The OECD report on Regulatory Quality in Middle East and North African (MENA) Countries is the first progress report that assesses the implementation of OECD regulatory policy principles in the MENA region. Regulatory policy in the MENA region is an increasing priority as part of the process of building better governance for encouraging and enabling sustainable development, competitiveness and inclusive growth. The report provides recommendations to MENA countries to improve their regulatory capacities to deliver better policy outcomes.

In the course of the finalisation of this review, the country undertook a major political transition, with likely major influences on the better regulation agenda for the country. In the last two months of 2011 and the first months of 2012, the new government led by Mario Monti embarked on wide ranging and in-depth structural reforms aimed to address the economic situation faced by the country. Better and more efficient public administration features high on the reform agenda of the new government.

The economic challenges faced by Italy are significant and have become even more important in the recent context of political turmoil and economic recession. Over the past decade, Italy’s economic growth rate has remained below the European average. Labour productivity is falling relative to other large European economies. Export performance has been mixed. FDI has remained lower than in other countries of similar size. Italy also has a high proportion of employment in small firms, often family firms, which represent about 4.5 million firms, and raise specific challenges.

The current review of Italy reflects contributions from the Italian government and discussions at meetings held by the OECD team with Italian officials and external stakeholders. In the course of the development of this review, the country undertook a major political transition, which is likely to strengthen the impetus for the better regulation agenda. Major initiatives and developments since this transition are referenced in the report, but have not been evaluated.

Regulatory policy may be defined broadly as an explicit, dynamic, and consistent “wholeof- government” policy to pursue high quality regulation. A key part of the OECD’s 2005 Guiding Principles for Regulatory Quality and Performance is that countries adopt broad programmes of regulatory reform that establish principles of “good regulation”, as well as a framework for implementation. Experience across the OECD suggests that an effective regulatory policy should be adopted at the highest political levels, contain explicit and measurable regulatory quality standards, and provide for continued regulatory management capacity.

Regulatory management needs to find its place in a country’s institutional architecture, and have support from all the relevant institutions. The institutional framework within which Better Regulation must exert influence extends well beyond the executive centre of government, although this is the main starting point. The legislature and the judiciary, regulatory agencies and the sub-national levels of government, as well as international structures (notably, for this project, the EU), also play critical roles in the development, implementation and enforcement of policies and regulations.

Transparency is one of the central pillars of effective regulation, supporting accountability, sustaining confidence in the legal environment, making regulations more secure and accessible, less influenced by special interests, and therefore more open to competition, trade and investment. It involves a range of actions including standardised procedures for making and changing regulations, consultation with stakeholders, effective communication and publication of regulations and plain language drafting, codification, controls on administrative discretion, and effective appeals processes. It can involve a mix of formal and informal processes. Techniques such as common commencement dates (CCDs) can make it easier for business to digest regulatory requirements. The contribution of e-Government to improve transparency, consultation and communication is of growing importance. This chapter focuses on two main elements of transparency: public consultation and communication on regulations.

Predictable and systematic procedures for making regulations improve the transparency of the regulatory system and the quality of decisions. These include forward planning (the periodic listing of forthcoming regulations), administrative procedures for the management of rule-making, and procedures to secure the legal quality of new regulations (including training and guidance for legal drafting, plain language drafting, and oversight by expert bodies).

This chapter covers two areas of regulatory policy. The first is simplification of regulations. The large stock of regulations and administrative formalities accumulated over time needs regular review and updating to remove obsolete or inefficient material. Approaches vary from consolidation, codification, recasting, repeal, ad hoc reviews of the regulations covering specific sectors, and sun setting mechanisms for the automatic review or cancellation of regulations past a certain date.

It is not enough to improve regulations themselves, how they are designed and developed, and make them “smarter”. Available evidence and experience shows that how regulations are controlled and enforced is crucial to how the regulatory sphere in general affects businesses and the economy. Inspections and enforcement actions are generally the primary way through which businesses, in particular SMEs, “experience” regulations and regulators. Inadequate approaches or lack of changes in enforcement and inspections can mean that changes in regulations fail to deliver their full benefits. On the contrary, evolutions in inspections and regulatory delivery to make them more compliance-focused, more supportive and risk-based can all lead to real and significant improvements for economic actors, even within the framework of existing regulations. Finally, enforcement and inspections are as much about methods and culture as institutions, and as much about organisational mechanisms as legislation. All these need to change for outcomes to actually improve.

An increasing proportion of national regulations originate at EU level. Whilst EU regulations1 have direct application in member states and do not have to be transposed into national regulations, EU directives need to be transposed, raising the issue of how to ensure that the regulations implementing EU legislation are fully coherent with the underlying policy objectives, do not create new barriers to the smooth functioning of the EU Single Market and avoid “gold plating” and the placing of unnecessary burdens on business and citizens. Transposition also needs to be timely, to minimise the risk of uncertainty as regards the state of the law, especially for business.

Multilevel regulatory governance – that is to say, taking into account the rule-making and rule-enforcement activities of all the different levels of government, not just the national level – is another core element of effective regulatory management. The OECD’s 2005 Guiding Principles for Regulatory Quality and Performance “encourage Better Regulation at all levels of government, improved co-ordination, and the avoidance of overlapping responsibilities among regulatory authorities and levels of government”. It is relevant to all countries that are seeking to improve their regulatory management, whether they are federations, unitary states or somewhere in between.

The Italian Constitution, in its Article 117, establishes the way different matters are subject to State and/or Regional Legislative power. The following list provides a picture of the division of legislative power in the Italian context.