How to Assure Better Regulation --

1. How to Assure Better Regulation -- The Programme for the Reduction of Bureaucracy and Better Regulation of the German Federal Government Stephan Naundorf Federal Chancellery, Better Regulation Unit stephan.naundorf@bk.bund.de 19 February 2007, Brussels

2. Guiding Theses • All former initiatives were rated by government as a success, though many stakeholder’s notion is still, nothing has changed. • Bureaucracy is difficult to be “caught”, thus we need to provide “objective” evidence for the reduction of “bureaucracy”. • Decentralized initiatives have decentralized results, thus we need central coordination, if we want to reach full scale effects. • There is no single source, no single reason for the perception of red tape, many stakeholders and individuals have to be involved. • Deregulation is a highly political processes, whilst reduction of bureaucracy aims for the smartest way to achieve given purposes. • If we expect others to fight red tape, we well advised to start successfully in our own backyard first.

3. The Programme • “Programme for the Reduction of Bureaucracy and • Better Regulation” (Cabinet decision of 25 April 2006) • Undertaking of the Federal Government to cut measurably the costs • of bureaucracy which arise for companies, citizens and administration • SCM as obligatory method to measure administrative burdens;incl. baseline valuation, ex ante assessments, contin. evaluation • Implementation of a Regulatory Control Council (RCC) • Implementation of a Committee of State Secretaries and a central Coordinator of the Federal Government for the Reduction of Bureaucracy and Better Regulation to steer the entire process • "Small Companies Act“ as a first step

4. The Standard Cost Modell in Germany Law / Regulation Information Obligation Administrative Activity (as required by regulation) Time Tariff Target Group Frequency Quantity of Administrative Activities Price of Single Administrative Activity (incl. necess. depreciation) Administrative Burdens = Price x Quantity

5. Parties Involved

6. Legislative Process and SCM proposal for new regulation by ministry(SCM assessm’t) generalapprovalby ministri- es + RCC draft of Federal Government to Parliament consultations in Parlia- ment (both chambers) final law signing, promul-gation law in effect body of regulation SCM baseline valuation ex anteassessm‘t- to be approvedby RCC withRCC comments(if applicable) SCMevaluationby FederalStatistical Off. SCM-Accounting and -Reporting (annual to Parliament) of Federal Government

7. Today‘s Status • Independent Regulatory Control Council implemented by federal law and established as cooperative partner/advisor in legislation • More than 10.000 information obligations for businesses identified and registered in central database; information obligations for citizens and administration will be identified soon • Database shared with and evaluated by federal ministries and stakeholders (economy, state and municipal governments) • Kick off for full scale SCM-baseline valuation in Jan 2007 • Ex ante assessment for new regulation established in Dec 2006 • Most burdensome legislation will be valuated by Summer 2007 • Simplification starts in 2007; effects to be valuated

8. Success Factors • High Expectations of Public, Continuous Attention by Chancellor • Transparency of Process and Results • Cooperation Rather than Control/Public Advice • Administrative/Legislative Experts and ext. Stakeholders Involved • Uniform, Binding Methodology; Central Database and Accounting • Centralized Project Management • Focus on Information Obligations • But: Stakeholder’s notion will stay inconsistent with admin’s perception. “Better Regulation” demands a cultural change, not only data.