It has been three years since the launch of the inaugural edition of the Regulatory Policy Outlook. Since then, much progress has been made in continuing to put the world economy back on track; but a sense of malaise remains. Its causes and drivers are diffuse and not all economic in nature, but they are very much tangible. They have to do, to a certain degree, with the relentless and overwhelming pace of technological change that is transforming every facet of our lives. They are also rooted in the irremediable intricacies of our economies, connected via continuous flows that go beyond goods to affect people, services, capital, and data.

Most of the data presented in this Outlook, including the composite indicators, are the results of the 2014 and 2017 Regulatory Indicators Surveys. This Reader’s guide aims to help readers understand the scope of the data collected through these surveys and some of the limitations related to the use of indicators. Please note that this edition of the Outlook also features results of new survey questions on the institutional setup of regulatory policy and oversight. These questions serve a ‘mapping exercise’ to help illustrate the breadth and diversity of regulatory oversight across all jurisdictions covered. These questions have not been used to develop composite indicators and have a different scope than the other questions in the Regulatory Indicators Survey. Details on these survey questions are described in Chapter 3.

Laws and regulations affect all areas of business and life. They determine the contours of our safety and lifestyle, the ease of doing business and the achievement of societal and environmental goals. While good regulation is conducive to economic growth and well‑being, inadequate regulation endangers both. But “regulating” is an increasingly daunting task. The overwhelming pace of technological change and the unprecedented interconnectedness of economies confront governments with uncertainty and complexity in terms of what and how to regulate. The validity of existing regulatory frameworks and, indeed, the capacity of governments to adapt to change are being questioned. This requires an increasingly agile public sector, able to exploit the many opportunities offered by technological change to improve rule-making and adapt to new realities and risks.

Laws and regulations are essential tools in the hand of governments to promote well-being and economic growth. Over the past 30 years, governments have progressively developed the disciplines and tools of regulatory policy to ensure their quality. However, as governments have continuously improved their understanding of regulatory quality, regulating itself has become increasingly difficult. The growing pace of technological changes and the deepening of globalisation are raising substantial challenges for domestic regulators. This chapter highlights the high-level trends in regulatory policy and governance and points to some of the challenges and opportunities faced. In doing so, it lays the grounds for the following chapters of the Regulatory Policy Outlook that investigates in more depth country practices in the systematic application of selected regulatory policy approaches.

Whilst most countries have made some improvements to their regulatory management systems and practices over the last years, few have undertaken comprehensive reforms. In particular, ex post evaluation of regulations remains relatively undeveloped without consistent review methodologies. More needs to be done to ensure that OECD countries reach the agreed standards for their regulatory management practices – namely, the 2012 Recommendation of the Council on Regulatory Policy and Governance – in a timely manner. If further improvements are not forthcoming, economies will be slowed by unnecessary burdens, thereby threatening future prosperity. This chapter focuses on recent trends in three key elements of the 2012 Recommendation: the engagement with stakeholders and the use of evidence in the development and revision of regulations.

The institutional setup for regulatory policy and oversight is a key enabler of effective regulatory frameworks. Oversight mechanisms are essential to bridge the gap between the establishment of formal requirements for using regulatory management tools and their implementation in practice. While most countries have invested in regulatory oversight in line with the 2012 Recommendation of the Council on Regulatory Policy and Governance at least to some extent, institutional mandates vary widely across the OECD membership. In many countries, several bodies share oversight responsibilities and the organisation of regulatory oversight differs importantly across jurisdictions. With a view to clarify how regulatory oversight is carried out across countries, this chapter provides a descriptive overview of the institutional landscape for regulatory policy with a specific focus on regulatory oversight and quality control arrangements. It is based on a new data collection and case studies and lays the ground for further analytical work on the performance of regulatory oversight.

Ensuring effective compliance with and implementation of rules and regulations is an important factor in creating a well-functioning society and trust in government. Developing and applying regulatory delivery policies, tools and institutions that help achieve the best possible outcomes through the highest possible levels of compliance, while keeping the costs and burden as low as possible, should therefore be an important part of governments’ regulatory policies. This chapter discusses regulatory delivery, concentrating on regulatory and enforcement agencies that oversee the implementation of regulation, promote compliance and, in some cases, design secondary regulations. It proposes a way forward for the better regulation agenda to include cross-governmental considerations linked to improved delivery of regulations, better co-ordination, governance and performance of bodies involved in regulatory delivery, improved targeting of regulatory enforcement activities and improving regulatory compliance.

New opportunities and changes brought by the growing interconnectedness of economies and technologies present policy makers and regulators with challenges that cannot be dealt with in isolation. Increasingly, co-ordination is needed on regulatory matters to tackle the challenges that cross borders and achieve a coherent and effective regulatory response at least costs for business and citizens. This chapter documents and analyses the various jurisdictions’ practices in accounting for the international environment in domestic rule-making. It reviews how international considerations are reflected in traditional regulatory management tools and the interface between domestic and international rule-making. The chapter builds on answers to dedicated questions embedded in the 2017 OECD survey of Regulatory Policy and Governance, as well as to a survey carried out in 2015 to 50 international organisations.

Behavioural insights have become increasingly entrenched in governments around the world as a tool to improve the effectiveness of public policy. This chapter presents an overview of the current state of play for behavioural insights globally, based on OECD research conducted since 2013. This includes an overview of the findings of a recent survey of 60 nudge units from 23 countries and two international institutions, as well as a collection of over 100 case studies on the application of behavioural insights to policy in 11 policy sectors. It particularly focuses on the institution composition and key challenges for governments applying behavioural insights. The chapter also discusses new frontiers for the practice of behavioural insights, which includes embedding the tool throughout the regulatory policy cycle and applying behavioural insights to changing organisational behaviour.