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REGULATORY GOVERNANCE

To be or not to be

Anwarul Islam
A new government has taken over with huge mandate. We are on the threshold whether we will continue the regulatory reform initiative ignited by the immediate past caretaker government.
The government appears to be hesitant and wonder what would have happened ifit had chosen the path differently. A choice is very important here and it will make a big difference.
The potential impact of reform is very significant. Countries can increase GDP growth rates by up to 2-5 percent by improving regulatory practices. Least developed and developing countries have the most business unfriendly regulatory frameworks and therefore the most to gain from regulatory reform. Badly designed and administered regulations impose major constraints to growth and productivity and create strong incentives for small businesses to remain in the informal economy.
Regulatory governance is firmly grounded in the wider concept of good governance and embraces issues such as transparency, accountability and efficiency. This governance briefly refers to the way governments use their regulatory powers in the pursuit of policy objectives.
In practical terms regulatory governance can be broken down to a number of specific policies and tools, such as an explicit regulatory policy setting out priorities and target of reform and establishment or strengthening of regulatory institutions, i.e. drivers of reform such as Regulatory Reform Units in the centre of government.
There arc no easy answers to the question of how to achieve successful regulatory reform. However, recent DFID and F1AS case studies of regulatory reform point to a number of lessons for successful regulatory reform. These include designing successful reform strategies, which requires a concrete understanding of the fundamental political econ-
omy issues that shape the drivers of change. Such designing also requires understanding the capacity of government and the private sector, the culture of government, how policy making currently happens and the extent to which institutions and mechanisms are in place for healthy dialogue and accountability with the private sector and others.
Besides, explicit and strong high-level political leadership of the reform process is essential
There should be sufficient flexibility in the regulatory reform strategy to take advantage of windows of opportunity e.g. a political change towards a more reformminded government.
Metaphorically illustrating the challenge, Peter l^degaard. regulatory governance coordinator of HAS, said in an article that it is like a
Regulatory Swimming Pool, key features of which are: clean the pool (Regulatory Stock), ensure quality of new water (Regulators' Flow), watch that everyone behaves (Institutions) and make good rules and communicate them (Regulatory Reform Strategy).
He identified scrap-and-build, process reengineering, quantitative targets, staged repeal (guillotine) and review/sunset clauses as Stock, RIA, public consultation, forward planning, administrative procedure law and silence is con-sent/dcnial as Flow, and central unit for regulatory reform, government reform committee, business advisory council, regulatory registry and central licensing authority as Institutions.
TWo of the Asian fast-track economic miracles- South Korea and Vietnam- are reaping the
benefits of regulatory reform. With introduction of reform, the number of regulations in South Korea fell from 10,554 in 1998 to 7,812 in 2003 and 5.112 in 2007. The cost of establishing and operating business has fallen drastically due to fewer administrative regulations.
Simplified regulations have decreased the time and number of tasks necessary to establish a business by 40 percent and reduced administrative costs tenfold.
Vietnam, with GDP growth of more than 8 percent during the last three consecutive years, had 5,275 regulations in the ministerial, (central) level. After introduction of reform, it has put 3,737 regulations In the Guillotine, as against 2.268 documents are created. On provincial level, the country had 52,627 regulations. 33.816 of them were placed in the
Guillotine, out of which only 3,011 were created. Another outcome of Vietnam reform is that it has completed and published on the internet a national centralised database of all regulations, forms and related documents for businesses and citizens. Vietnam hopes to complete regulatory review by' the year 2010 through the basis of legality, necessity and reasonableness.
The positive outcome of regula-tory reform in Bangladesh includes availability of all laws (acts of parliament) till November 2008 in the official website (www.bdlaws.gov.bd). Besides, 5,500 out of around 10,000 SROs were scanned so far. After completion of the whole work at the initiate of IFC-B1CF, we hope to get an e-registry. All the official gazettes are now published in the BG Press Website (www.bgpress.gov.bd). The government has changed its Rules of Business requiring for pre-publication of all rules and regulations. It is a good start.
The Regulatory Reforms Commission (RRC) created by an executive order in 2007 with an extended life till 29 October 2010 has submitted its first report to the government in February 2009. RRC, among others, recommended for establishing a legal structure making mandatory Regulatory Impact Assessment (RIA), a widely accepted tool to improve the efficiency, transparency and accountability of regulatory decision- making.
Now we are waiting for breakthrough new’s from the government that has a vision to make Bangladesh digital by 2021. If it switches green-signal for sustaining the regulatory reform. RRC is expected to be the forerunner in the regulatory governance regime. RRCs present terms of reference should also be widened to cover all issues and instruments including laws having regulatory effect.
The writer, a member of Regulatory Reform Core Group, can be reached at anwarislam7@yahoo.com