Cutting red tape Down Under
IT SEEMS that ours is a government that is particularly fond of getting into people’s way, be it in doing business, obtaining a whole range of public services, or engaging in any kind of productive activity. One might blame government itself if our economy is unable to generate ample jobs for our workers and thereby reduce poverty here at home, given the way its various regulations only serve to stifle otherwise job-creating economic activity. Whether or not motivated by corrupt intentions, our government bureaucrats from top executives down to the lowliest employees appear to have a deeply ingrained regulatory mindset that says nothing from government should come easy. Government requirements and procedures are thus designed with a seeming sadistic bent, as if to deliberately exact the greatest pain and discomfort on the part of us citizens. Thus, all the rhetoric about us being our public servants’ “bosses” rings hollow. Hence, I concluded last week that getting rid of unnecessary government regulations must be made a deliberate and sustained effort.
Australia sets a good example on how this must be done. Its government has put all seriousness in the effort to make dealing with government easy and pleasant, and set up a Cutting Red Tape website (cuttingredtape.gov.au) as a public resource. It has even issued a “bible” (The Australian Government Guide to Regulation) for its policymakers’ guidance. This “bible” starts out with its own “ten commandments,” listed as 10 principles for policymakers, which our own government would do well to take to heart as well. Allow me to elaborate on these worthy principles:
1. Regulation should not be the default option for policymakers: the policy option offering the greatest net benefit should always be the recommended option. Since at least the 1990s, our Medium Term Philippine Development Plan had already professed that government should be an enabler, rather than a stifler, of private initiative. But it seems that the regulatory mindset that unduly permeates the Philippine bureaucracy has gotten in the way of translating this principle into actual practice.
2. Regulation should be imposed only when it can be shown to offer an overall net benefit. With the obstacle course put in the way of Filipino citizens needing a service, approval, clearance, permit or license from our government, one feels that it is actually to create opportunities for the private benefit of “public servants” that regulations are put in place.
3. The cost burden of new regulation must be fully offset by reductions in existing regulatory burden. This is the approach taken by Canada and the United Kingdom that I described last week: Canadian law requires that at least one regulation be eliminated for every new one introduced, while the United Kingdom ups the ante with a “one in, three out” policy where three regulations must go for each new one introduced.
4. Every substantive regulatory policy change must be the subject of a Regulation Impact Statement. Just as an environmental impact assessment is required of various projects, so must we subject every significant new change in regulatory policy to a careful impact analysis that fully weighs costs against benefits to society as a whole. And in accordance with principle 2, we must adopt only those that would result in overall net benefit for all.
5. Policymakers should consult in a genuine and timely way with affected businesses, community organizations and individuals. In undertaking the regulatory cost-benefit analysis above, there is no better source of data and information on the attendant costs and benefits than those directly affected by proposed regulatory policies. Hence, they must take part in the process of undertaking such assessment, rather than have policymakers “play God” and come up with the answers themselves—as is tempting for all too many so-called “experts” in government.
6. Policymakers must consult with each other to avoid creating cumulative or overlapping regulatory burdens. The problem I described last week with multiple permits and clearances required of many import shipments could have been avoided if there had been prior communication and coordination among agencies requiring them. When the left hand doesn’t know what the right hand is doing, both of them will needlessly do the same thing.
7. The information upon which policymakers base their decisions must be published at the earliest opportunity. With a Freedom of Information Act now seemingly so out of reach even in a government that started out pledging to deliver it, this condition could well be among the most difficult for our policymakers to adhere to.
8. Regulators must implement regulation with common sense, empathy and respect. One wishes that these three qualities would be inherent in our regulators. But from most indications, they are not—and we are all the losers for it.
9. All regulation must be periodically reviewed to test its continuing relevance. Regulations do outlive their usefulness. Indeed, we have too many archaic restrictions enshrined in our laws and in our Constitution, now proving to be counterproductive to inclusive growth and development.
10. Policymakers must work closely with their portfolio Deregulation Units throughout the policy-making process. Demonstrating seriousness, Australia requires in every ministry a unit headed by a senior officer tasked to ensure that regulation impact assessments satisfy all government requirements and identify viable alternative policy options.
Can we ever make our government easy and pleasant to work with? Dream on.
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