Increasing the efficiency of state regulation of the Russian economy with the help of experiences in the EU and selected EU Member States
Wybe Th. Douma
Introduction
The purpose of this research study and policy advice is the identification of a methodology of making current Russian legislation concerning state regulation of economy and its development future oriented, predictable, certain, coherent, and non-controversial and compatible with European Union and selected EU member states (Germany, UK, Sweden, and etc.) practice in establishing "rules of the game" in this field. This work is conducted under the responsibility of the 'EU-RF relations group' of RECEP. The background of this research study and policy advice is the a request received from the Analytical Department of the Council of the Federation to provide it with an analytical report on increasing efficiency in the regulatory system of state involvement in the national economy with an extensive study of EU member states systems, notably there request with regard to the "systematization (hierarchy) and codification of legislation about the state regulation of economy." More specifically, this report aims at:
- · analyzing the EU and member countries experience in developing appropriate methodology of coherent state regulation of economy
- · make an analyses of the EU and member countries legislation and practice concerning development of state regulation of economy
- · provide an analyses of prerequisites needed to make current Russian legislation concerning state regulation of economy and its development future oriented, predictable, certain, coherent, and non-controversial
- · provide an analyses of prerequisites needed to make current Russian legislation concerning state regulation of economy compatible with European Union and its member states practice in this field and to proceed with drafting of appropriate normative acts.
- · develop or identify methodology, to be applied to legislative process, of efficient state involvement in the economy
- · elaborate suggestions concerning eventual legal instruments to be used to put such a methodology into practices.
The issue of making the regulation of the economy more efficient is receiving wide attention in the EU and in its Member States, but also in many other countries and organizations. It is recognized that an efficient system of state regulation of the economy contributes to the performance of the economy, notably by eliminating unnecessary obstacles to competition, innovation and growth. In other words: bad regulation obstructs the economy. Costs of administrative burdens on individual enterprises in the EU have been calculated at between ECU 180 and 230 billion per year, representing 3 to 4 percent of the European Union's. Such figures demonstrate that administrative hurdles ('red tape') are of a considerable influence to enterprises and economic growth.
Within the EU, the so-called Lisbon Strategy has set as a goal for the EU to become a more competitive and dynamic knowledge-based economy, capable of sustainable economic growth with more and better jobs and greater social cohesion. Similar to the goals set out by the Russian government with regard to doubling GDP by 2010, the EU needs to intensify its efforts in order to attain its goal, as became clear from the mid-term review published on 3 November 2004. Fair and uniformly applied competition and state aid rules are regarded as essential for ensuring that EU businesses can thrive and operate effectively on a level playing field in the internal market. Barriers to services are to be removed, liberalisation in areas such as gas, electricity, postal services and transport is to be speeded up. A strategy for further coordinated action to simplify the regulatory environment, including the performance of public administration, was developed at both the national and the Community level.
Outline
This paper will concentrate first of all on the EU state of affairs, and after that on some of its individual Member States. In the EU part, after an introduction, first of all the subsidiarity principle will be discussed which helps deciding at which level regulatory action is to be taken. Secondly, the role of the proportionality principle in choosing the appropriate scope and content of legislation to deal with a specific issue is discussed. After that, attention turns to improving the quality of EU legislation, notably with the help of Impact Assessments on financial and administrative consequences of regulatory initiatives. Fourthly, the involvement of stakeholders and public consultations on proposed legislation are dealt with. Fifthly and finally as far as the European level is concerned, the issue of simplification of legislation is turned to. The national part, after a general introduction, will deal first of all with the Dutch state regulatory system. In the Netherlands, attrntion focuses first of all on the so-called Directives for the regulator, than turns to the large-scale operation aimed at improving existing and proposed new initiatives. The policy goal of reducing administrative burdens with 25% by 2010 will be discussed next, as is the Dutch national impact assessment system aimed and the war on red tape, i.e. reducing administrative burdens. Attention then focuses on the Swedish impact assessment system,. The Swedish part ends with a description of the efforts on improving the abilities of companies to comply with regulation. The third country discussed is the United Kingdom. After describing the organisations involved in regulating economic life there, the UK regulatory impact assessment and legislative system are turned to. Then, improving the abilities of companies to comply with UK regulation is described. Finally, impact and visibility of the efforts on improving the regulatory system are discussed. Where possible, throughout both the European and the national parts, indications for useful elements as regards Russia's efforts to improve its regulation of the economy will be identified. The last part of this paper is devoted to possible lessons for Russia from experiences in the EU and its Member States.
Published on 23 Feb 2005
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