Principle 12 - Strive for consistent, quality regulation



Effective Public Investment Line 12



To promote a regulatory framework conducive for both public and private investment at the sub-national level.
Divergent, overlapping, contradictory or constantly changing regulations can impose costs, particularly for sub-national governments, reduce efficiency and deter investors. Regulatory coherence is of particular importance in network sectors, like power, telecommunications and water, owing to the greater degree of regulation to which such activities are typically subject. Even relatively basic public works projects may be impeded by a lack of regulatory clarity or coherence. And the private sector may stay away, experience delays, or even abandon a project if there are issues in the regulatory framework or a problematic procurement process.

To enhance regulatory capacity of sub-national governments.
Sub-national capacity for regulatory quality is an integral aspect of effective public investment.  Sub-national governments should be able to implement regulation from higher levels of government effectively, as well as to define and implement their own strategy for regulatory management, including the assessment of regulatory impact and reforms needed. Special attention should be given to administrative simplification which could help involve private partners in public investment strategies.


  • Co-ordinate regulatory policy across levels of government, e.g. via inter-governmental platforms, mutual recognition policies, regulatory harmonisation agreements and regulatory uniformity agreements (all levels).

  • Review the stock of regulation regularly, assessing costs and benefits of new regulations and taking compliance costs for sub-national governments into account (national level).

  • Foster sub-national capacity for regulatory quality as an integral aspect of effective public investment and implement the OECD 2012 Recommendation of the Council on Regulatory Policy and Governance.


  • Create unnecessary ‘flux’ of regulations: constantly changing: a major challenge, especially for SNGs in the absence of sufficient capacities.  

  • Undermine high quality regulation at one level of government by poor regulatory policies and practices at other levels.

  • Use regulation that focuses on that single jurisdiction’s welfare to the detriment of other jurisdictions (such as race-to-the-bottom forms of competition);

  • Ignore innovative regulatory practices set up at the regional or local level that could benefit higher levels of government.


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See real life examples on how countries have been putting this principle into practice. Read more


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Country profiles on how they have been using the toolkit to assess public investment capacity . Read more


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Indicators and self assessment questionnaire on this principle. Read more



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