Chile’s new National Agenda for Productivity, Innovation and Growth to establish a regulatory oversight body. It also recommends that Chile introduce more transparency and plainer language in its rule-making processes.

 

Other recommendations in the Review include:

 

  • Adopt a formal, explicit, binding and consistent whole-of-government regulatory policy with clear objectives and a communication strategy.
  • Develop mandatory standards and guidelines for the preparation of laws and regulations, including compulsory consultation practices and forward planning.
  • Introduce regulatory management tools such as regulatory impact assessments and ex-post evaluations.
  • Consolidate and broaden the administrative simplification programme in co-ordination with digital government initiatives.

 

For further information, or to arrange an interview with the author, please contact Carolina Ziehl at the OECD Mexico Centre (+52 55 9 138 6235 or carolina.ziehl@oecd.org)

 

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world

 

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