Publications

1. The stock of laws and regulations has grown rapidly in most countries. However not all regulations will have been rigorously assessed, and even where they have, not all effects can be known with certainty in advance. Moreover, many of the features of an economy or society of relevance to particular regulations will change over time. The OECD Recommendation on Regulatory Policy and Governance (2012) therefore calls on governments to “[c]onduct systematic programme reviews of the stock of significant regulation against clearly defined policy goals, including consideration of costs and benefits, to ensure that regulations remain up to date, cost justified, cost effective and consistent, and deliver the intended policy objectives.” 2. The OECD Regulatory Policy Outlook 2015 found that the use of evidence and analysis in the regulatory process has to date mostly involved ex ante assessments. Given that the stock of regulation is much larger than the incremental flow, there is large potential for improving the existing regulatory framework through more systematic ex post evaluations of regulations. 3. The 9th OECD Conference on Measuring Regulatory Performance was concerned with the appropriate institutions and processes to effectively implement ex post evaluation. Discussions focussed on institutionalising ex post evaluation as an integral part of the regulatory cycle, the results of which feed back into the regulatory process itself. 4. The following considerations emerged from the discussions as central to the effective implementation of ex post regulatory reviews:  Ex post reviews need to go beyond a “costing exercise” to focus on whether the regulation’s underlying policy objectives have been achieved. In addition, evaluations should take into account any side-effects of regulations and include a consideration of possibly better alternatives.  A mix of different approaches to evaluation will generally be required, depending on the context, including reviews of regulations triggered by “sunsetting” clauses and statutory requirements, and ad hoc reviews. Comprehensive in-depth reviews or programme reviews that look at the mix of regulations and policy instruments in certain policy areas or sectors can identify options for more broad-ranging reforms. Evaluations triggered by “sunsetting” clauses or automatic review requirements might also be usefully packaged if they address similar or overlapping issues. Finally, ongoing ‘management’ of regulations, e.g. through stock-flow linkage rules or red tape reduction targets, can achieve significant reductions in administrative burdens  Evaluations that are built into the regulatory regime from the outset create a coherent link between ex ante and ex post evaluation to support evidence-based policy making throughout the regulatory cycle. This approach can ensure the setting of clear objectives and enables the early identification of an appropriate methodology and data needs.  While there is no “one-size-fits-all” institutional setting for ex post evaluation, independent bodies can play a key role in conducting reviews and providing 4 │ Closing the regulatory cycle: effective ex post evaluation for improved policy outcomes oversight of evaluations. The more ‘sensitive’ the regulatory area, and the more significant its impacts, the stronger the case for an ‘arm’s length’ review process. Less critical evaluations will normally be conducted by line ministries and agencies themselves. These can also benefit from some form of independent quality control. Regulatory reviews should not be carried out in isolation but pay attention to previous evaluations prepared by other institutions, including parliament and independent bodies.  Consultation with stakeholders is crucial to make sure evaluations are targeted appropriately and can be informed by the real-world impact of regulations. Consultation with stakeholders also helps ensure recommendations for improvement are practical and user-centred. At the same time, those responsible for evaluation need to account for the diversity of knowledge, resources and level of organisation of different stakeholder groups.  Getting the timing of evaluations right can greatly increase the impact of resulting recommendations within the policy-making process. Depending on the political system, an evaluation conducted at a time when parliament plans a new legislative initiative in a related policy area may have more impact than one conducted during an election campaign when results face a greater risk of becoming politicised. Evaluations may also help inform party programmes or coalition agreements when published at the right time.  The existence of stock-flow linkage rules such as ‘one-in x-out’ can provide an incentive and discipline for keeping regulatory costs in check. To be effective, such regimes should motivate proper evaluation of existing regulations proposed for removal including assessments against their objectives and broader public policy objectives.  In order to ensure the quality of ex post evaluations, governments need to invest in the required skills and capacities within the public sector. A number of academic disciplines are potentially needed, depending on the area of regulation being reviewed, but the key skills in common relate to the identification and measurement of impacts, whether social, environmental or economic

This article provides a comprehensive overview of how policy makers, practitioners, and scholars can fruitfully use behavioral science to tackle public administration, management, and policy issues. The article systematically reviews 109 articles in the public administration discipline that are inspired by the behavioral sciences to identify emerging research trajectories, significant gaps, and promising applied research directions. In an attempt to systematize and take stock of the nascent behavioral public administration scholarship, the authors trace it back to the seminal works of three Nobel Laureates—Herbert Simon, Daniel Kahneman, and Richard Thaler—and their work on bounded rationality, cognitive biases, and nudging, respectively. The cognitive biases investigated by the studies reviewed fall into the categories of accessibility, loss aversion, and overconfidence/optimism. Nudging and choice architecture are discussed as viable strategies for leveraging these cognitive traps in an attempt to alter behavior for the better, among both citizens and public servants.

Current regulatory approaches are ill-equipped to address the challenges of governing through periods of disruptive technological change. This article hones in on the use of assessment regimes at the level of the European Union, particularly in the work of the Commission, to argue for a missing middle between technology assessment and impact assessment. Technology assessment focuses on the upstream governance of science and technology, while impact assessment focuses on the downstream governance of the impacts of specific policy options. What is missing is a form of midstream governance, which I label innovation assessment, to steer polities through periods of disruptive technological change, during which innovations have taken concrete forms and are beginning to diffuse, but still exhibit much scope for rapid, unexpected change and alternative trajectories of development. By juxtaposing these three forms of assessment regimes, I define the main dimensions along which they vary.

In recent years competent authorities in the EU have adopted various initiatives to facilitate financial innovation. These initiatives include the establishment of ‘innovation facilitators’. Innovation facilitators typically take the form of ‘innovation hubs’ and ‘regulatory sandboxes’. Innovation hubs provide a dedicated point of contact for firms to raise enquiries with competent authorities on FinTech-related issues and to seek non-binding guidance on regulatory and supervisory expectations, including licensing requirements. Regulatory sandboxes, on the other hand, are schemes to enable firms to test, pursuant to a specific testing plan agreed and monitored by a dedicated function of the competent authority, innovative financial products, financial services or business models. In this report the European Supervisory Authorities (the ESAs) set out a comparative analysis of the innovation facilitators established to date in the EU, further to the mandate specified in the European Commission’s March 2018 FinTech Action Plan.The ESAs also set out ‘best practices’ regarding the design and operation of innovation facilitators, informed by the results of the comparative analysis and the experiences of the national competent authorities in running the facilitators. The best practices are intended to provide indicative support for competent authorities when considering the establishment of, or reviewing the operation of innovation facilitators. Accordingly, the best practices are intended to promote convergence in the design and operation of innovation facilitators and thereby protect the level playing field. The ESAs also set out options, to be considered in the context of future EU-level work on innovation facilitators, including in conjunction with the European Commission’s future work, to promote coordination and cooperation between innovation facilitators and support the scaling-up of FinTech across the EU. These options comprise: • the development of Joint ESA own-initiative guidance on cooperation and coordination between innovation facilitators; • the creation of an EU network to bridge innovation facilitators established at the Member State level. The ESAs will continue to monitor national developments regarding innovation facilitators and take such steps as are appropriate to promote an accommodative and common approach towards FinTech in the EU.

Recently both the Bank of England and the Financial Conduct Authority have carried out experiments using new digital technology for regulatory purposes. The idea is to replace rules written in natural legal language with computer code and to use artificial intelligence for regulatory purposes. This new way of designing public law is in line with the government’s vision for the UK to become a global leader in digital technology. It is also reflected in the FCA’s business plan. The article reviews the technology and the advantages and disadvantages of combining the technology with regulatory law. It then informs the discussion from a broader public law perspective. It analyses regulatory technology through criteria developed in the mainstream regulatory discourse. It contributes to that discourse by anticipating problems that will arise as the technology evolves. In addition, the hope is to assist the government in avoiding mistakes that have occurred in the past and creating a better system from the start.