OECD scores show Ireland must try harder on regulatory impact assessments

It is not just on taxation that the Organisation for Economic Co-operation and Development (OECD) is affecting Ireland's policy-making and public affairs. It is suggesting a new regulatory body. Specifically, the OECD is pushing for Ireland to establish a central body to perform core oversight functions, such as reviewing the quality of regulatory impact assessments and other regulatory management tools.

In essence, regulatory impact assessments (RIAs) provide for a systematic appraisal of the potential impact of new regulations to assess whether they are likely to achieve the objectives set for them. In June 2005, these assessments were introduced by the Irish government as a formal process. From that point on, all government departments and offices are required to conduct an assessment ahead of primary legislation involving changes to regulations.

There are some good examples.

The Department of Business, Enterprise and Innovation’s assessment on the Copyright and Other Intellectual Property Law Provisions Bill 2018 assessed in a practical way the options for modernising aspects of Ireland’s copyright legislation.

Corporate tax: Ireland’s version of Norwegian oil

---

Irish GDP numbers surprise on the downside

---

Economic damage from fresh restrictions will play out in Scarp deals next year

---

Mortgage approvals fall in October

---

And the Department of Transport has just produced a practical assessment on The Merchant Shipping (Investigation of Marine Casualties) (Amendment) Bill 2021. It examines the options in relation to amendments to legislation that underpins the Marine Casualty Investigation Board, facilitating the appointment of new members to the board and supporting the independent functioning of the board as the marine casualty investigative body in the State.

But while it is quite clear that regulatory impact assessments are being prepared, they are not always published.

In a reply to a parliamentary question in September, Ivana Bacik was informed that 29 regulatory impact assessments were prepared by government departments between the end of June last year and mid-September this year, but only 16 of them were published.

This is despite provision in the official regulatory impact assessment guidelines that “all RIAs prepared in line with the government decision on RIAs must be published”.

The number of assessments being published is one thing; the quality of them is another matter.

‘Box-filling’

One suspects a certain amount of “box-filling”. The Cabinet Handbook, the internal government guide for ministers, does specify that any submission seeking approval for legislation involving changes to the regulatory framework must be accompanied by a regulatory impact assessment. However, the handbook is silent as regards the quality of such assessments.

The European Union, however, is not mute about the quality of its impact assessments. Since 2006, the European Commission has been tackling the transparency issue by having its own Impact Assessment Board provide independent quality control of impact assessments.

In published results, the board’s 2020 annual report shows that nearly half of all impact assessments submitted did not meet the quality standards expected when they were first submitted to the board. That means nearly half of the impact assessments were sent back to be re-worked before being resubmitted to the board.

The OECD in its 2021 Regulatory Policy Outlook discusses how regulatory practices can be improved on the basis of what has been learned from the experience of the pandemic. It includes regulatory advice for Ireland.

The advice follows an analysis of Ireland’s regulatory performance. It is measured under four headings. Ireland does quite well under adoption (consistently doing regulatory impact assessments) and methodology (guidelines for doing them). However, it does only moderately well in terms of transparency (ie the public availability of the assessments). And the score of only 0.15 for oversight is particularly low (see panel).

OECD’s Regulatory indicators for Ireland for 2017 score (maximum: 1)

1 Adoption How consistently are the RIAs now being undertaken? 0.80
2 Methodology How good or bad is RIA methodology being used? 0.73
3 Transparency To what extent are RIA made publicly available? 0.41
4 Oversight If there is an oversight body, how effective is it now? 0.15
5 Overall Score Summation of scores from the four sub-categories 2.09/4

While the first two scores are quite high, it should be pointed out that having a good set of guidelines, and evidence that assessments are being completed, tell nothing about the quality of the assessments.

The third score suggests considerable weakness in terms of visibility of regulatory impact assessments. And it is the quality of assessments that matters.

As for the oversight score, it is very poor. In response, the OECD suggests the establishment of an oversight body. Specifically, it states: “In order to more effectively monitor and assess the quality of RIA implementation, Ireland should consider establishing a central oversight body to perform core oversight functions, such as reviewing the quality of RIA and of other regulatory management tools.”

Of course, it doesn't have to be a new body. The oversight function could be tagged onto the Department of the Taoiseach or to the Law Reform Commission.

But whatever form the function takes, there is a better chance government departments will make more serious efforts in their regulatory work if they know the results of that work is going to be published.

Tom Ferris is a consultant economist specialising in better regulation and a formerly senior economist at the Department of Transport