SibelGuven

RIA and the Consultation Mechanisms: 

tepav türkiye ekonomi politikaları araştırma vakfı RIA and the Consultation Mechanisms Sibel Güven, Ph. D. İstanbul - May 24, 2007

Agenda: 

Agenda The ‘Transformation Process’ in Turkey ‘Better Regulation’ agenda ‘RIA’ as a ‘Better Regulation’ tool The importance of ‘Consultation’ RIA applications in UK and EU Consultation from the civil society viewpoint A case from Turkey

A new era for Turkey: 

A new era for Turkey Two very general questions… Why is today different from yesterday? And how can tomorrow be different from today? Reform agenda Macroeconomic reforms are on the way However, there are ‘winners’ and ‘loosers’ of the reform process The new role of state The need for micro reforms and regulations

Drastic change in Turkey’s economic environment since 2001: 

Drastic change in Turkey’s economic environment since 2001 Industrial production, interest rates and inflation in Turkey, 1999-2006 Source: Central Bank of Turkey

Rapid integration into the global economy: 

Turkey’s total trade volume (in billion USD) and trade/GDP ratio: 2000-2006 Source: Undersecretariat of Foreign Trade Rapid integration into the global economy

Do we have to regulate? : 

Do we have to regulate? The rise of the ‘Regulatory State’ The ‘do nothing’ option can sometimes be the best policy option ‘Market failure’ needs to be balanced against ‘Regulatory failure’ Prescriptive regulation The need for new public sector management Source: Kirkpatrick, 2007

Better Regulation: 

Better Regulation World Bank ‘Better regulation does not always mean less regulation’ ‘Investment climate improvements are about improving the quality of governance and policymaking’ UK’s Better Regulation Executive ‘RIA is a key tool in delivering better regulation. The RIA process will help departments deliver successful policy’

Slide8: 

In developed economies the primary goal tends to be to increase economic efficiency. In developing and transition economies there are other goals, namely: economic development poverty reduction ensuring a universal, basic service meeting the requirements of donor agencies Better Regulation Source: Kirkpatrick, 2007

Slide9: 

RIA as threat better regulation is essential for competitiveness more informed policy-making is necessary to avoid potentially adverse social and environmental impacts of rapid change smoother passage of laws through cabinet and parliament a catalyst for reform and strengthening of the entire administrative structure develops individuals as effective policy-makers RIA as opportunity workload changes of responsibility need for new skills transparency of decision-making RIA: A threat or an opportunity? Source: Kirkpatrick, 2007

OECD RIA Checklist: 

Is government action justified? Is regulation the best form of government action? Is there a legal basis for regulation? Is the problem correctly defined? What is the appropriate level (or levels) of government for this action? Do the benefits of regulation justify the costs? Is the distribution of effects across society transparent? Is the regulation clear, consistent, comprehensible, and accessible to users? Have all interested parties had the opportunity to present their views? How will compliance be achieved? OECD RIA Checklist Source: OECD, 1995

Slide11: 

The RIA Process Source: Kirkpatrick, 2007

A closer look at consultation (1): 

A closer look at consultation (1) The need for consultation State as the balancing actor Transparency Accountability Consistency Maximizing social welfare Consultation as a compliance tool Source: Kirkpatrick, 2007

A closer look at consultation (2): 

Regulation has many stakeholders: consumers investors government suppliers competitors donor agencies Each has its own set of objectives/demands, and each one may be affected differently How do we decide between them? A closer look at consultation (2)

A closer look at consultation (3): 

Dangers of regulation: Regulatory capture Political capture How do regulators retain ‘independence’? To what extent should regulators be ‘independent’? What about regulatory accountability? Accountable to whom? Parliament, Minister, Competition Authority, Other? A closer look at consultation (3) Source: Kirkpatrick, 2007

Consultation Mechanisms (1): 

Consultation Mechanisms (1) Adopt RIA at the highest political levels – build commitment Establish explicit standards for assessing regulatory quality and regulatory decision making. Develop ownership of the method at the departmental level. Establish procedures to ensure RIA is built into the process of regulatory appraisal. RIA must not be seen as either a “burden” or irrelevant “add on”. Establish procedures for systematic public consultation. Establish methods for prioritizing where detailed RIAs should be applied. Source: Kirkpatrick, 2007

Consultation Mechanisms (2): 

Consultation Mechanisms (2) Basic questions Why consult? Learning Collective Learning Advocacy - Compliance What do we want to talk about? Values and principles Problem justification Who do we want to talk with? Engage with people who have information Evidence Enriched understanding When should we talk? An ongoing process for different purposes (learning vs. advocacy) How should we communicate? Multiple ways might be employed simultaneously Source: Milligan, 2003

RIA in the UK: 

RIA in the UK Mandatory for UK government departments since 1998. Championed by the Better Regulation Task Force (BRTF) within the Cabinet Office. The BRTF was replaced by the Better Regulation Executive (established in May 2005) and the Better Regulation Commission (January 2006) Source: Kirkpatrick, 2007

RIA in the UK: 

RIA in the UK The BRC provides independent advice to government about new regulatory proposals and reviews the government’s overall regulatory performance. The BRE (in the Cabinet Office) has responsibility for implementation of the government’s regulatory reform programme. Source: Kirkpatrick, 2007

Consultation criteria in UK: 

Consultation criteria in UK Timing of consultation should be built into the planning process It should be clear who is being consulted, about what questions, in what timescale and for what purpose. A consultation document should be as simple and concise as possible. It should include a summary, in two pages at most, of the main questions it seeks views on. It should make it as easy as possible for readers to respond, make contact or complain. Documents should be made widely available, with the fullest use of electronic means, and effectively drawn to the attention of all interested groups and individuals. Sufficient time should be allowed for considered responses from all groups with an interest. Twelve weeks should be the standard minimum period for a consultation. Responses should be carefully and open-mindedly analyzed The results made widely available, with an account of the views expressed, and reasons for decisions finally taken. Departments should monitor and evaluate consultations designating a consultation co-ordinator who will ensure the lessons are disseminated. Source: OECD, 2002

Impact Assessment in EU: 

Impact Assessment in EU Introduced in 2003 on trial basis. Fully implemented in 2005, supported by Impact Assessment Guidelines (June, 2005) An Impact Assessment is required for all items on the Commission’s Work Programme: - All regulatory proposals (new and revisions) - Policy defining documents ( White Papers, Action Plans, Communications setting out strategic orientations, negotiating guidelines for international agreements) - Expenditure programmes IAs are undertaken by an inter-service Steering Group Consultation with stakeholders as an integral part of the IA procedures Source: Kirkpatrick, 2007

Consultation procedures in EU (1): 

Consultation procedures in EU (1) Aim ensuring transparency enhancing workability and legitimacy for all Consultation plan ongoing consultation throughout all analytical steps of RIA the objective of the consultation relevant target groups appropriate consultation tool consultation time consultation document Analytical Steps of RIA Identify the problem Define the objectives Develop main policy options Analyze their impacts Compare the options Outline policy monitoring and evaluation Source: EC, 2005

Consultation procedures in EU (2): 

Consultation procedures in EU (2) Consultation tools consultative committees expert groups open hearings ad hoc meetings consultation via Internet questionnaires focus groups seminars/workshops Interactive Policy Making (IPM) Source: EC, 2005

Counter Arguments against European Commission’s IA Guidelines: 

Counter Arguments against European Commission’s IA Guidelines Alliance for a Competitive European Industry opposes on how to consult Closed questions – “over simplistic and lead to misinterpretations” Public online consultations – “transperancy not a substitute to representative consultation of the general public” favors open consultations together with constructive dialogue with policy-makers an independent auditory body is needed to watch the quality of IA Consultation fatigue should be avoided Source: ACEI, 2005

Civil society viewpoint: 

Civil society viewpoint Civil society organizations (CSOs) expresses the interests of social groups raises awareness of key issues in order to influence policy and decision-making through, advocacy campaigns mobilization of people and resources. RIA and CSOs have joint objectives; Civil society involvement in policy-making Accountability and transparency

TEPAV’s interest on RIA (1): 

TEPAV’s interest on RIA (1) The Economic Policy Research Foundation of Turkey (TEPAV) is an independent, non-governmental and non-partisan think-tank, established in October 2004 TEPAV intends to increase the knowledge content of policy discussions in Turkey remove the gap between academic research and policy implementation.

TEPAV’s interest on RIA (2): 

TEPAV’s interest on RIA (2) Thus, TEPAV also have common objectives with RIA Capacity building for RIA and Better Regulation Enhancing coordination between the stakeholder organizations Studies conducted by TEPAV on RIA TEPAV | MOD Computable General Equilibrium (CGE) Model Studies EU funded project on impact assessment Strengthening the capacity of impact analysis, awareness raising and implementation on environment in the EU accession process

Aim and scope of the project: 

Aim and scope of the project Objectives Raising awareness on impact assessment among the decision-makers in public and civil society organizations Educating officials from the corresponding organizations Strengthening impact assessment capacity through a micro model application Micro model Impact assessment on the harmonization of LCP Directive (2001/80/EC) in lignite-fired power plants of Turkey Pioneering the consultation process among the stakeholder organizations

Problem definition (1): 

Problem definition (1) Fiscal discipline Privatization Security of supply Import Dependence EU acquis Better Quality of Life Treasury, MoFinance, SPO Limit investment MoEnergy Produce energy MoEnvironment Limit emissions EÜAŞ

Problem definition (2): 

Not a simple problem Needs a comprehensive consultation process Stakeholders Chamber of Environment Engineers Chamber of Electrical Engineers Electricity Generation Co. Inc. Energy Market Regulatory Authority Ministry of Agriculture Ministry of Health Ministry of Industry and Trade Problem definition (2) Ministry of Industry and Trade Ministry of Energy and Natural Resources Ministry of Environment and Forestry State Planning Organization Turkish Coal Enterprise Turkish Treasury Union of Chambers and Commodity Exchanges of Turkey Union of Turkish Doctors United Nations Development Programme

Consultation: Design: 

Consultation: Design Conflict of interest Allocation of scarce resources Insufficient consultation among the stakeholders Two important bodies Steering Commitee Working Group

Consultation: Steering Committee: 

Consultation: Steering Committee Shared reasoning instead of conflict of interests… Steering committe, Enhancing the institutional commitment for cooperation and share of data Monitoring the studies of the working group Controlling and approving the outputs of the project

Consultation: Working Group: 

Consultation: Working Group They are intended to be the pioneers of impact assessment in their organizations Working group; Trained on RIA at the beginning of the project Will be the agents of the cooperation Sharing institutional data, expertise and knowledge

Lessons learned : 

Lessons learned The idea of ‘shared reasoning’ instead of ‘conflict of interests’ has to become widespread RIA seen as either a “burden” or irrelevant “add on”. This must be changed The scope of compulsory RIA must be broadened including all costly legislations and secondary regulation A consultation mechanism has to be designed in Turkey Consultation as a compliance tool Collective learning Consultation fatigue

Slide34: 

Türkiye Ekonomi Politikaları Araştırma Vakfı Söğütözü Cad. No:43 TOBB-ETÜ Yerleşkesi TEPAV Binası 06560 Söğütözü – Ankara Tel: 312 – 292 5500 Fax: 312 – 292 5555 www.tepav.org.tr Dr. Sibel Güven - sibel.guven@tepav.org.tr