Remarks by Angel Gurría,
28 October 2015
(As prepared for delivery)
Distinguished Ministers, Excellencies, Ladies and Gentlemen,
Let me begin by thanking the Government of Finland, and in particular Minister Vehviläinen, for hosting today’s Public Governance Ministerial Meeting. I would also like to thank our three Vice-Chairs – Minister Braun, State Minister Matsushita, and Mr. Bansal – for joining us. Your leadership of today’s Ministerial lab discussions is greatly appreciated.
Eight years after the greatest economic crisis of our lifetimes, the world economy remains fragile. Many economies are still affected by slow growth, high unemployment, and rising inequalities. Emerging challenges, such as large‑scale migration in Europe and the Middle East, bring new pressures. Meanwhile, major longstanding risks, climate change in particular, continue to hang over us like the sword of Damocles.
Citizens are increasingly aware of the scale of these challenges. But their trust has been dented. Still, they have hope and they are expecting solutions. Now! Thus, now is the time to look beyond political timetables and ideological affiliations to find durable solutions to the world’s challenges.
Our countries have set ambitious goals for the future. Last month, 193 countries adopted the Sustainable Development Goals to end poverty and achieve other social and environmental objectives. In early October, G20 Finance Ministers endorsed a blueprint of actions to end base erosion and profit‑shifting in the international tax system. And in December, at COP 21, we should develop a clear and decisive path to reduce carbon emissions and fight climate change once and for all, before it gets too late.
Setting such ambitious goals is a must, but is not enough. We need to reduce the “implementation gap” and achieve concrete results. Governments must be equipped with the right tools for good governance, and have the capacity to design, implement and evaluate policies. Through such actions, governments can help rebuild citizens’ trust in public institutions.
The OECD’s new Regulatory Policy Outlook – that I have the pleasure of launching today – confirms that we have the tools we need. But we don’t always know how to put them into practice!
Today’s discussions focus on the importance of good governance for inclusive and sustainable growth. This is a vast topic – as can be seen from the diversity of issues to be covered in the Ministerial labs later this morning – so I’d like to focus on two key areas: the role of regulation; and the imperative to shape a new vision for the public service.
A key function of government is to issue rules that support growth and well‑being. Policymakers work hard to get their tax and spending policies right, but do they think sufficiently about regulation? Too often we take the rules that determine the welfare of our citizens or the business environment of our companies for granted. Yet, poorly conceived or unevenly enforced rules can obstruct both growth and inclusiveness. Better regulation delivers clear dividends.
The Regulatory Policy Outlook offers country-specific examples of cost savings from better regulation. The war on red tape and unnecessary regulation in the United Kingdom, which included measures like lowering the legal age at which children can buy Christmas crackers, has saved businesses GBP 10 billion over the last 4 years! In Belgium, regulatory reforms have delivered savings of EUR 1.25 billion. And in Australia, reforms aimed at lowering regulatory costs have increased GDP by 1.3%.
And all countries can benefit from improvements to trade regulation. The OECD’s 2015 Trade Facilitation Indicators show that simple improvements ‘behind the border’ – simplifying trade documents, streamlining border procedures, and automating the border process – could lower trade costs by 2.8% to 4.2%, depending on a country’s level of development. In the current economic climate, we cannot afford to ignore these benefits.
Two weeks ago, at the OECD World Forum on Well-being in Mexico, Joseph Stiglitz urged leaders to “Rewrite the Rules” – the laws and regulations of our economies – if we are to truly aim for inclusive growth. Our new Regulatory Policy Outlook, which systematically tracks progress in the way that countries develop, implement and review their laws and regulations, equips us with the information we need to act. And it will help us monitor progress in the years to come.
The Outlook conveys good news: over the past two decades, countries have come a long way towards establishing the conditions for better regulatory quality, with increased accountability and attention at the ministerial level. Law-making is becoming more accountable and evidence‑based. But much remains to be done. The right rules need to be designed with the right people to achieve the right results. Governments need to focus on evaluation, addressing shortcomings in implementation and enforcement. This is not just for the executive: parliaments, sub‑national governments and regulators all have a vital role to play.
Of course, improving law-making and regulation is not only a domestic imperative. We also need to strive for international co-operation. The recent signing of the Trans-Pacific Partnership reminds us that such co-operation may help facilitate trade and investment, with attendant benefits for all our citizens. Now is the time for action.
Inclusive growth also requires a new vision for the public sector. It suggests a public sector that is open, innovative and knows how to engage with citizens. Our public sectors have already proven that they are adaptable and resilient. Despite the enormous pressure they’ve faced over the last few years, they have continued to respond to the needs of our citizens with professionalism and skill.
But the public sector cannot afford to stand still. It needs to create opportunities for all. Highly performing and accessible social services – particularly health and education – are essential for securing inclusive growth outcomes. The public sector must innovate: citizens, businesses and users should be actively involved in the design and delivery of public services. Governments can crowdsource new ideas, and take advantage of open data and big data to generate better evidence for policy. Policymakers should dig down to the local level to see how policies are working, as we do with the OECD How’s Life in Your Region? web tool and publications.
The public service needs to be a model of integrity and transparency, fighting corruption and fraud, and ensuring that the right incentives drive policies. In light of the recent scandal over manipulating car emissions at Volkswagen, we also need rules that are truly enforced and regulators that bite.
The Regulatory Policy Outlook shows only 12 OECD jurisdictions require the release of regulatory impact assessment documents for public consultation. And a third of OECD countries lack a strategy to enforce their regulations. The risk of policy capture is real and needs to be guarded against in all risk areas, including political financing. Yet at the same time, governments cannot stand alone in fighting corruption. They must co-operate with the private sector to achieve results.
Ladies and gentlemen,
We are all on the frontline of global efforts to improve governance. Our new Regulatory Policy Outlook can help you monitor your own progress in “rewriting the rules” and shaping a new vision for the public service in pursuit of inclusive growth. Our Public Governance Communities are also ready to support you.
Our discussions today will help us reinvent the art of governing and trustworthy institutions. I hope you enjoy the innovative format of our Ministerial lab discussions. We are here to learn and listen. Let’s identify new ways to serve our citizens and build the foundations of better policies for better lives, for today, tomorrow and the future.