9 Regulation
The regulation indicator is defined as: the extent and quality of regulatory impact assessments and the degree of stakeholder engagement involved in them. The appropriate appraisal and evaluation of regulatory changes accompanied by sufficient stakeholder engagement is crucial to ensuring that any introductions are fully considered and fair, involving various stakeholders. This scrutiny is endorsed by many; the OECD (2012) for instance, “recognis[es] that regulations are one of the key levers by which governments act to promote economic prosperity, enhance welfare and pursue the public interest”, and that “well designed regulations can generate significant social and economic benefits which out weigh the costs of regulation, and contribute to social well-being”. The International Monetary Fund (2016) acknowledges the importance of regulatory frameworks to successful governance: “From the perspective of the IMF, countries with good governance have strong legal and regulatory frameworks in place”. Additionally, in promoting best practice, “[the] Regulatory Impact Analysis (RIA) is a multiple stakeholder assessment of the economic, environmental and social impact of regulations. The OECD and European Union have strongly promoted this evidence-based approach towards legislation” (Boviard & Löffler, 2003).
The regulation indicator is comprised of nine metrics, an increase of three from the 2017 Pilot. It uses the following sources:
- The OECD’s Indicators of Regulatory Policy and Governance (OECD) [2017].
- The Bertelsmann Foundation’s Sustainable Governance Indicators (SGI) [2018].
| Metric | Source | Type | Public sector proxy | Data transformation | Weighting within indicator | Definition of the source metric (e.g. question wording) | ||
|---|---|---|---|---|---|---|---|---|
| In theme (A) | Theme (B) | Total (C=A*B) | ||||||
| Use of appraisal and evaluation | ||||||||
| Use of impact assessments [new] | SGI | Expert assessment | No | None | 20.0% | 50.0% | 10.0% | To what extent does the government assess the potential impacts of existing and prepared legal acts (regulatory impact assessments, RIA)? [rated 1-10; mean score] |
| Impact assessment for primary law | OECD | Government assessment | No | None | 20.0% | 50.0% | 10.0% | OECD composite of government regulatory governance practices |
| Impact assessment for secondary law | OECD | Government assessment | No | None | 20.0% | 50.0% | 10.0% | OECD composite of government assessments of the use of impact assessment |
| Evaluation for primary law | OECD | Government assessment | No | None | 20.0% | 50.0% | 10.0% | OECD composite of government assessments of the use of impact assessment |
| Evaluation for secondary law | OECD | Government assessment | No | None | 20.0% | 50.0% | 10.0% | OECD composite of government assessments of the use of impact assessment |
| Stakeholder engagement | ||||||||
| Stakeholder engagement for primary law | OECD | Government assessment | No | None | 50.0% | 25.0% | 12.5% | OECD composite of government assessments of the use of impact assessment |
| Stakeholder engagement for secondary law | OECD | Government assessment | No | None | 50.0% | 25.0% | 12.5% | OECD composite of government assessments of the use of impact assessment |
| Nature of impact assessment | ||||||||
| Quality of impact assessment [new] | SGI | Expert assessment | No | None | 50.0% | 25.0% | 12.5% | Does the RIA process ensure participation, transparency and quality evaluation? [rated 1-10; mean score] |
| Sustainability checks [new] | SGI | Expert assessment | No | None | 50.0% | 25.0% | 12.5% | Does the government conduct effective sustainability checks within the framework of RIA? [rated 1-10; mean score] |
| Tables 3.7.A & 3.7.B in the original 2019 publication | ||||||||
9.1 Imputation of missing data
None of the 38 countries selected for the 2019 edition of InCiSE have completely missing data for the regulation metrics. As a result the imputation of missing data for the regulation metrics is based solely on the data within the indicator.
9.2 Changes from the 2017 Pilot
The regulation indicator has had three additional metrics added from the Bertelsmann Foundation’s Sustainable Governance Indicators on the use and quality of regulatory impact assessments (RIA), and whether RIAs include sustainability checks.