OECD Regulatory Policy Outlook 2021
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.
Risk-based regulation
Risk-focus and risk-proportionality have been increasingly used by governments and regulators when designing and delivering regulation. Risk helps improve the effectiveness and efficiency of regulation. It is crucial in the perspective of achieving public outcomes at every step of the regulatory policy cycle, while minimising burden and unintended side effects of regulation and rules. The use of risk is however unequally spread across countries and regulatory area. Also, many impediments to its utilisation exist, ranging from resistance in institutions to the over-estimation of the effectiveness of “non-risk-based” regulation. The COVID-19 crisis has shown the obstacles that regulation can pose to response needs when it is not in line with a risk-based approach, nor flexible enough. The chapter discusses how risk prioritisation, objective and data-driven risk assessment, use of new technologies to improve data sharing and analysis, and adequate flexibility/agility can dramatically improve regulatory outcomes.
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