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Risk and Regulatory Policy

Improving the Governance of Risk

image of Risk and Regulatory Policy

We expect governments to protect citizens from the adverse consequences of hazardous events. At the same time it is not possible or necessarily in the best interest of citizens for all risks to be removed. A risk-based approach to the design and implementation of regulation can help to ensure that regulatory approaches are efficient, effective and account for risk/risk tradeoffs across policy objectives. Risk-based approaches to the design of regulation and compliance strategies can improve the welfare of citizens by providing better protection, more efficient government services and reduced costs for business. Across the OECD there is great potential to improve the operation of risk policy as few governments have taken steps to develop a coherent risk governance policy for managing regulation.  

This publication presents recent OECD research and analysis on risk and regulatory policy.  The chapters discuss core challenges today. They offer measures for developing, or improving, coherent risk governance policies. Topics include: challenges in designing regulatory policy frameworks to manage risks; different cultural and legal dimensions of risk regulatory concepts across OECD; analytical models and principles for decision making in uncertain situations; key elements of risk regulation and governance institutions; the use of management-based regulation to help firms make risk-related behavioural changes; an analysis of the risk-based frameworks of regulators in five OECD countries (Australia, Ireland, Netherlands, Portugal, United Kingdom) and across four sectors: environment, food safety, financial markets and health and safety; and the elements for designing formal guidelines for risk prioritisation, assessment, management and communication.

 

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Challenges to Designing Regulatory Policy Frameworks to Manage Risks

Greater emphasis on risk-based approaches to the design of regulation and compliance strategies can improve the welfare of citizens by providing better protection from hazards and more efficient services from government. Improvements to risk and regulatory policy are also consistent with the Better Regulation Agenda of most Governments and can reduce costs for business. However, across OECD only a few governments have taken steps towards developing a coherent risk policy framework for managing regulation. For the most part there is little or no central oversight or guidance to ensure that approaches being taken are efficient and effective, adequately account for risk-risk tradeoffs, and/or diffuse the lessons from individual agencies to other parts of government. This chapter argues that central guidance and a review role is necessary if progress is going to be made to improve risk governance systems right across the administration.

English

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