Regulatory Impact Assessment (RIA) is used to assess the likely consequences of proposed regulations, and the actual consequences of existing regulations, to assist those engaged in planning, approving and implementing improvements to regulatory systems. It is currently used, to a varying extent, by approximately two-thirds of OECD Member countries but its adoption in low and middle income countries is more recent and limited. One of the research objectives of the Centre on Regulation and Competition (CRC) is to develop an appropriate RIA methodology and to apply this in a sample of poor countries. The purpose of this paper is, as a 'think piece', to help in clarifying such matters as: the nature and principal characteristics of the RIA methodology to be followed; the scope etc. of its subsequent practical application; and other RIA-related, supporting activities to be undertaken, such as awareness raising and capacity strengthening. Part 1 contains a review of existing RIA methodologies and experience in their use. It examines the origins and evolution of RIA in both developed and developing countries, the different types of measures submitted to RIA, and the rationale for using RIA as an instrument for regulatory reform. It summarises the main features of RIA guidance from a number of countries, identifies the main stages to be followed in the RIA process and notes some deficiencies in current procedural practice. It also highlights the importance of 'institutional endowment' and broader issues of regulatory governance in influencing the effectiveness and most appropriate form of RIA in any particular country. The main assessment methods used in RIA are identified and some deficiencies in their scope and practical applications are noted. The methods used to assess the performance of RIA systems, and their findings are reviewed. The review concludes by considering whether OECD 'best practices' are transferable, in their present form, to low and middle countries, and reaches a 'mixed' conclusion. Part 2 uses the main findings from Part 1 as a basis for constructing proposals for the subsequent development and application of RIA methodologies appropriate to developing countries. The proposals are made on the ways in which these should help to shape the development of the proposed RIA methodology. It is emphasised that these proposals are provisional.
Manchester, UK, CRC Working Paper, No. 30, 47 pp.