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Laws and regulations govern the everyday life of businesses and citizens, and are essential tools of public policy. The COVID-19 pandemic has highlighted the crucial role regulation plays in the economy and society, but has also exposed gaps in domestic and international rule-making that have cost lives and money. The 2021 Regulatory Policy Outlook, the third in the series, maps country efforts to improve regulatory quality in line with the 2012 OECD Recommendation on Regulatory Policy and Governance, and shares good regulatory practices that can help close the gaps. It provides unique insights into how countries approach the design, enforcement and revision of regulations, and suggests where countries can best focus their efforts to ensure that laws and regulations work as intended. Finally, it discusses some agile and innovative approaches to rule making such as regulatory sandboxes, behavioural insights, and outcome-based, data-driven and risk-based regulation.

Industries and businesses are becoming increasingly digital, and the COVID-19 pandemic has further accelerated this trend. Regulators around the world are also experimenting with data-driven tools to apply and enforce rules in a more agile and targeted way. This report maps out several efforts undertaken jointly by the OECD and Italian regulators to develop and use artificial intelligence and machine learning tools in regulatory inspections and enforcement. It provides unique insights into the background processes and structures required for digital tools to perform predictive modelling, risk analysis and classification. It also highlights the challenges such tools bring, both in specific regulatory areas and to the broader goals of regulatory systems.

A clear, efficient, and modern regulatory framework for pesticides is essential for addressing their impacts on human health and the environment, supporting a life-cycle approach to their management, and ensuring crop protection and a sustainable agricultural industry. This report identifies the gaps, barriers, implementation flaws and inefficiencies that affect the regulatory framework of pesticides in Mexico. It takes stock of the regulatory framework and recent reforms, and identifies both the areas that pose the greatest challenge for the effective regulation of pesticides and those where regulation – or lack of it – in pesticides most affects policy objectives and economic activity. These challenges and practices are assessed in view of OECD principles and country experiences, and recommendations are provided to support better regulation efforts. The report finds that Mexico would benefit from adopting a comprehensive, mutually-agreed policy strategy for pesticides, recognising that pesticide management is a shared responsibility across national and local governments, the pesticide industry, pesticide users, as well as the general public.

From combating COVID-19 and climate change to tackling corruption and tax evasion, international organisations (IOs) play a critical role in helping countries find solutions to common problems. But for IOs to deliver optimal support to countries and their populations, the international instruments they develop need to be inclusive, well understood and have a tangible impact. This Compendium of International Organisation’s Practices gathers the experiences of some 50 IOs with different mandates, members and institutional frameworks to draw lessons for international rulemaking. It examines the diversity of instruments in the international rulemaking ecosystem; describes trends and challenges; and discusses how to strengthen the implementation and evaluation of international instruments, ensure efficient stakeholder engagement, and maximise opportunities for co-ordination across IOs. The IO Compendium is designed to serve not only all national and international policy practitioners, but also civil society actors, academic experts, private actors, and citizens who seek to understand, benefit from and possibly contribute to the international rulemaking process.

Established domestic regulatory frameworks are reaching their limits to cope with today’s increasing cross-boundary policy challenges. Only united action can effectively navigate the rapid growth of economic integration and interdependencies, particularly driven by innovative technologies. Yet, contemporary regulatory frameworks tend to build on national jurisdictional boundaries constraining common solutions to meet the growing transboundary nature of policy challenges. In the aftermaths of global crises, such as the 2008 financial crisis or the COVID-19 pandemic, which exposed the vulnerabilities of global health, economic and governance systems, it is time for a true paradigm shift towards more systematic consideration of the international environment in domestic regulatory frameworks. The OECD Best Practice Principles on International Regulatory Co-operation provide practical guidance supporting policy makers and civil servants in adapting regulatory frameworks to the interconnected reality. They outline key elements in defining a dedicated whole-of-government strategy and governance structure, embedding international considerations throughout the domestic regulatory design, development and delivery, and leveraging bilateral, regional and multilateral international co-operation on regulatory matters to support national policy objectives. Compiling various ways of international regulatory co-operation and experiences from countries, the OECD Best Practice Principles on International Regulatory Co-operation provide impetus for policy makers and civil servants in a variety of legal and administrative environments on how to promote quality and resilience of regulatory frameworks in times of an increasingly interconnected world.

Regulations play a fundamental role in achieving public policy objectives, including the protection of human health and the environment, the fight against monopolies, or the efficient provision of water and sanitation services. Regulatory impact assessment (RIA) is an important tool for ensuring that regulations are of good quality. This report provides guidance for implementing RIA at the National Superintendence of Sanitation Services in Peru (Sunass). After assessing the agency’s process for issuing rules, the report provides recommendations for designing legal reforms needed to establish RIA as a permanent practice as well as training for the staff who will develop the RIAs. The report includes technical guidelines on undertaking public consultation, identifying public policy problems, and performing cost-benefit analysis.

Regulators act as 'market referees', balancing often competing interests of stakeholders in the sector, including governments, current and future actors in the markets, and consumers. At the same time, markets are changing at an unprecedented pace due to new technologies, the international drive toward carbon-neutral economies, shifts in consumer needs and preferences, and, most recently, the profound changes brought by the coronavirus pandemic. Assessing the performance of economic regulators must therefore be a continuous process. This progress review evaluates the changes put in place by Latvia’s Public Utilities Commission since the previous OECD performance assessment review in 2016, in the interest of increasing the effectiveness of its regulatory activities and improving final outcomes for consumers and the economy.

As 'market referees', regulators contribute to the delivery of essential public utilities. Their organisational culture, behaviour and governance are important factors in how regulators, and the sectors they oversee, perform. The OECD Performance Assessment Framework for Economic Regulators (PAFER) looks at the institutions, processes and practices that can create an organisational culture of performance and results. The report uses PAFER to assess elements linked to both the internal and external governance of Portugal’s Energy Services Regulatory Authority (ERSE). The review acknowledges the well-respected status of ERSE within the institutional framework, analyses the key drivers of its performance, and identifies a number of challenges and opportunities to help the regulator prepare for the future, including in the context of deep market transformation and the COVID-19 crisis.