Do the Results of the EU Better Regulation Program Match Its Ambitions?

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The Better Regulation program, built over the past two decades, has allowed the EU to regulate more effectively.

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With European elections on the horizon, and the five-year term of the European Commission drawing to a close, it is timely to reflect on whether efforts to regulate better have been effective. The 2015 Better Regulation program has generated positive results, but dissatisfaction with EU-level regulation continues to permeate the European political landscape. The next Commission needs to build on this progress and maintain the goal of achieving better regulation as a high priority.

Given widespread criticism for producing too many ill-conceived laws in areas better regulated at a national level, the current Commission followed its predecessors in giving high priority to improving regulation and strengthening the law-making framework. In its Better Regulation program of 2015, the Commission made impact assessment, consultation, and evaluation mandatory. All regulatory policy tools were brought under one conceptual and procedural framework so that EU laws would be systematically prepared and reviewed in knowledge of their economic, environmental, and social impacts, minimizing costs and avoiding unnecessary red tape.

The Better Regulation program further strengthened quality control and deployed strategic planning and political oversight measures to reduce the flow of new initiatives. Systematic ex post review of both laws and policy areas, prompted by and benefiting from stakeholder feedback were at the core of the Regulatory Fitness Program (REFIT) which aims to ensure that EU laws remain fit for purpose. The European Parliament and the European Council renewed their commitment to engage in the Better Regulation effort, agreeing to assess the impacts of their amendments to Commission proposals and to support ex post review.

Results are lining up with ambitions. Strategic planning with political oversight halved the number of regulatory proposals made during the current Commission’s first two years compared to the same period under the previous Commission. Impact assessments accompany over 80 percent of proposals going to the legislature. By the end of 2017, 75 percent of all impact assessments were supported by ex post evaluations, compared to 50 percent in 2016. This shows that ex post policy evaluations are being done more systematically, feeding into impact assessments for new laws or amendments to existing ones. Public consultation has also surged. In 2017, 92 percent of impact assessments were supported by open public consultation compared to 38 percent in 2015.

The EU does well by international comparison, being the only Organization for Economic Co-operation and Development (OECD) member ranked highly in all three categories of indicators—regulatory impact assessment, consultation, and evaluation—used in the OECD Regulatory Policy Outlook.

But has this flurry of Better Regulation activity actually supported decision-making and improved policy outcomes? To respond to this question, effectiveness needs to be measured.

Finding a method that would generate meaningful results is challenging. Given that regulation should generate net social benefit, one approach is to use a tally of the net benefits calculated in impact assessments as an indicator of effectiveness. This would be incomplete and misleading in the EU context because not all Commission impact assessments calculate net benefits. Even if there were complete coverage, the calculations would be essentially a paper exercise because the costs and benefits calculated at the impact assessment stage (as reflected in the Commission proposal) could differ from those of the law adopted by the legislature, which in turn could be affected by implementation and enforcement choices made by the EU Member States when they transpose the EU law into national law.

Scholars have suggested that effectiveness can be measured by examining compliance with quality standards, given that high quality assessments should lead to better laws and improved outcomes. Applying this metric to Commission impact assessments shows that 60 percent are considered by the Regulatory Scrutiny Board to comply with the Better Regulation Guidelines and meet quality standards. Most of the remaining 40 percent are improved before Commission decisions are taken on the corresponding proposals. These figures, combined with scoreboard analyses in the past, point to, but do not fully capture, effectiveness.

To probe more deeply whether Better Regulation had indeed led to better results, I looked at three cases—EU air quality, climate change, and roaming legislation—that have gone from impact assessment to adoption, implementation, evaluation, and amendment over the past decade.

With one exception in the roaming case, impact assessments met quality standards and facilitated discussions in the legislature. Evaluation played an important role in air quality and climate change decisions, with extensive consultation and stakeholder participation contributing to policy development.

Although the roaming regulation and its amendments were subject to systematic impact assessment and review, the 2013 impact assessment did not pass initial quality scrutiny and there were shortcomings in consultation. The amended regulation adopted by the legislature in 2015 departed significantly from the Commission’s 2013 proposal, reflecting in part, a rushed policy development process and short cuts in applying Better Regulation tools.

Available analysis suggests that the achievement of goals in the climate change and roaming cases was directly related to EU legislation, which in turn was influenced by the preparatory work and consultation.

More rigorous scholarly work is needed to see if these cases are representative of the Better Regulation effort more generally.

The evaluation of the Better Regulation system would benefit from a monitoring and review framework. This would complete the Better Regulation architecture, strengthen the credibility of the system, and provide evidence about performance to Commissioners. It would help to keep the process on track, so that it remains a support to decision-making—not an end in itself—and supports the Commission in deciding on future regulatory policy orientations. This is important because, although Better Regulation is now anchored in the Commission’s policymaking process, it is set in internal procedures rather than in administrative law. As a result, strong political and top-level administrative commitment is needed to sustain the effort. Evidence on performance would help to bolster this commitment.

That said, the Commission’s efforts to improve and consolidate the Better Regulation system will not serve to quell complaints about EU regulatory creep and the costs of EU legislation. The drive for Better Regulation was and will remain political. It embodies a debate about what kind of European Union citizens want. Some want less regulation coming from Brussels; some want more. Those wanting less often engage in “Brussels bashing,” creating myths of regulatory excess and burdensome costs which are reported in the popular press and taken up by Member States in calling for the EU to regulate better.

The Better Regulation tools and the REFIT program equip the Commission to counter these myths and respond to cost concerns. In today’s polarized political arena, where EU laws, and indeed the EU itself, are being questioned, there is even more need for this evidence-based approach. That is why, looking to the next European Commission, it will be important to keep Better Regulation as a high priority and to continue to critically assess and improve on efforts to regulate better. Not least, it will be important to highlight the benefits of EU action more systematically as they have too often been overshadowed by costs and poorly communicated in the past.

Elizabeth Golberg

Elizabeth Golberg recently retired from her position as Director of Smart Regulation with the European Commission and is currently a Senior Fellow at the Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government.