How do laws and regulations affect competitiveness

The impacts of laws and regulations on competitiveness have strong implications for OECD economies, as they can lead to unforeseen negative externalities and considerable regulatory costs for businesses and citizens. Nevertheless, the use of regulatory policy to assess the impacts of regulations on competitiveness has seldom been examined. This paper fills this gap by reviewing OECD members’ regulatory impact assessment (RIA) frameworks and the extent to which the competitiveness effects are currently appraised. It categorises regulatory impacts on competitiveness into three strongly interrelated components – cost competitiveness, innovation, and international competitiveness – and builds upon the OECD’s expertise to examine how regulations affect each component of competitiveness in turn. In doing so, the paper proposes a more complete structure that regulators can use to define and assess the competitiveness impacts of regulation as part of their RIA processes framework.