An Idea Whose Time Has Come:A Regulatory Budget AndStrategic Regulatory Agenda Presented by Professor Bruce DoernSchool of Public Policy and Administration, Carleton University and Politics Department, University of Exeter (UK) Halifax, Nova Scotia, September 29-30, 2008
Introduction and Overall Purposes • To outline and comment on recent commitment of British government to a regulatory budget • To compare the UK development to my argument for an annual strategic federal regulatory agenda in Canada (drawing on my recent book for the Conference Board of Canada) • See Bruce Doern, Red Tape, Red Flags: Regulation for the Innovation Age (Conference Board of Canada, 2007) • To relate both to U.S. debate and ideas on regulatory budget that were never adopted
The British Commitment To A Regulatory Budget (A Cap On Private Sector Costs Of New Regulations Over A Defined Period) • Emerged in 2008 with Prime Ministerial backing • Process to be led by Department of Business Enterprise and Regulatory Reform (BERR) • Designed for 2009 start-up trial run and fully operational in 2010 • Consultation process underway at present
The UK System as a Whole • British Cabinet would set Reg budgets by department but with eye out for horizontal items such as climate change • Reg budget period would be 3 to 5 years • UK regular spending budget already has 3 year cycle • Flexibility will be built in across and within years, among departments and with regard to exceptional circumstances • Documents to date do not systematically discuss the nature or dynamics of politics of agenda-setting implied in the Reg budget idea
Issues Of Scope • Include all the costs associated with regulation that have an impact on a business or third sector organization • Rules governing public service provision (internal regulation) will not be included • Regulations originating in EU will be covered • Economic or independent regulators will not be included • Regulation will be defined to include statutes and delegated law (the Regs) but not guidelines and codes
UK Methodological Issues • UK proposed that Reg budgets take account of direct and indirect costs as well as benefits, including possible unintended effects, and across all sectors of the economy • Budgets to be set on gross cost estimates of regulation (i.e. estimated benefits will not be netted off from gross estimates for the purpose of setting budgets • Information from “RIAS” on proposed new Regs will provide underpinning
Regulatory Budget Debates In United States • Late 1970’s studies by U.S. Office of management and budget: ceiling on new regulation compliance costs • Linked to ultimate achievement of full and complete fiscal budget (Regs are “off-budget” mandated spending imposed on businesses and private sector overall) • Reg budget never adopted in U.S. for reasons of lack of data on costs, stakeholder concerns, and lack of political will in “separation of powers” political system • But some analytical use in negotiations over early 1990s amendments to clean air act and safe drinking act • A strategic regulatory agenda in Government of Canada
Basic Nature and Context of My Conference Board Book and Argument • Current realities of complex multi-agency “regimes” of regulation rather than one regulator at a time • Rapid changes in technology and knowledge • Need to better manage and rank risks and risk-benefit opportunities • Changing nature of science-based regulation in government • Did not discuss regulatory budget but did advocate need for annual strategic regulatory agenda and analyzed dynamics and politics of such an agenda • Recommend related institutional reform: a regulatory and risk review commission (to review regulatory developments from new technologies, compare and assess risks and develop and publish better regulatory data)
Nature and Limits of Current Federal Regulatory Policy • The limits of the “one regulation at a time” approach • The limits of the periodic regulatory reform approach • Recent changes but still “one regulation at a time” E.g. directive on streamlining regulation and life cycle approach • Comparison with tax and spending systems which do have an annual strategic agenda
To What Extent Does Regulatory Agenda-Setting Occur Now? • The agenda setting that goes on within departments that have major science-based regulatory tasks and within other particular regulatory bodies; hidden and not aggregated. • The RIAS process within departments: is it a latent agenda-setting system? Potentially an aid but certainly not at present. • Departmental reports on plans and priorities, which are submitted during the annual expenditure process; some regulatory initiatives noted but mainly about spending. • The Throne Speech and related priorities regarding legislative bills that go before the House of Commons; some periodic regulatory content but mainly key overall policy themes and values are communicated. • The recent launch of an experimental “triage” process, whereby departments are invited on to differentiate high, medium and low priorities for regulations, which will then receive different levels of regulatory focus and resource support. Implies some kind of partial priority-setting but not aggregated across government.
What Would A Reg Agenda Look Like? • A process whereby all proposed new regulations from across federal departments and agencies would be aggregated annually and priorities determined at the Cabinet level; • A determination of what would be included as proposed new “regulations”; laws? Delegated law (the “Regs”)? Guidelines? Standards and codes? • A provision and processes for handling contingencies and emergencies requiring new regulations; • An appreciation of the many possible criteria that might legitimately be used to distinguish high-priority from low-priority new regulations; (current tax and expenditure agenda-setting faces similar challenges but governments do have tax and spending annual agendas despite these challenges) • An annual ministerial “regulatory agenda statement” and debate in the house of commons; need for public debate and accountability • A consideration of whether such an agenda process should be a separate, stand-alone one, or one that is appended to the existing tax or spending agenda process to avoid duplication in matters such as stakeholder consultation or for other reasons.
Conclusions • The absence of a strategic regulatory budget and agenda is a serious macro gap in overall governance and policy making • The British commitment means that the idea of a regulatory budget (and a strategic agenda) has arrived • The British development has to date not examined what the actual politics of agenda-setting will be under a Reg budget • Does the proposed Canadian Regulatory Agenda require a Reg budget to make it work? • An annual Reg budget/agenda versus a multi-year Reg budget/agenda? • Opportunities for “gaming” in Reg budget • Can current micro-based “RIAS” analysis underpin the information needs for a reg budget and a strategic agenda? • Micro cost-benefit analysis versus macro “cost-risk-benefit” regulatory agenda based on analysis and the arts of political-economic judgment