5. Revision of the regulatory stock in Brazil
This section reviews the regulatory framework surrounding the revision of the regulatory stock and the implementation of practices in Brazil at federal level. The revision of the regulatory stock is divided in two branches; the administrative simplification policy and the ex post evaluation of regulations. First, this chapter presents the regulatory framework associated with administrative simplification and ex post evaluation; then a summary of the practices in Brazil is given. Finally, a summary of relevant international practices and an extract of the OECD principles associated to the revision of the regulatory stock are presented.
In recent years, Brazil has updated its regulatory framework for the purpose of achieving objectives on administrative simplification, digitisation and the review of the regulatory stock through ex post evaluation. The section will present a summary of the regulatory framework in Brazil supporting the national simplification policy. To see a quantitative assessment of the measures taken by Brazil to tackle administrative burdens on start-ups and of the simplification and evaluation of regulation activities, please refer to Chapter 1.
Economic Freedom Act
The Economic Freedom Act (Act No. 13.874/2019), published in September 2019, protects the economic activity in Brazil and defines the role of the State as a regulatory agent. This law constitutes the foundation for the regulatory policy in the country, including the administrative simplification strategy and the ex ante assessment of regulations. Article 5 of the law introduces the obligation to perform a regulatory impact assessment (RIA) for potential reforms and regulatory proposals drafted by ministries and agencies of the federal public administration. Act No. 13.874/2019 also indicates that its bylaw will describe the methodology and requirements to implement RIA. This bylaw, published by Decree No. 10.411 in June 2020, regulates the implementation of RIA in Brazil. Furthermore, Article 13 establishes that all public entities will implement an evaluation of regulatory outcomes (ARR) in order to verify the effects of regulations in place, taking into account the objectives originally defined, as well as any other impact observed in markets and society. The scope of the ARR includes all entities in the federal public administration and autonomous bodies with authority to draft normative acts subject to RIA.
The Act (Article 3) also establishes the rights to economic freedom and requests that the federal government classify and publish low risk economic activities. This classification should be used when sub-national governments do not have specific regulation with the classification of risks associated to economic activities. Similarly, the law also establishes that in the event that the Federal Government has not yet published the classification of risks, sub-national governments instead must apply the resolution of the Committee of the National Network for the Simplification of the Registration and Legalisation of Companies and Businesses (Redesim).
Article 10 of the Economic Freedom Act also amends Act No. 12.682 of July 2012, enabling the storage and use of electronic means to manage public and private documents when citizens or companies interact with public entities. According to the reform, electronic documents will have the same effects and legal validity as paper documents. Consequently, the Secretariat of Digital Government in the Special Secretariat for De-bureaucratisation, Management and Digital Government (SDDG) should draw up the documents which require a verifiable code for reproduction.
The Economic Freedom Act also amends Act No. 8.934 of 1994. The Act states that the National Department for the Registry and Integration of Companies from the SDDG will constitute an archive that collects information from state registries. Moreover, the National Network for the Simplification of the Registry and Legalisation of Companies and Businesses (Redesim) will inform public entities regarding the registration of acts, their modifications and revocations.
The National Network for the Simplification of the Registry and Legalisation of Companies and Businesses
Act No. 11.598 of November 2007 established guidelines and procedures for the simplification and integration of the registry and legalisation of business persons and legal entities. Similarly, it created the National Network for the Simplification of the Registry and Legalisation of Firms and Businesses (Redesim). The law established the rules for participation in the network, responsibilities and general operating guidelines or principles.
Redesim is a network with the aim of proposing actions to integrate the business creation registry and its process, as well as the legalisation of companies and legal entities. According to the law, the purpose of Redesim is to co-ordinate efforts among different levels of government, avoiding overlaps and duplications in the information and documents required by public entities. The law setting up Redesim indicates that a Management Committee will run the network and the President will be a representative from the Ministry of Economy.
Act No. 11.598 is still in force but some amendments have been made since its publication in 2007. Act No. 14.195 of August 2021 changed some elements in the Redesim law. It focuses on facilities for starting a business, protection for minority shareholders and facilities for foreign trade. For example:
It requests a regulation detailing the configuration, structure and operation of the Management Committee.
It incorporates food, handcraft products and civil construction into the network.
The law indicates that all public entities involved in the process of registering and legalising companies will provide a form (in paper or digital format) with information on the companies and details of their processes in the registration.
The ability of the committee to develop initiatives within the union, the federal district, states and municipalities to improve the business environment.
The involvement of the committee on the classification of risks in economic activities.
In order to promote efficiency in the licensing process, in December 2019, Brazil published Decree No. 10.178, which established criteria and procedures by which public entities and bodies in the federal public administration, as well as autonomous and foundational bodies will classify the level of risks associated with economic activities and periods to approve public actions. This decree is complementary to Act No. 11.598 in in that Article 19 provides a framework when a public entity does not have a risk classification. In particular, this law indicates that such an entity can use the risk classification made by the Redesim Committee.
Digitisation of the Public Services Programme
Digitisation of the Public Services Programme (DSP) is an initiative taken by the federal government of Brazil to reduce administrative burdens by using digital resources. One of the highpoints of this programme was the publication of Act No. 12.682 in June 2012, regarding the Electromagnetic Preparation and Storage of Documents. This law regulates digitisation, electronic storage, as well as the reproduction of public and private documents. A key element of the law is that requires an index system to be used for the public and private entities involved in the storage of electronic documents, allowing their precise location and subsequent verification. This law allows digital interaction among public institutions, citizens and companies, ensuring that use of public and private electronic documents is absolutely legal. In particular, this law provides the basic elements for Brazil to develop a digital environment.
Afterwards, the Economic Freedom Act of 2019 updated some of the most relevant articles in Act No. 12.682/2012 to ensure that digital documents are legal. In particular, Article 10 of the Economic Freedom Act refers to the use of digital documents in communications with public bodies. A relevant step is that digital documents and their reproduction have the same validity as printed documents if the former complies with the authenticity and integrity verification mechanisms in accordance with the law.
Strategies reducing administrative burdens in Brazil
National Network for the Simplification of the Registry and Legalisation of Firms and Businesses
Redesim is the Brazilian national strategy to standardise procedures to set up businesses and track their legal constitution. General information and statistics on the programme’s performance can be found on its official website (Government of Brazil, n.d.[1]) (see Box 5.1 with a summary of statistics provided by the programme). Redesim is the one of the most important initiatives of the Brazilian government to improve regulations and simplify business creation as it involves federal and sub-national governments. In practice, Redesim co-ordinates federal and sub-national institutions simplifying all the formalities involved in opening a business, identifying and promoting an efficient pathway.
Average time to open a business in Brazil
Redesim publishes on its official website the average time to set up companies and legal entities in Brazil and its states. Similarly, the website publishes the number of requests to start businesses. Since 2019, this information has been provided by the federal entity on a monthly basis. Table 5.1 provides the statistics as for December 2021. As noticed, Sergipe is the state with the least time with 23 hours, followed by Espírito Santo with 1 day and 2 hours. In contrast, the poorest performers are Bahia with 4 days and 22 hours and Amapá with 3 days and 6 hours.
As observed in Table 5.2, in December 2021, the average time to set up a company in Brazil was 2 days and 4 hours. This outcome is the effect of work conducted by the National Department of Business Registry and Integration over the years. Table 5.2 shows a snapshot of the progress that Brazil has made to reduce the time it takes to set up a business. Since January 2019, Brazil has cut by 3 days and 9 hours the time taken to register a company.
In this context, co-ordinating national and sub-national authorities is the starting point, as Redesim is a network of local and federal institutions. Involvement of national institutions is compulsory and, as mentioned before, it is ruled by the Redesim law (Act No. 11.598/2007). In contrast, participation of sub-national governments and local institutions is voluntary, but formalisation is through an agreement (participation of local entities depends on whether their attributions are in line with the objectives of Redesim). (Government of Brazil, n.d.[2])
Once a sub-national government joins the network, Redesim encourages participating institutions to publish a form, free of charge with all the information, guidelines and instruments related to the process for registering and setting up a company. So that the licencing and registration process is clear and certain, the form should be available in both paper and digital formats.
On the other hand, in standardising and simplifying the process to start businesses, the Redesim Management Committee encourages the classification of low risk activities. Moreover, the law facilitates low-risk activities. In addition, for medium levels of risk, according to the law, licences will be issued automatically, and without human intervention. Similarly, health and safety, environmental control and fire prevention must be simplified, rationalised and standardised by entities and agencies integrating Redesim, and in accordance with their own competencies. The Redesim law also indicates that any relevant inspection required to issue licences and permits could be conducted after the business has started. The only exemption to this provision is when federal law requires prior consent from the tax authority for specific activities.
The Ministry of Economy is the entity in charge of Redesim, in particular, the National Department of Business Registry and Integration in the Secretariat of Digital Government (SGD). The National Department is the advocate and oversight body of Redesim, however, powers to promote and incentivise sub-national governments to join the programme may be limited.
The review learned from some sub-national governments that financial constraints can limit their participation in Redesim. This is because sub-national administrations have to bear the costs as national resources are not available.
Moreover, SEAE has declared that Redesim does not have specific goals to track progress of the programme due to challenges in the implementation of the project at sub-national level. It is a fact that federalism increases challenges to promote public policies, as sub-national governments are autonomous.
In summary, the Redesim law provides guidelines to facilitate licensing, the registration, modification and closure of companies by devising standards to simplify the business environment. These objectives are appropriate and have provided significant gains, but there is a need to integrate this strategy into a whole-of-government policy on better regulation, in which the definition of specific goals for the short, medium and long term will be paramount.
Digitisation of the public services programme
Digitalisation of Public Services (DSP) is an initiative of the Federal Government to evolve public services Digitisation of Public Services (DSP) is an initiative by the Federal Government to develop public services using digital means. DSP is part of the 2020-2022 Digital Government Strategy launched by Decree No. 10.332 of 2020. The Special Secretariat for De-bureaucratisation, Management and Digital Government (SDDG) is in charge of the programme. It is an administrative unit in the Ministry of Economy that conducts the efforts to digitalise public services. Similarly, SDDG measures the reduction of administrative burdens derived from the implementation of digital solutions.
The DSP initiative combines contact points in government agencies into one single website, enabling citizens to communicate with all public entities at federal level by means of a single access point: https://www.gov.br (Government of Brazil, n.d.[2]). In 2021, the Government of Brazil indicated that there were 88 million users registered on the website. In comparison, in January 2019, there were 1.7 million users. This growth shows the success of the DSP program and the benefits perceived by citizens.
Currently, the Government of Brazil provides 4,137 public services from 193 public entities. According to SEAE, in 2021, the DSP programme completed the digitisation of 2,670 of such services (64.5%) and the partial digitisation of 640 (15.5%). The latter still have some steps or elements that have to be done in person, such as submitting documents. It implies that 827 (20%) public services are not yet digitised (these processes can be started on the web page to check information and requirements but they need a physical presence in public offices). The government goal is to completely digitise public services at federal level by 2022.
According to SEAE, digitisation of public services accounts for BRL 2,000 million in savings per year by eliminating administrative tasks; out of this, BRL 1,500 million are savings for citizens and BRL 500 million for the government. Benefits for the citizens and the government are appreciated; however, the review team could not identify evidence of the systematic use of simplification measures before the digitisation of public services.
Simplification in the provision of public services as part of a digitisation strategy can lead to greater savings for citizens and businesses. The elimination of data requirements, the re-engineering of the process, the elimination of steps in the front and back offices, the application of the proportionality principle, the use of citizen language, and an analysis of the improvement in groups of services and formalities from a life event approach1 (OECD, 2020[3]), are actions on administrative simplification that can further add to the reduction of burdens for citizens and businesses, in addition to digitisation.
The fact that the review team could not find any evidence of the application of simplification measures before digitisation, does not imply that some entities did not follow this path. However, this gap certainly shows the need to have an articulated whole-of-government strategy on better regulation that brings together all relevant initiatives, with the objective to ensure the systematic application of horizontal criteria for the pursuit of regulatory quality.
Path to the Top 50 Most Competitive Countries Strategy
In 2019, President Jair Bolsonaro undertook to work within a strategy to increase Brazil’s competitiveness significantly. The strategy encompasses several initiatives to modernise the business environment and attract foreign direct investment as a means of rebuilding the economy after the health crisis. One of the elements that triggered this strategy was the performance of Brazil in the Doing Business Report by the World Bank. As a result, Brazil started to work on policy interventions, including several reforms to regulations that were identified as onerous (see Box 5.2). These initiatives have brought benefits for citizens, including time and money savings in the opening and operation of businesses.
Brazil undertook several initiatives to improve the business environment. Reforms focused on the opening and operation of business activities, aiming at reducing bureaucracy and eliminating barriers to business. Some of the achievements attained so far include:
Integrating the three levels of government for tax registration. With this measure, a business can start operations in one day, in comparison to the previous situation which took anything from 3 to 10 days (depending on sub-national governments)
Eliminating the companies’ address analysis. It was a compulsory formality for Brazilian companies, now it is a provisional measure conducted by the company.
Automating the business naming procedure. Now, the company can check the viability of the intended name by consulting the Internet.
Implementing a nation-wide medium risk classification for companies to improve registration. Now, states and municipalities without their own classification can use the national criteria to grant licences automatically.
Providing legal certainty in contracts establishing prescriptive deadlines. Previously, complex prescriptive deadlines generated uncertainty and opportunistic situations.
Speed up electricity connections for low complexity projects. Previously, there was no deadline for electricity connections. Now, there is a provisional measure, in which the silent-is-consent rule applies after five days.
Speed up electricity connections for new companies. In the past, medium-sized companies waited about 123 days in Rio de Janeiro and 132 days in Sao Paulo for an electricity connection. Now, a company should be connected within 45 to 60 days.
Reforms of import licensing. According to the new system, the requirement for imports is reduced and, for some products, this document is no longer necessary.
Strengthen the foreign trade one-stop-shop. Previously, there were entities participating on the website but which carried out formalities in person. Now the transactions are digitised.
These initiatives are a subset from 20 key policy interventions intended to improve the competitiveness of Brazil and follow international standards.
Source: Government of Brazil. Path to the Top 50 Most Competitive Countries: the Provisional Measure Of Business Environment.
Presidential Decree No. 10.139
Decree No. 10.139 provides guidance for the review and consolidation of normative acts lower than decrees issued by entities of the direct and autonomous federal public administration. For the current stock of regulations, acts under the scope of this decree include ordinances, resolutions, normative instructions, letters, notices, normative guidelines, guidelines, recommendations, and approval orders, among others. For future regulations, normative acts will be classified as ordinances, resolutions or normative instructions. These “efforts to take stock of the complexity of current regulations have led to a review of over 45,700 pieces of legislation, of which 22,500 were revoked by September 2021”2.
Decree No. 10.139 does not apply to normative acts recipients of which (natural persons or legal entities) can be identified by name or recommendations or directives whose non-compliance does not imply legal consequences (real or potential) for recipients.
Use of administrative simplification tools
Public entities in Brazil take advantage of several administrative simplification tools in order to make administrative formalities less onerous. The Ministry of Economy is the main promoter of these tools and several institutions follow regulatory practices with different levels of implementation, however, there is no evidence of an integrated administrative simplification policy following a whole-of-government approach. Simplification tools include:
In March 2018, Brazil published Decree No. 9.319 containing the Brazilian Strategy for Digital Transformation (Government of Brazil, 2008[4]). The strategy, its themes and the governance structure, make up the National System for Digital Transformation (SinDigital). The objective of e-Digital is to take advantage of digital technologies to promote sustainable and inclusive economic and social development. One of its main objectives is digital transformation, making the federal government more accessible to the population and more efficient in providing services to citizens (see Box 5.3Box 5.3). The DSP strategy presented above is incorporated into this objective.
The National System for Digital Transformation (SinDigital) is devised by the Brazilian Strategy for Digital Transformation ( E-Digital ), its thematic branches and its governance structure. SinDigital is co-ordinated by the Casa Civil of the Presidency of the Republic and comprises the following bodies:
The Inter-ministerial Committee for Digital Transformation (CIT-Digital), composed of representatives from the Federal Government.
The Advisory Board for Digital Transformation, composed of experts and representatives from the scientific community, civil society and the private sector
Other bodies and entities linked to digital transformation policies.
e-Digital is structured into the following elements:
Enabling elements:
Infrastructure and access to information and communication technologies: it aims to promote the expansion of the population's access to the internet and digital technologies.
Research, development and innovation: it aims at stimulating the development of new technologies, as well as scientific and technological production.
Trust in the digital environment: it aims at ensuring that the digital environment is safe, reliable, conducive to services and consumption and respects citizen’s rights
Education and professional training: it aims at transforming society for the digital world, new technologies and prepare it for the work of the future.
International dimension: aims at strengthening Brazilian leadership in global forums related to digital issues, stimulate competitiveness of Brazilian companies overseas, and promote regional integration in the digital economy.
Digital transformation elements:
Digital transformation of the economy: it aims at stimulating computerisation, the dynamism, productivity and competitiveness of the Brazilian economy.
Digital transformation: making the federal government more accessible to the population and more efficient in providing services to citizens.
Source: Government of Brazil (2008[4]), Estratégia Brasileira para a Transformação Digital. E-Digital, https://www.gov.br/mcti/pt-br/acompanhe-o-mcti/transformacaodigital/ArquivosEstrategiaDigital/estrategiadigital.pdf (accessed on 31 January 2022)
In December 2020, Brazil published The Guia de Desregulamentação: “Cutting Red Tape”, which is a guideline with concepts, description of principles, and policy practices on simplification and deregulation. It presents a series of concepts covering barriers to business, as well as insights on deregulation, including simplification. Like e-Digital, this document is a policy document demonstrating the interest of the Brazilian Government in simplifying formalities. While this guide is a positive development, the review team could not find evidence that other simplification initiatives took advantage of it, in order to boost their results, such as in the case of Redesim and the digitisation of formalities.
The Brazilian government promotes other simplification tools and practices, which are relevant in reducing the administrative burdens for citizens and companies. The website www.gov.br collects most of the stock of formalities at federal level and several elements of the life event methodology are there, such as the use of a citizen language and the organisation of formalities into sensible categories.
The adoption of simplification practices varies from one public entity to another. However, individual evidence suggests that regulatory agencies are among the most advanced institutions in the adoption of such practices. An example of this is the work by the Agência Nacional de Vigilância Sanitária (ANVISA), the National Health Surveillance Agency. In 2018, ANVISA launched the Guia para a mensuração da carga administrativa da regulamentação em Vigilância Sanitária (ANVISA, 2019[5]). This document constitutes a guideline to measure administrative burdens from regulation. This guide supported a pilot programme to tackle administrative burdens, which led to appropriate savings for companies selling products subject to the administrative resolution of the Collegiate Board of Directors (RDC) No. 185 of October 2006 (see Box 5.4). The first exercise to measure the administrative burdens led to the administrative simplification by BRL 750 000 per year. The methodology employed by ANVISA to measure the administrative burdens was the Standard Cost Model.
Agência Nacional de Vigilância Sanitária (ANVISA)
In 2018, ANVISA published the Exercise to measure the administrative burden of RDC No. 185/2006: a pilot study. The Directorate of Economic Studies and Regulatory Intelligence of ANVISA conducted the study and its objective was to measure the burdens created by the administrative resolution of the Collegiate Board of Directors (RDC) No. 185, of 13 October 2006. This rule regulates the economic information (such as prices) sent to ANVISA by registered companies marketing specific health products; for instance, devices used in cardiovascular procedures, clinical analysis, orthopaedics, replacement kidney therapy, among others.
The methodology used to measure administrative burdens was the Standard Cost Model (SCM), which calls for direct interviews with companies within the scope of the regulation. Those firms selected for interviews met the following criteria:
Five companies participated voluntarily after a letter was sent to different business associations.
One company selected by convenience due to the large number of reports sent to ANVISA between 2014 and 2017. The reports issued by this company accounted for 14% of the total number.
Three companies selected randomly according to their size, following the classification published by the Brazilian Micro and Small Enterprises' Support Service (Sebrae).
In this exercise, the implementation of the SCM took advantage of the 11 standard activities that a company undertakes to meet information obligations. Furthermore, an additional analysis of the pilot study was on the relationship of the results with the size of the establishments (according to the number of employees published by Sebrae in 2013). Finally, the study conducted some statistical tests in order to verify whether the sample data had a normal distribution (Shapiro-Wilk test) and the presence of outliers (Grubbs test).
The sample included 13% of the country’s companies from 2014 to 2017. According to the tests, the sample used a normal distribution without the presence of outliers. A summary of the results is presented in Table 5.3. According to the report, the administrative burdens of RDC No. 185/2006 may have been influenced by the heterogeneity of the sample that included very different companies in terms of size, quantity of products subject to the regulation and participation in international markets, although the Grubb tests did not suggest the presence of outliers.
In another initiative, in 2017, the Securities Commission (Comissão de Valores Mobiliários, CVM) launched a project to reduce administrative burdens with a focus on:
Increasing regulatory efficiency while considering potential risks to investors.
Increasing economic welfare, boosted by competition in the marketplace.
The project had two phases. The first one, Redundancy Elimination Pilot Project, focused on assessing low complexity regulatory reforms in order to solve redundancies and overlaps. CVM invited 24 institutions to collaborate, including self-regulatory industry associations, the B3 Exchange, the National Development Bank (BNDES), Moody’s rating agency, CFA, among others. As a result, 16 instruments were reformed and five were revoked. In December 2018, this phase ended.
The second phase, Project Portfolio and Prioritisation of Actions, took advantage of the information collected in the first phase and covered elements that did not meet the eligibility criteria set in the first phase. By 2019, the project drafted a regulatory agenda and opened digital communication channels with market participants and the public, in order to receive suggestions aimed to reduce the cost of regulatory compliance.
Another achievement of CVM on administrative simplification was the application of Presidential Decree No. 10.139 published in November 2019. It stated the obligation to review and consolidate normative acts lower than a decree. CVM performed a major revision and consolidation its regulations including:
As a result, in 2020, the CVM revoked 210 regulatory instruments, including 60 Instructions (Instruções), 87 Board of Commissioners Decisions (Deliberações) and 63 Guidelines (Notas Explicativas).
The initiatives by ANVISA and CVM are in the right direction and could be adopted more systematically by Brazil. However, it is clear that these activities could be resource-intensive or difficult to scale-up. In the short term, Brazil could tap into the knowledge and experiences of citizens, businesses, and stakeholders to identify those regulations or procedures that could be streamlined, simplified, or eliminated. Box 5.5 showcases the experience of the European Union, which engages actively with stakeholders to reduce administrative burdens.
For over a decade, the European Commission has taken steps to reduce red tape and cut unnecessary regulatory costs. The Regulatory Fitness and Performance Programme (REFIT) was introduced in 2015 and focused on cutting red tape and simplifying existing regulations. The Commission developed a scoreboard to monitor the progress of the proposals for simplification across 18 policy areas. Over the four years of the programme, it yielded cost savings in areas such as energy and financial matters, the digital sector, and tax burden for SMEs.
The Fit for Future Platform (F4F) builds on the experience of the REFIT Programme and, as its predecessor; it aims at simplifying the EU legislation and reducing administrative burdens. The Platform publishes an annual programme of work with the list of topics to address during the next year. For each topic, the Platform collects evidence, feedback, and information on how EU laws could be simplified without undermining their performance.
The Platform is composed of two groups, the Government group, which sits representatives from the national, regional, and local authorities of all member states; and the Stakeholder group. The latter includes experts on better regulation—both from the private sector and from civil society. Citizens and business representatives can propose ideas for streamlining and improving procedures, potential for digitalisation, overlaps with other regulations, among others.
Source: (European Commission, 2020[7]); (European Commission, 2022[8])
Ex post evaluation of regulations
The 2012 OECD Recommendation on Regulatory Policy and Governance invites countries to “conduct systematic programme reviews of the stock of significant regulations 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”. Furthermore, the OECD Best Practice Principles on Reviewing the Regulatory Stock (OECD, 2020[9]), builds upon the 2012 Recommendation (OECD, 2012[10]) and helps elucidate key aspects of ex post evaluation (see Box 5.6).
The all-embracing principles for ex post evaluations are that:
Regulatory policy frameworks should explicitly incorporate ex post reviews as an integral and permanent part of the regulatory cycle.
A sound system for the ex post review of regulation would ensure comprehensive coverage of the regulatory stock over time, while “quality controlling” key reviews and monitoring the operations of the system as a whole.
Reviews should include an evidence-based assessment of the actual outcomes from regulations against their rationales and objectives, note any lessons and make recommendations to address any performance deficiencies.
Specific principles relate to the following:
Broad approaches to reviews: programmed reviews; ad hoc reviews; and ongoing stock management.
Key questions to be answered in reviews: appropriateness; effectiveness; efficiency; and alternatives.
Source: OECD (2020[9]), Reviewing the Stock of Regulation, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://dx.doi.org/10.1787/1a8f33bc-en.
The implementation of the ex post evaluation of regulations differs from one member country to another at the OECD (see Figure 5.1 and Figure 5.2). The requirement to review laws and regulations has been formalised by some OECD members by using review or sunset clauses (both are important to ensure that the flow of regulations is under the scope of some sort of review and to determine that they remain appropriate over time). However, only one-quarter of OECD members have systematic requirements in place to conduct ex post evaluations, and for a number of countries ex post evaluations are close to a new area of regulatory management (OECD, 2021[11]). Relevant examples in ensuring the ex post assessment of regulation can be seen in the Box 5.7.
Note: Data for 2014 is based on the 34 countries that were OECD members in 2014 and the European Union. Data for 2017 and 2021 includes Colombia, Costa Rica, Latvia and Lithuania. The more regulatory practices as advocated in the 2012 Recommendation a country has implemented, the higher its iREG score.
Source: Indicators of Regulatory Policy and Governance Surveys 2014, 2017 and 2021.
Notes: Data for 2014 is based on the 34 countries that were OECD members in 2014 and the European Union. Data for 2017 and 2021 includes Colombia, Costa Rica, Latvia and Lithuania. The more regulatory practices as advocated in the 2012 Recommendation a country has implemented, the higher its iREG score.
Source: Indicators of Regulatory Policy and Governance Surveys 2014, 2017 and 2021.
New Zealand
In New Zealand, the Public Service Act stipulates five public service principles. One of them is “stewardship”, which explicitly includes within its scope the stewardship of all legislation administered within the public service. This “regulatory stewardship” responsibility views regulation (regulatory systems) as a set of national assets that require proactive monitoring, care and maintenance to deliver effectively over time.
Good regulatory stewardship practice includes:
Monitoring the performance and the state of the regulatory systems and of the regulatory environment, assessing the regulatory system and evaluating whether it is suitable for the regulatory objective and reporting on regulatory systems.
Systematic assessment of risks and effects of the regulations prior to any changes and enabling interested parties to contribute to the design of regulations.
European Commission
The European Commission’s “evaluate first” principle is a key aspect of its regulatory framework. The “evaluate first” principle calls for the review of regulations before any new proposal is made in an area concerned by the foreseen regulation and that timely and relevant recommendations are given to regulators to support their decision-making. In addition, the evaluation of regulations aids the decision-making process by contributing to the design of future policies.
Source: OECD (2021[11]), OECD Regulatory Policy Outlook 2021, https://www.oecd-ilibrary.org/sites/38b0fdb1-en/index.html?itemId=/content/publication/38b0fdb1-en.
In 2020, around 60% of OECD members provided guidance on conducting ex post evaluations to the teams carrying out the assessment. Moreover, the Regulatory Policy Outlook 2021 underscores the importance of having methodologies in place to ensure that observed the effects on the regulations can be assessed against those originally planned. Similarly, the document highlights the relevance of the data collection processes for the purposes of monitoring and evaluation. In particular, Australia has introduced post-implementation reviews (PIR) as one of its tools to evaluate the effectiveness, validity and relevance of existing regulations (Box 5.8). These reviews follow an approach similar to that of the country’s ex ante assessments, where guiding questions provide a framework for the analysis of the contents of the regulation.
Post-implementation Reviews
Australia’s Post-implementation Reviews (PIR) aim at assessing the effectiveness, validity, and relevance of an existing regulation. The results of the assessment should inform decision-making as to whether keep, modify, or eliminate a regulatory disposition. It is important to point out, that regulators need to follow a holistic approach to rulemaking. This means that agencies and government institutions should consider the data and information that they will need to carry out the PIR, even before they implement the regulation. Please refer to Table 5.4 for a list of the regulations that are subject to a PIR:
Just as Regulatory Impact Statements, regulators must answer a set of pre-defined questions when they submit their PIR to the OBPR. The scope and length of the answers to each one of the points below depend on the regulation and its impacts. The questions that should be included in the PIR include:
Source: (OBPR, 2020[12])
In Brazil in 2018, the Casa Civil of the Presidency of the Republic published the Practical Guide to Ex Post Evaluation. This document followed the guidelines established in Decree No. 9,203/2017, which provided for the governance policy of the federal administration, and in particular “monitoring the performance and evaluating the design, implementation and results of policies and priority actions to ensure that strategic guidelines are observed” (Casa Civil da Presidência da República, 2018[13]). The document provides directions on:
The role of the assessment of public policies within the federal government
Design, implementation, governance, outcome and impact evaluations
The guidelines offered a general framework on policy assessments and by 2020, Brazil advanced a step forward in the ex post evaluation of regulations publishing Decree No. 10.411/2020. This decree indicates that all public entities under the scope of the federal government will conduct an evaluation of regulatory outcomes (ARR) to assess the original objectives of regulations and other effects observed.
Instruments subject to an ex post evaluation include, but is not limited to, those regulations:
Implementation of Decree No. 10.411/2020 will start in 2022. The decree indicates that, during the first year of each presidential mandate, all public entities within the scope of the federal administration will select and publish on their respective websites at least one regulation that will integrate the ARR agenda. The regulation proposed in the agenda must be of interest to economic agents or users of services provided by the entity. Finally, the institutions must publish the assessment before the end of each presidential term. For the current administration, the agenda will be integrated by 14th October 2022 and the assessment must be carried out by 31 December 2022.
To support the adoption of the evaluation of regulatory outcomes, in 2022, Brazil published the Guidelines for the Preparation of Evaluation of Regulatory Outcomes (Guia Orientativo para Elaboração de Avaliação de Resultado Regulatório-ARR). The development of the document benefited from contributions from stakeholders, as it was subject to public consultation for 45 days on the portal Participa + Brasil. The Guidelines provide an overview of key elements such as monitoring, planning of ARR, the ARR report. Furthermore, the document briefly describes appropriate actions that ministries and entities can implement to help incorporate the ARR in the rule-making process (Ministério da Economia, 2022[14]).
The adoption of ex post assessments of regulations is at an early stage in Brazil. For this reason, the implementation throughout entities is not standardised. Individual evidence suggests that some regulators are among the most advanced entities in the implementation of this practice. For example, within the scope of ANVISA, Ordinance No. 162/2021 establishes the rules for the application of ARR, according to the provisions of Decree No. 10.411/2020. Moreover, at the end of 2020, in order to structure and implement the Impact Evaluation and Monitoring of Regulation (M&ARR) process, ANVISA published the Guidelines for the implementation of Monitoring and Evaluation of the Regulatory Result (M&ARR) (ANVISA, 2020[6]). These guidelines provide a general framework for ARR within ANVISA, Brazil and other countries. Furthermore, it offers concepts and useful information for ARR implementation as part of the regulatory policy cycle. Taking advantage of this document, ANVISA drafted a series of support material for carrying out the M&ARR. For instance, 10 Guideline Notes adapted as modules for a virtual course on M&ARR were developed (ANVISA, 2020[6]).
A second element in the assessment of Brazilian regulations is the establishment of the Council for Monitoring and Evaluation of Public Policies (CMAP). CMAP is a collegiate body comprised of the Ministry of Economy, Casa Civil of the Presidency and the Office of the Comptroller General (CGU). CMAP is in charge of selecting a list of public policies subject to evaluation, according to specific criteria. The scope of the CMAP includes public policies financed by public spending and subsidies. The work of CMAP is important for ex post evaluation practices, as it constitutes a relevant experience for the assessment of broader public policy instruments (as regulations).
References
[6] ANVISA (2020), Monitoramento e Avaliação de Resultado Regulatório (M&ARR) Diretrizes para a implementação de M&ARR na Anvisa, ANVISA, https://www.gov.br/anvisa/pt-br/assuntos/regulamentacao/monitoramento-e-avaliacao-de-resultado-regulatorio/diretrizes-para-implementacao-de-m-arr-na-anvisa-com-logo.pdf (accessed on 3 February 2022).
[5] ANVISA (2019), Guia para a mensuração da carga administrativa da regulamentação em Vigilância Sanitária, ANVISA, https://www.gov.br/anvisa/pt-br/assuntos/regulamentacao/carga-administrativa/arquivos/guia-para-a-mensuracao-da-carga-administrativa-em-vigilancia-sanitaria.pdf (accessed on 1 February 2022).
[13] Casa Civil da Presidência da República (2018), Avaliação de Políticas Públicas. Guia prático de análise ex post, Casa Civil, Brasilia, https://www.gov.br/casacivil/pt-br/centrais-de-conteudo/downloads/guiaexpost.pdf/view (accessed on 3 February 2022).
[8] European Commission (2022), Fit for Future Platform (F4F), https://ec.europa.eu/info/law/law-making-process/evaluating-and-improving-existing-laws/refit-making-eu-law-simpler-less-costly-and-future-proof/fit-future-platform-f4f_en (accessed on 29 April 2022).
[7] European Commission (2020), REFIT – making EU law simpler, less costly and future proof, https://ec.europa.eu/info/law/law-making-process/evaluating-and-improving-existing-laws/refit-making-eu-law-simpler-less-costly-and-future-proof_en (accessed on 29 April 2022).
[4] Government of Brazil (2008), Estratégia Brasileira para a Transformação Digital. E-Digital, https://www.gov.br/mcti/pt-br/acompanhe-o-mcti/transformacaodigital/ArquivosEstrategiaDigital/estrategiadigital.pdf (accessed on 31 January 2022).
[2] Government of Brazil (n.d.), Gov.br, https://www.gov.br/ (accessed on 27 January 2022).
[1] Government of Brazil (n.d.), Redesim, https://www.gov.br/empresas-e-negocios/pt-br/redesim (accessed on 26 January 2022).
[14] Ministério da Economia (2022), Guia Orientativo para Elaboração de Avaliação de Resultado Regulatório-ARR, https://www.gov.br/economia/pt-br/assuntos/air/guias-e-documentos/GuiaARRverso5.pdf (accessed on 16 March 2022).
[12] OBPR (2020), Post-implementation Reviews What is the purpose of a post-implementation review?, https://obpr.pmc.gov.au/published-impact-analyses-and-reports (accessed on 24 May 2022).
[11] OECD (2021), OECD Regulatory Policy Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/38b0fdb1-en.
[3] OECD (2020), One-Stop Shops for Citizens and Business, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/b0b0924e-en.
[9] OECD (2020), Reviewing the Stock of Regulation, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/1a8f33bc-en.
[10] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, OECD Publishing, Paris, https://doi.org/10.1787/9789264209022-en.
Notes
← 1. Life event is an integrated service model when providing public services. The provision of services tend be based on a single life event (e.g. “having a child”, “starting a business”, etc.), so that a single official can resolve all the transactions with the citizen or the business in a holistic manner. In this way, one-stop shops should aim to provide an end-to-end experience across various transaction channels. Common life event one-stop shops are: the creation, expansion, and closure of businesses; permitting and licensing information from multiple levels of government for one specific geographic area; births, deaths, and marriages; and purchasing property.
← 2. https://www-gov-br.translate.goog/secretariageral/pt-br/moderniza-brasil/revisao-de-atos-normativos-inferiores-a-decreto?_x_tr_sl=pt&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp, last accessed 16 March 2022.