2 Cutting Red Tape 0 0 6 NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION Cutting Red Tape Most OECD countries have made policies to reduce administrative burdens – cutting red tape – a political priority. Red tape is particularly NATIONAL STRATEGIES FOR burdensome to smaller companies and may inhibit entrepreneurship. These effects are more costly in global markets, where competitiveness can ADMINISTRATIVE SIMPLIFICATION be affected by the efficiency of the domestic regulatory and administrative environment. But citizens and large firms also complain about unnecessary reporting requirements. Results are wanted. What can governments do? Strategies include setting quantitative targets to reduce administrative burdens when new regulations are drafted and by reviewing older regulations; codification; better multi-level co-ordination; and rapid introduction of e-government services. Supported by taskforces and C advisory committees, governments increasingly locate responsibility in a central u t administrative unit. This “whole-of-government” approach represents a major tin g step in recent years, embedding administrative simplification in the overall R regulatory quality system at the national level. e d T a p e N The full text of this book is available on line via these links: AT http://www.sourceoecd.org/governance/9264029788 ION A http://www.sourceoecd.org/industrytrade/9264029788 L S T Those with access to all OECD books on line should use this link: R A http://www.sourceoecd.org/9264029788 TE G SourceOECD is the OECD’s online library of books, periodicals and statistical databases. For more IES information about this award-winning service and free trials ask your librarian, or write to us at FO R [email protected]. A D M IN IS T R A T IV E S IM P L IF IC A T IO N www.oecd.org ISBN 92-64-02978-8 42 2006 10 1 P -:HSTCQE=UW^\]V: Cutting Red Tape NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Also available in French under the title: Éliminer la paperasserie DES STRATÉGIES NATIONALES POUR SIMPLIFIER LES FORMALITÉS ADMINISTRATIVES © OECD 2006 No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to OECD Publishing [email protected] or by fax 33145249930. Permission to photocopy a portion of this work should be addressed to the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, fax 33146346719, [email protected] or (for US only) to Copyright Clearance Center (CCC), 222 Rosewood Drive Danvers, MA 01923, USA, fax 19786468600, [email protected]. FOREWORD Foreword A dministrative burden reduction policies are a priority on the political agenda. The removal of measures of direct state control constituted the main source of regulatory improvement between1998 and2003. Now the emphasis falls on measures to remove barriers to trade, investment and entrepreneurs. This puts administrative simplification in the broader context of policies to enhance performance and productivity. The2003 OECD report on administrative simplification, From Red Tape to Smart Tape – Administrative Simplification in OECD Countries, was based on case studies from a limited range of countries at a time when the topic was new, and had a strong focus on the tools used to simplify administrative regulations. Expectations are greater today, and adhoc simplification initiatives have in many cases been replaced by comprehensive government programmes to reduce red tape. Some instruments, such as one-stop shops, which were new then, have become widely adopted. New programmes and initiatives are now being implemented in OECD countries, notably with a focus on quantitative instruments. Simplification is not easy, making this report timely and relevant if further progress is to integrate the lessons of experience. Simplification efforts have evolved in recent years mainly in the context of growing pressure from businesses to reduce administrative burdens and improve economic performance. Expectations of citizens have also risen concerning efficiency and transparency. Key questions for the future are: what impacts might simplification efforts have on other efforts to improve public sector performance, including e-government; how co-ordination between central and sub-national levels can be improved, given that many of the procedures are concentrated at the regional and local levels; what more could governments aim to achieve, to further improve business conditions; how the obstacles to a change in administrative culture can be overcome more easily; and how burden reduction efforts can be sustained over time. The OECD report Economic Policy Reforms: Going for Growth (2005) included sets of priorities for all member countries, supported for the most part by indicators, to improve performance through structural reform. Reducing administrative and regulatory burdens figured in the list of priorities for 9member countries, and public administrative reform and the regulatory environment was highlighted for 7. Analysis of the indicators led to the conclusion that in1998, countries that had restrictive CUTTING RED TAPE: NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION – ISBN 92-64-02978-8 – © OECD 2006 3 FOREWORD economic regulations also tended to impose burdensome administrative procedures on business enterprises. A positive correlation between these two regulatory areas has persisted into2003, when the product market regulation indicators were updated. It would seem that reforms which liberalise market access and enhance the role of market-based mechanisms contribute and are conducted in parallel to a reduction in administrative procedures and burdens. And in a less burdensome environment, endorsement for further reforms may be more forthcoming, leading to a virtuous cycle. Work on this report was launched by the OECD’s Working Party on Regulatory Management and Reform as part of the work programme of the Public Governance Committee. The report was prepared in the Regulatory Policy Division of the Public Governance and Territorial Development Directorate by Fiorenza Barazzoni, Fabienne Cerri and Glen Hepburn, under the supervision of Josef Konvitz and the direction of Rolf Alter. Useful comments have been provided by Lydia Jorgensen. We are grateful to Claire Miguet and her colleagues from the Regulatory Quality Indicators project for their contribution in terms of comparative charts and tables. Following discussion at the meeting of the Working Party on 18-19September2006, Flemming Norling Olsen prepared the report for publication; Jennifer Stein was responsible for the editing and final document preparation. The report has benefited from input from many country experts, national officials and Delegates of the Working Party. 4 CUTTING RED TAPE: NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION – ISBN 92-64-02978-8 – © OECD 2006 TABLE OF CONTENTS Table of Contents Summary............................................................................................................ 9 Introduction....................................................................................................... 17 Chapter 1.Simplification Strategies............................................................... 19 Simplification strategies are part of broader regulatory quality objectives........................................................................................................ 20 Improving rule making ex ante.................................................................... 25 Regulatory impact assessment............................................................... 28 Further procedural checks...................................................................... 31 Controlling the flow of new regulation................................................. 32 Reviewing existing burdens ex post............................................................ 33 Targeting simplification efforts.............................................................. 33 Anchoring simplification strategies on quantitative evidence......... 39 Implementing simplification strategies..................................................... 48 Commitment to simplification efforts.................................................. 48 Simplifying regulation............................................................................. 50 Conclusions.................................................................................................... 55 Notes............................................................................................................... 56 Chapter 2.Simplification Tools....................................................................... 59 Introduction................................................................................................... 60 Electronically-based delivery mechanisms............................................... 61 From traditional physical one-stop shops to centralised government portals.................................................................................. 62 Joining-up e-government services......................................................... 67 Data-sharing and standardisation......................................................... 71 Process re-engineering................................................................................. 74 Simplification of licensing procedures.................................................. 75 Facilitating compliance........................................................................... 79 Conclusions.................................................................................................... 81 Notes............................................................................................................... 82 Chapter 3.Institutional Frameworks............................................................. 85 Introduction................................................................................................... 86 Single purpose entities................................................................................. 86 CUTTING RED TAPE: NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION – ISBN 92-64-02978-8 – © OECD 2006 5 TABLE OF CONTENTS Administrative simplification agencies..................................................... 87 Regulatory reform agencies......................................................................... 88 External committees..................................................................................... 90 Permanent bodies..................................................................................... 90 Temporary or adhoc taskforces.............................................................. 91 Multilevel co-ordination............................................................................... 93 Conclusions.................................................................................................... 94 Notes............................................................................................................... 95 Conclusions and Future Directions.............................................................. 97 Bibliography....................................................................................................... 101 Annex 1. Institutional Bodies in Charge of Administrative Simplification.................................................................................. 103 Annex 2. The Standard Cost Model in European Countries..................... 106 Boxes Key points................................................................................................. 15 1.1. 2005OECD guiding principles for regulatory quality and performance..................................................................................... 21 1.2. Administrative simplification in developing countries..................... 23 1.3. Portugal’s2006 legislative and administrative simplification programme............................................................................................... 26 1.4. New laws strengthened exante control in Germany, Greece and Italy....................................................................................... 27 1.5. OECD guidelines for an effective RIA................................................... 29 1.6. Simplification strategies in the United Kingdom............................... 39 1.7. The SCM Network................................................................................... 42 1.8. The Standard Cost Model Methodology............................................... 43 1.9. Benchmarking with the Standard Cost Model.................................... 44 1.10. Measurement efforts in Belgium and France...................................... 47 1.11. Simplifying regulation............................................................................ 51 1.12. Facilitating simplification of EU legislation......................................... 55 2.1. E-government and administrative simplification.............................. 61 2.2. Adele programme on electronic administration in France............... 64 2.3. One-stop business portals in Canada, New Zealand and Denmark........................................................................................... 65 2.4. Specialised one-stop portals in Korea.................................................. 66 2.5. E-government initiatives in the United States.................................... 69 2.6. 2005OECD report: E-government for better government................. 71 2.7. Examples of data sharing solutions in OECD countries.................... 72 6 CUTTING RED TAPE: NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION – ISBN 92-64-02978-8 – © OECD 2006 TABLE OF CONTENTS 2.8. Harmonising ICT infrastructure for business in the Netherlands: the ICTAL Programme............................................................................ 74 2.9. Cases of facilitated licensing procedures in the Netherlands and in Denmark....................................................................................... 76 3.1. Australian taskforce on reducing regulatory burdens on business.............................................................................................. 92 Figures 1.1. Institutional body in charge of administrative simplification.......... 22 1.2. Government programmes to reduce administrative burdens.......... 25 1.3. Burden reduction efforts focus mainly on business.......................... 35 1.4. Duration for starting a business........................................................... 36 1.5. Number of procedures for starting a business .................................. 37 1.6. Surveys are used to assess the scope of administrative burdens.... 40 2.1. Techniques to reduce administrative burdens................................... 60 2.2. Simplification of licensing procedures for business.......................... 75 2.3. Programmes underway to co-ordinate the review and reform of permits and licences at sub-national levels of government........ 78 2.4. Programme underway to review and reduce the number of licences and permits required by the national government........ 78 CUTTING RED TAPE: NATIONAL STRATEGIES FOR ADMINISTRATIVE SIMPLIFICATION – ISBN 92-64-02978-8 – © OECD 2006 7