Regulation is a vital tool for governments to achieve their social, economic, and environmental policy objectives. However, given resource constraints, governments must take a proportionate approach to effectively allocate resources when assessing new regulations and reviewing existing ones. The core principle of proportionality helps regulatory oversight bodies and regulatory authorities focus their efforts on regulatory proposals or reviews where a more in-depth approach is justified.
Thailand has been a regional leader in promoting whole-of-government regulatory reforms for two decades. Good regulatory practices (GRPs) are a key component of Article 77 of the 2017 Constitution of Thailand, GRPs are woven into the Thai National Strategy (2018-2037), Twelfth National Economic and Social Development Plan, and the “Thailand 4.0” strategy. The Act on Legislative Drafting and Evaluation of Law (2019) further implemented Section 77 of the Constitution, legislating for ex ante regulatory impact assessment (RIA), stakeholder engagement and ex post review of draft laws.
The Office of the Council of State (OCS) is responsible for implementing GRP reforms in the government, as the designated regulatory oversight body under the 2019 Act. It has been engaged in a collaboration with the OECD since 2017. The OECD is currently undertaking a second Thailand Country Programme, which will include a Regulatory Reform Review of Thailand, to explore how effectively these GRP reforms have been implemented and offer recommendations for reform.
Regulatory impact assessment (RIA) is a fundamental tool that promotes the quality of new regulations through an evidence-based process. The use of RIA by the OECD Member countries has increased over the past 30 years. All 34 OECD countries currently have a RIA system. However, given the time and resources that are involved in performing RIA, many OECD countries and the EU have adopted a tiered, or proportional, approach when assessing when and how to conduct it.
For example, some countries have decided to apply a shorter, less strenuous RIA (i.e., “light” RIA) when the perceived impacts of the regulations are considered low risk. This has been the case for countries that, for example, want to preserve their resources for a proposed regulation where the impact is expected to be higher and where a more in-depth evaluation would be required (i.e., “full” RIA).. To decide whether to conduct a “light” or “full” RIA, many countries use a quantitative or qualitative threshold as their proportionality test, in the simplest quantitative form: if the estimated monetary impact of a regulation is over a pre-determined threshold, it triggers the requirement for a “full” RIA. Similarly, for ex post reviews, regulations that have broad or high impacts can be prioritised for in-depth review. The use of thresholds as well as international examples are discussed in detail in this report.
Many countries include exceptions to their RIA process. For example, policies around national security, budget commitments, or in emergency situations may not have to undergo the RIA process, or the RIA process is delayed and done after implementation (especially for emergency policies). These exemptions are often assessed at the proportionality stage, with the regulatory oversight body (ROB) usually scrutinizing and approving the request for exemption.
Thailand currently does not have a process in place for determining which draft laws require greater scrutiny from the OCS and a more focused discussion by the Cabinet of Thailand. This has become an issue as the OCS has been receiving a high number of draft primary and secondary legislation for RIA quality review and legal check (in 2023, the OCS received 15 primary bills and 221 pieces of secondary draft legislation for review). Accordingly, there is a danger that the government’s scarce analytical resources will be dissipated across too many draft laws, with no ability to focus upon those with the greatest potential impact upon society.
As part of the Regulatory Reform Review, the OCS asked the OECD to develop a proposal for a “proportionality test” for ex ante RIA, with the logic also being applicable to ex post reviews. The adoption of such a mechanism could help the Thai administration address any challenges associated with analytical capacities or prioritising high-impact regulations. The adoption of a proportionality principle could also further align the country with OECD best practices in the implementation of GRPs.