C.H. Montin, Manama, 20 January 2014 11 Manama, 20 January 2014 Regulatory Impact Assessment Defining the problem Charles-Henri Montin, Senior Regulatory.

C.H. Montin, Manama, 20 January 2014 11

Manama, 20 January 2014

Regulatory Impact AssessmentDefining the problem

Charles-Henri Montin, Senior Regulatory Expert,

Ministry of economy and finance, Paris

Delegate to OECD RPC

http://smartregulation.net

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Summary

Step 1: Identify the issue– Importance of a good definition of the

problem (issue)– Example (motorbike accidents)– How to identify and characterize the issue– Example (rice paddies)– Establish the need and rationale for action

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Stages of the RIA process

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Importance of Defining the Problem/Issue

Problem Definition: example

There are many road accidents caused by motorbike drivers on the roads. The main reason for this is motorbike drivers who do not have the ability to control their motorbikes.

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Draft legislation prepared with no RIA

The Ministry of Health (of country X) plans to introduce a new regulation that states only people who weigh over 40kg, and have a height of over 1.45m and a chest size under 73cm would be allowed to ride motorbikes on the road with engine sizes of 50cc and above.

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Correct Analysis

Appropriate Problem Definition

At least 30 people die everyday from transportation-related incidents, and many more are seriously injured. Almost 70% of these accidents are caused by motorbike drivers. The majority of these accidents (67%) are caused by drivers either speeding, or driving while under influence of alcohol. And 81% of the accidents are caused by men.

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Identifying the Issue

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Brainstorm the Issues

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Define the Problem to Solve

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Establish need for action and rationale for intervention

Establish need for action (new regulation or policy):– Are there deficiencies in the regulations?

e.g. a missing constitutional mandate, a legal vacuum produced by a a court ruling, a legislative mandate to develop regulation, a need to fulfill an electoral promise, etc.

Is there a market failure ?– e.g. prices do not reflect the real costs and

benefits to society ( "externalities" ); – insufficient supply of public goods; – little or no competition; – information insufficient for decision-makers

( including consumers and government )

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Problem definition: the process

Identify and describe the issue– evidence about the nature of the problem– probability of the problem arising and frequency– who is impacted?– who is best placed to manage/resolve the problem

Analyze and list the causes (examples)– longstanding known causes– new opportunities due to science and technology,– changes in attitudes– new awareness

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How to define the Problem

When did the problem begin? What is the scale of the problem? Who is impacted by the problem? What regulations exist? Why is government intervention required?

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Example

Problem Definition

There is a concern about Food Security due to the urbanization of agricultural land, particularly rice paddies.

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Consequence of no RIA

Ministry of Agriculture and Rural Development is proposing to increase the level of compensation payable to land owners of rice paddy fields to:

1) Deter developers from purchasing rice paddy fields

2) Provide higher and more equitable price for rice paddy fields

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Correct Analysis

Appropriate Problem Definition

The production of rice is not an attractive business. The profitability of rice production is low. Often rice paddy fields vary in quality and are therefore also inefficient in their production. Therefore owners of rice paddy fields are choosing to sell their land and find another source of income, possible in urban areas.