In the face of global crises and complex policy problems, governments have been required to regulate faster and better and attempt to build a sense of shared policy ownership. Giving the opportunity to business, citizens and the public to shape, reform and challenge regulations is important to improve the design and quality of regulations.

When regulations are designed well, they can help to boost growth, tackle climate change, and enhance well-being. When not, they can result in unnecessary red tape and reduced trust in government action. Regulations should be clear, sound, and take into account a range of views. Regulatory impact assessment (RIA) supports decision-making by providing objective information about the likely benefits and costs of policy proposals. It is a tool to help governments create transparent, evidence-based policies. All OECD countries require RIA for some prospective regulations.

All regulations are designed to induce behaviour. However, some work as intended, while others may not. Further, some regulations are introduced without the benefit of testing and public review (see section on regulatory impact assessment). Governments have often needed to act quickly, such as during COVID-19, introducing measures with limited information about regulations’ potential impacts. Regulations may also have unexpected consequences or fail to rectify underlying problems. Evaluations provide a performance check on regulations. They can help to improve the overall regulatory system by increasing its coherence. They also offer an opportunity for stakeholders to bring forward problems and propose solutions. Evaluations can improve transparency, accountability, and compliance with regulations.

Policy challenges are increasingly transcending national borders. Examples range from dealing with a global health crisis, climate change and biodiversity to consumer safety or protection of personal data. These challenges cannot be addressed by countries unilaterally. This is why international regulatory co-operation (IRC) has become central to policymaking and regulatory policy, as it enables governments to collaborate on common problems and learn from each other. In June 2021, the OECD adopted a recommendation on how countries can effectively adopt IRC. This recommendation is built around three pillars: 1) taking a whole of government approach to IRC, 2) recognising IRC throughout domestic rulemaking, and 3) co-operating internationally through a variety of mechanisms.

Economic regulators exist to support the efficient delivery of essential services such as energy, e-communications, water and transport to society. Often set up as independent bodies to signal a commitment to long-term policy goals, they occupy a unique position between consumers, operators and government. This is why their governance matters, including their resources. Resourcing arrangements can make or break their effectiveness and are crucial to the overall success of regulatory frameworks to improve sector outcomes.