8. The Development of New Regulations
The legislative process in the Palestinian Authority takes place against a backdrop of a multi-faceted political and legal context. The guidelines for legislative drafting reflect international best practice, but practical implementation needs reinforcement. The absence of the Legislative Council amplifies the need for a systematic assessment of regulatory impacts ex ante. This section therefore recommends that the PA gradually introduce RIA in practice and support its implementation by putting in place effective regulatory oversight.
Laws and regulations should be always based on the best available information, data, analysis and scientific expertise and take into account all potential alternative solutions to a problem. If used systematically and as an administration-wide approach, regulatory impact assessment (RIA) provides a critical tool to ensure greater quality of the PA’s intervention. (OECD, 2020[15]) The RIA process itself is a systematic approach to weigh the benefits and costs of various regulatory and non-regulatory options for the PA to address a specific problem in society. Governments must make decisions for new laws based on a sound rationale and evidence; otherwise, regulations and policies will not be-fit-for-purpose and, in the worst case, may do more harm than good.
RIA is a fundamental part of the OECD Recommendation on Regulatory Policy and Governance [OECD/LEGAL/0390] (see Box 8.1).
1. Commitment and buy in for RIA
Governments have to enable public control of the RIA process.
2. Governance of RIA – having the right set up or system design
RIA should be fully integrated with other regulatory management tools and should be implemented in the context of the Regulatory Governance Cycle.
RIA and its implementation should be adjusted to the legal and administrative system and culture of the country.
Governments need to decide whether to implement RIA at once or gradually.
Responsibilities for RIA programme elements have to be allocated carefully.
Efficient regulatory oversight is a crucial precondition for a successful RIA.
Parliaments should be encouraged to set up their own procedures to guarantee the quality of legislation, including the quality of RIA.
3. Embedding RIA through strengthening capacity and accountability of the administration
4. Targeted and appropriate RIA methodology
The RIA methodology should be as simple and flexible as possible, while ensuring certain key features are covered.
RIA should not always be interpreted as requiring a full-fledged quantitative cost-benefit analysis of legislation.
Sound strategies on collecting and accessing data must be developed.
RIA has to be undertaken at the inception stage of policy development.
No RIA can be successful without defining the policy context and objectives, in particular the systematic identification of the problem.
All plausible alternatives, including non-regulatory solutions must be taken into account.
It is essential to always identify all relevant direct and indirect costs as well as benefits.
Public consultations must be incorporated systematically in the RIA process.
Insights from behavioural economics should be considered, as appropriate.
The development of enforcement and compliance strategies should be part of every RIA.
5. Continuous monitoring, evaluation and improvement of RIA
It is important to validate the real impacts of adopted regulations after their implementation.
RIA systems should also have an in-built monitoring, evaluation and refinement mechanism in place.
A regular, comprehensive evaluation of the impact of RIA on the (perceived) quality of regulatory decisions is essential.
It is important to evaluate the impacts in cases where the original RIA document does not coincide with the final text of the proposal.
Systematic evaluation of the performance of the regulatory oversight bodies is important.
Source: (OECD, 2020[15])
OECD Member countries have recognised the importance of regulatory impact assessment. Since 2021, all OECD Member countries have a requirement in place to conduct RIA on at least some laws, and there has also been a slight rebalancing as Members move away from a blanket requirement to a more proportionate approach. The gap between a requirement to conduct RIA and what actually happens in practice is slowly reducing. (OECD, 2021[11])
In line with international best practice, the Palestinian Authority has committed to underpin the development of its regulatory interventions on a number of good regulatory principles, including impact assessment. Those principles are spelled out in the Legislative Drafting Guidelines prepared by the Ministry of Justice with the support of the European Union Police Mission for the Palestinian Territories (EUPOL COPPS) and the OECD.
In the Palestinian Authority, primary laws are prepared under Regular procedure. In cases of necessity or when the Parliament is not in session, laws are issued by the President as decree laws in an Exceptional procedure. The two types of laws do not have the same legal value (as decree laws in theory will need approval by the Legislative Council once it is again in session), but the distinction between them is not always made. Article 43 decree laws do however have “the power of law” and also the capacity to become “proper” laws provided that the PLC approves them when back in session.
The Council of Ministers has the right (and positive obligation) to initiate primary laws, while the issuance of decree-laws is a discretionary power of the President as per the Basic Law.
The executive can issue the following instruments according to the Basic Law:
Council of Ministers issues allawayih (secondary regulations): the CoM “shall have the right […] to issue regulations” (Article 70);
Prime Minister (the ‘PM’) issues qararat (decisions) “within the Prime Minister’s competence in accordance with the law” (Article 68.6), and signs and issues lawa’h (regulations) and anthima approved by the CoM (Article 68.7);
Ministers issue ta’limat (instructions), as they are endowed with the power to “supervise the conduct of affairs in the ministry and to issue necessary instructions therefor” (Article 71.2). (EUPOL COPPS, 2017[1])
In practice, the lines between laws and decree-laws in terms of processes for their preparation and issuance have been blurred due to the lack of a guiding framework. It is largely at the government’s discretion to decide how to implement Art. 43 in practice.
Forward planning refers to the practice through which the PA develops and announces on a regular basis the regulatory initiatives it plans to launch in the forthcoming 6-12 months.
The Council of Ministers prepares mid-term as well as annual legislative plans with support from representatives from ministries’ legal units, albeit on an ad hoc basis. In 2007 and 2012, the Higher National Committee (HNC) and a Ministerial Committee on Legislative Policies (MCLP) were established in an effort to streamline the process of forward planning, however both committees are currently inactive. (EUPOL COPPS, 2017[1])
The Cabinet Decision no. (06/18/14) of 2012 on the Approval of the Recommendations of the Ministerial Committee on Legislative Policies established the mechanism for the preparation and implementation of the annual legislative plan. Ministries were tasked with preparing sectoral legislative plans in consultation with relevant stakeholders and submitting them to the General Secretariat for review. The MCLP was to assess coherence of the ministries and other bodies’ plans with overarching policy objectives and submit them to the Council of Ministers.
To date however, there is no formal, harmonised process for forward planning of rule-making activities in practice, though individual departments sometimes engage in independent legislative planning, such as the Ministry for Women’s Affairs, which prepares internal strategic and operational plans and objectives. As a result, awareness of administration-wide legislative planning activities is limited.
When administration-wide legislative plans are developed, their implementation is not consistent nor effective. The General Secretariat of the Council of Ministers is tasked with monitoring the implementation of the PA’s legislative plan. However, ministries reported that legislation was prepared, with short or no advance notice and weak strategic coherence with the overarching policy agenda.
The legislative process in the Palestinian Authority is the result of exceptional international and domestic political developments and needs to be reviewed in this context in order to be understood. The absence of the parliamentary body since 2007 had a profound impact on the processes for making primary laws, effectively eliminating the democratic system of control by the legislature.
As a result, there are two different procedures in place for developing legislation in the Palestinian Authority: The regular procedure, applicable when the PLC is in session, and the exceptional procedure during periods when the legislature is absent.
Regular procedure
The PA’s regular law-drafting procedure is rooted in the Basic Law, which provides that both the executive and the legislative may initiate primary legislation. In line with the democratic principle of the separation of powers, the Basic Law invested the PLC with the power to adopt laws that are initiated by the executive.
The Basic Law assigns ministries the power to “prepare drafts and legislation related to the ministry and propose them to the Council of Ministers” (Article 71.4). The legislative proposals should be based on the General Development Plan prepared by the CoM (see Part I for further information on the procedures for policy development). Sometimes, committees established by the CoM look into certain technical issues to propose a policy response and task the relevant ministry with developing the draft.
The legislative draft is sent to the Diwan, which prepares a formal draft without altering legislative substance or purpose. In its drafting, the Diwan considers the consistency of the proposed legislation with the Basic Law and existing legislation. Once drafted by the Diwan and, if necessary, revised by the promoting ministry, the legislative drafts are sent to the General Secretariat of the Council of Ministers, where they are discussed in three readings and, again, scrutinised for consistency with existing legislation.
The General Secretariat of the Council of Ministers should refer the draft for consideration to a ministerial committee consisting of a number of relevant ministers and the head of the Diwan, under the chairmanship of the Minister of Justice (as set out in Law No. 4 1995). If this committee approves the draft, it is returned to the full Council of Ministers, which may accept or reject it, or ask for it to be amended. In practice, such committee is yet to be implemented and the Diwan is currently pursuing its establishment.
If the Council asks for amendments, the draft is returned to the Diwan for revision before being submitted to the Legislative Council. The President shall promulgate the laws voted by the Palestinian Legislative Council within 30 days of reception according to Art. 41 of the Basic Law. The President may refer a law back to the Legislative Council with his observations and the reasons of his objection within the same period. Otherwise, the law will be deemed promulgated and will be published in the Official Gazette. If the President of the PA returns the proposed law to the Legislative Council within the time limit, the Council shall debate the law again. If the Council passes the law a second time, whether in its old or amended form, by a majority of two-thirds of its members, the proposed law shall be considered approved and shall be immediately published in the Official Gazette.
All laws are published by the Diwan in the PA’s Official Gazette as per Law no. (4) 1995 Concerning the Procedures for Preparing Legislation, and come into effect 30 days after publication. The Gazette can be accessed online via the online legal database Al-Muqtafi managed by Birzeit University. The Diwan also publishes laws and regulations on its website.
Exceptional procedure
Since 2007, the legislative process in the PA takes place in the absence of the Legislative Council. Article 43 of the Basic Law (see Box 8.2) grants the President the power to issue legislation in the form of presidential decrees in cases of necessity and when the Legislative Council is not in session.
Art. 43 Basic Law: “The President of the National Authority shall have the right in cases of necessity that cannot be delayed and when the Legislative Council is not in session, to issue decrees that have the power of law. These decrees shall be presented to the Legislative Council in the first session convened after their issuance, otherwise they will cease to have the power of law. If these decrees are presented to the Legislative Council, as mentioned above, but are not approved by the latter, then they shall cease to have the power of law.”
Source: (Palestinian National Authority, 2005[16])
In the absence of the Council, the Council of Ministers should submit the revised draft of legislation that requires the President’s approval1 to the President’s Legal Adviser (PLA), who submits it for review to the General Administration for Legal Affairs (GALA) and its Department for Legislation. The focus of the review is placed on necessity, assessed also in light of the explanatory memorandum, where it is provided, and financial implications. For subordinate legislation, the draft is submitted to the Prime Minister who has the authority to issue as per Article 68 (7) of the Basic Law.
The absence of the legislature since 2007 raises the question of legitimacy of Palestinian law. Article 43 de facto establishes a discretionary power for the President to issue legislation as he sees fit, which is why it is meant to be used sparingly and in exceptional circumstances. Article 47 (3) requires for elections to be held regularly: “elections shall be conducted once every four (4) years in a regular manner”. The Basic Law therefore clearly does not foresee a prolonged use of Art. 43. The last elections for the Palestinian Legislative Council were held in 2006. This absence of political legitimacy is criticised by civil society organisations in the PA, and Palestinian scholars argue for the “people (to) be put back at the centre” of the legislative process (Khalil, 2013[16]).
In addition, Article 43 lacks regulation or further specification and it is at the discretion of the executive to decide how decree-laws should be prepared. This leads to inconsistent practices across the administration whereby institutions other than the Council of Ministers, such as the Diwan, sometimes put legislation forward.
In the absence of the PLC, all laws are provisional laws2 . It is unclear what their status is and will be once elections will take place. According to the Basic Law, “[…] these decrees shall be presented to the Legislative Council in the first session convened after their issuance; otherwise they will cease to have the power of law. If these decrees are presented to the Legislative Council, as mentioned above, but are not approved by the latter, then they shall cease to have the power of law”.
Given the amount of legislation the PA produced since 2007 and the fact that Gaza has been also enacting laws, this would require a substantial effort to 1) organise and prioritise the presentation of legislation to the PLC and 2) decide the principles for harmonising WB and Gaza laws.
In addition, many presidential decrees issued as per Art.43 during the absence of the PLC went beyond the criterion of “[…] cases of necessity that cannot be delayed”. As a result, two legislative systems have emerged in the West Bank and the Gaza Strip and the PA suffers from a duality and contradictions in legislations in both parts of the territories.
The legislative drafting guidelines (Box 8.3) provide guidance on the drafting process to civil servants in the PA. The guidelines are broadly in line with OECD recommendations and contain a number of good practice provisions, such as the need for defining the policy issue at hand and for assessing different regulatory and non-regulatory alternatives.
The legislative drafting guidelines were prepared in 2018 by a working group3 led by the Ministry of Justice in cooperation with EUPOL COPPS. They were originally approved when prepared by the OECD in 2013 by Prime Minister Rami Hamdallah at the official launching of the two manuals, and build on earlier versions of the guidelines developed in 2000 and evaluated by the OECD in 2011. The legislative drafting guidelines have been approved by the Council of Ministers pursuant to Resolution No. (17/174/07) of 2017 on 10/10/2017 and are considered binding.
Provide a procedural and technical guideline for preparing primary laws and subordinate regulations for competent authorities (legal units in ministries, Advisory and Legislation Bureau, etc.) based on international best practice;
Unify the methods of preparing legislation in the Palestinian community (West Bank and Gaza).
The guidelines contain two parts, one on the stages of drafting primary legislation and one on the particularities of drafting secondary legislation.
Part one: Stages of drafting primary legislation
Planning stage: Civil servants should specify the problem and planning impact evaluation, and plan the regulatory impact assessment (definition of the problem and SMART4 goals, identification of regulatory and non-regulatory options incl. the option to do nothing), consultations, enforcement, and evaluation;
Legislative Policy: This section explains the purpose of the “National Policy Agenda” and the process of translating overarching policy priorities into concrete regulatory proposals by preparing a legislative policy memorandum;
Action Plan: Upon receipt of the legislative policy memorandum, the competent authority is tasked with preparing an action plan to prepare the drafting process. This includes assigning tasks among team members, preparing a list of regulatory elements to be drafted, and anticipating enforcement measures;
Legislation Unit: This section explains the structure to be used when drafting a primary law (preamble, definitions, goals, enforcement);
Transitional and permanent provisions: This section refers to different implementation methods for primary laws, which can be transitional (“articles that that pave the way to transition from the implementation of a previous legislation to a new implementation which amends or annuls it”) and permanent.
Standards of legislative drafting: This section specifies the language to be used when drafting articles of a primary law.
Part two of the guidelines specifies the particularities of drafting secondary legislation, which mainly refer to the drafting structure of different types (bylaws, ministerial decisions, instructions).
The guidelines also contain a RIA template5 in the Annex.
Source: (Palestinian Authority Ministry of Justice, 2018[17])
While the guidelines explain in detail the legislative drafting process as such (e.g. the language and structure of primary laws), they lack more detailed explanation of the tools and processes used to assess regulatory impacts. It remains unclear how cost and benefits of a regulatory proposal can be assessed and how relevant data sources can be accessed, for example. The need for anticipating enforcement measures is mentioned, but no further detail is provided on how this can be done. Furthermore, the practical implications of the distinction between transitional and permanent provisions are not clear.
The Diwan currently develops an article that proposes a streamlined legislative process and promotes the use of good regulatory practices by providing bespoke guidance. The article will contain procedural instructions on impact assessment and consultations and will be accompanied by an action plan. Its implementation is foreseen as part of the Diwan’s implementation plan for 2021, but is currently at a halt.
Despite the existence of a formal requirement and guidance material, the systematic assessment of regulatory impacts ex ante so far has been lacking in practice in the Palestinian Authority.
Regulatory impact assessment is a fundamental process for ensuring that regulations meet the needs of businesses and people. A consistent, administration-wide approach to the use of RIA helps gather robust evidence when diagnosing the drivers of societal problems, justify the PA’s intervention, identify various possible courses of action (both regulatory and non-regulatory), and compare them against their anticipated costs and benefits.
Current procedure
The obligation to conduct RIA according to the legislative drafting guidelines has been in place since 2017, introduced by the Council of Ministers Resolution No. (17/174/07). The resolution states that each legislative draft should accompanied with an explanatory memorandum, a general policy paper, and an impact assessment related to the regulation. According to the Ministry of Justice, presidential decrees are exempted from the requirement to carry out a RIA.
The guidelines provide an overview of the impact assessment process for both primary and secondary legislation, which is broadly in line with the OECD Best Practice Principles for Regulatory Impact Assessment (OECD, 2020[15]). They state that:
“[A] written policy document [should be prepared for] examining benefits, costs and possible outcomes of legislations or any other government intervention. It aims to secure the quality and efficiency of government intervention.”
The guidelines’ emphasis on the importance of considering several regulatory and non-regulatory options, incl. the option to do nothing, follows international best practice and is particularly positive in light of the “regulatory reflex” prevalent in some ministries. However, a step-by-step guide to assessing regulatory costs and benefits is missing.
The RIA template provided in the guidelines is a good starting point for introducing impact assessments in practice, but some key elements are missing. Most notably, the template should include the expected net costs and benefits of the proposal.
In practice, RIA is not yet part of the process of developing new laws and regulations. A simplified impact assessment is carried out only in some parts of the administration and on an ad hoc basis. Priority consideration has so far been given to the identification of financial impacts: for some legislative drafts, the Ministry of Finance has been asked to assess financial and budget impacts. Other (distributional) socio-economic impacts are rarely being considered at present in practice, if at all.
Unlike in several OECD countries, there is not an extended or more in-depth RIA required for proposals with more substantial impacts in the PA. Many OECD countries require a simpler level of assessment for decisions with less complexity or limited economic impact. A full RIA is carried out after the preliminary impact assessment suggests that the impacts require a deeper analysis. This approach helps target scarce public resources towards the most burdensome pieces of legislation. See Box 8.4 and Box 8.5 for OECD best practices and country examples in this regard, as well as practice 2 of the accompanying Good Practice Manual.
RIA should not always be interpreted as requiring a full-fledged, quantitative cost-benefit analysis of legislation. A full assessment of macroeconomic impacts necessarily requires the adoption of sophisticated economic modelling. It is unlikely to be feasible in the majority of cases, given the general scarcity of expertise and resources available for the conduct of RIA in most countries. In such circumstances, implementing requirements to undertake substantially more demanding analyses involving general equilibrium models risks having perverse impacts, by diverting resources and focus from more feasible RIA tasks. Rather than always engaging in quantitative cost-benefit analysis, it is essential that officials in charge of RIA identify all possible direct and indirect impacts of alternative options that can in principle address and solve the identified policy problem.
For partial or simplified analysis, typically the methodological choices available to administrations are the following:
Least cost analysis looks only at costs, in order to select the alternative option that entails the lowest cost. This method is typically chosen whenever benefits are fixed, and the administrations only needs to choose how to achieve them.
Cost-effectiveness analysis (CEA) entails that administrations quantify (not monetise) the benefits that would be generated by one USD of costs imposed on society. The typical method used to compare options is thus the so-called benefit-cost ratio, which means dividing the benefits by costs. This method is normally used to all expenditure programs, as it leads to identifying the “value for money” of various expenditure programs. A typical question that can be answered through cost-effectiveness analysis is “how many jobs will be created for every Dollar invested in this option?”; or, “how many lives are saved by every Euro spent on this option?”.
Cost-benefit analysis (CBA) entails the monetisation of all (or the most important) costs and benefits related to all viable alternatives at hand. In its most recurrent form, it disregards distributional impacts and only focuses on the selection of the regulatory alternative that exhibits the highest societal net benefit. Accordingly, the most common methodology in cost-benefit analysis is the “net benefits” calculation, which differs from the “benefit/cost ratio” method that is typically used in cost-effectiveness analysis (being benefit minus costs, rather than benefits divided by costs).
Multi-criteria analysis allows a comparison of alternative policy options along a set of predetermined criteria. For example, criteria chosen could include the impact on SMEs, the degree of protection of fundamental rights, consumer protection, etc. Multi-Criteria Analysis is particularly useful when Impact Assessment has to be reconciled with specific policy objectives, and as such is used as an instrument of policy coherence. This method is more likely to capture distributional impacts, although this crucially depends on the criteria chosen for evaluating options.
Source: (OECD, 2020[15]), (OECD, 2015[17]).
Austria: For all new laws and regulations, an impact assessment is mandatory. The regulation underpinning this instrument provides an explicit list of impact dimensions that have to be assessed. Nevertheless, only impacts above a certain threshold have to be assessed in further detail. Thresholds are mostly quantitative and vary depending on the impact dimension, e.g. for environmental impacts it exceeds 10 000 tons of CO2 per year. Other relevant (sub-)dimensions include impacts on the business cycle (threshold 500 enterprises) and financial impacts like impacts on access to finance (threshold 2.5 million € or 10 000 enterprises). As a consequence, only for about 35% of new laws have a full scale RIA and resources can be directed to proposals where high quality impact assessments are needed.
Canada: Canada applies RIA to all subordinate regulations, but employs a Triage System to decide the extent of the analysis. The Triage System underscores the Cabinet Directive on Regulatory Management’s principle of proportionally, in order to focus the analysis where it is most needed. The development of a Triage Statement early in the development of the regulatory proposal determines whether the proposal will require a full or expedited RIA, based on costs and other factors.
Low impact, cost less than 10 million dollars present value over a 10-year period or less than 1 million annually;
Medium impact: Costs 10 million to 100 million present value or 1 million to 10 million annually;
High impact: Costs greater than 100 million present value or greater than 10 million annually.
United States: RIA is required for significant and economically significant regulatory actions as defined under Executive Order 128666 and Executive Order 13563. An economically significant regulatory action is one that:
Likely to impose costs, benefits, or transfers of $100 million or more in any given year;
Adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.
Source: (OECD, 2019[18])
Because of the still relatively novel character of the tool in the PA, there is the risk for RIA to be seen largely as a mechanistic “tick-the-box” exercise to be deployed after concrete decisions have been made on the political level. There is limited appreciation of the benefits associated with using RIA as a process to facilitate policy integration and proportionate interventions, and rationalising public decision-making.
As a result of the lack of RIA implementation, there is weak understanding among PA officials of how regulatory interventions affect incentives for stakeholders and the public to change behaviour, and of the types of impacts that PA interventions are likely to trigger.
It is not seldom that PA laws have to be reconsidered (“frozen”) because of the emergence of unintended consequences, either because the likely impacts had not been anticipated or correctly appraised ex ante, or because regulated parties face compliance challenges.
Skills and analytical capacities
As explained in section 3 Capacities, the PA operates with severely strained financial and, most importantly, analytical resources. This particularly affects the approach to regulating and the implementation of regulatory impact assessment in practice, or lack thereof.
Ministries and bodies with key competencies in the regulatory process are understaffed and lack analytical resources. Staff in ministries consists mostly of lawyers and legal specialists. This informs the instinctive approach to regulation by the legal departments, which tend to act upon a “regulatory reflex” without necessarily addressing the drivers of the problem and alternative, non-regulatory interventions in a comprehensive manner. In addition, economists, social scientists, and public policy specialists able to analyse wider social and economic impacts and carry out a comprehensive cost-benefit-analysis are missing. As a result, regulatory impact assessment is yet to be implemented in practice in ministries.
Also, there is a lack of practical guidance available to civil servants in legal departments, as discussed earlier in this section. The legislative drafting guidelines are an important step towards introducing an effective, transparent, and evidence-based approach to legislation making in the Palestinian Authority. At the same time, a more hands-on, practical guide explaining the different steps of legislative drafting and tools such as cost-benefit-analysis in detail is missing. Birzeit University’s Institute of Law prepared a regulatory impact assessment guide as part of an EU-funded project on building a sustainable legal aid system in the PA (Birzeit University Institute of Law, 2017[19]), which reiterates the need for RIA but does not provide practical instructions either.
Lastly, there is no targeted training available to civil servants on how to carry out an impact assessment in practice.
Data availability and accessibility
RIA should be supported with clear policies, training programmes, guidance and quality control mechanisms for data collection and use. Where relevant, RIA should make use of existing data and evaluation indicators – e.g., for countries monitoring performance indicators as part of the budget process, those collected by Ministries of Finance and audited by the Supreme Audit Institution. (OECD, 2020[15])
Data availability and quality, an essential element of proper analysis, is one of the most challenging aspects of RIA because it can be time- and resource-consuming to collect adequate data and it requires a systematic and functional approach.
OECD research showed that data availability for the assessment of regulatory impacts is an issue in the PA. A lack of availability of or access to relevant data significantly hampers objective and effective regulatory analyses and evidence-based decision-making. Most ministries reported that the lack of data availability poses an important challenge for collecting, processing, validating and using evidence throughout the phases of formulating policies and elaborating the PA’s (regulatory) interventions. Some ministries rely exclusively on indicators and data collected internally.
In addition, existing data is difficult to access due to strict confidentiality rules introduced by the access to information law, which hampers ministries’ ability to use existing data for decision making. Reportedly, civil servants also do not know where to locate adequate data sources as the legislative drafting guidelines do not contain information on where to find the data needed to support evidence-based regulation making.
Such deficit is both the cause and the consequence of other shortfalls of the PA system: a lack of good quality, easily accessible data contributes to poor policy design and in turn potentially to regulatory failure; exacerbates the dependence on external stakeholders for information; and is linked to a lack of awareness and expertise. (Allio, 2021[20])
Regulatory oversight of impact assessment
Although the Diwan is the de facto oversight body, several bodies share oversight functions with regards to regulatory impact assessment. In interviews, the Diwan, the Office of the President, and the General Secretariat of the Council of Ministers reported asking for the explanatory memorandum, should the draft be submitted to them without one. The GS has rejected legislative proposals in the past because the financial impacts were deemed not sufficiently assessed by the Ministry of Finance.
Crucially, there is no body responsible for systematically supporting and controlling the quality of regulatory impact assessment. The Diwan currently takes on the role of a de facto ROB, but due to the lack of implementation of RIA in practice this role is limited to requesting the impact assessment statement. In addition, the Diwan is not well positioned for providing support to ministries with RIA in the way the legislative process is currently organised, because it exchanges with ministries too late in the process. The Diwan is often involved in the final stages of the drafting process only, when the legislative proposal is almost final. Due to such oversight functions not being part of Diwan’s current mandate, ministries also reportedly do not accept feedback or support provided by the Diwan with regards to impact assessment.
Several bodies share the responsibility for reviewing the legal quality of legislative drafts in the Palestinian Authority. The President’s Legal Advisor, the GS of the Council of Ministers, the Diwan, and the Ministry of Justice all scrutinise the consistency with existing legislation and the formal quality of the draft at different stages in the regulatory process. There is also a committee tasked with reviewing consistency with international law and treaties during the legislative drafting process, the Legislation Harmonisation Committee headed by the Ministry of Justice.
All these bodies carry out their review independently. There seems to be no co-ordination of this effort or sharing of best practices. Currently, the Diwan is pursuing an extension of its mandate that will i.a. introduce a legislative quality unit tasked with reviewing legal quality. This move could help consolidate the responsibility for controlling legal quality within one body.
To ensure that the policy solution effectively addresses the problem at hand, it is important to identify and qualify, quantify and possibly monetise several types of impacts of several regulatory and non-regulatory alternatives (including the no-action option). The Good Practice Manual complementing this review discusses the process of identifying possible appropriate instruments in Practice 3.2. Thinking of regulatory and non-regulatory instruments.
Following OECD best practice, the legislative drafting guidelines require the proposing ministry to identify at least three different options (Table 8.1): regulatory, non-regulatory, and the do-nothing option. Costs, advantages, and impacts on public spending have to be assessed for all options, including distributional impacts, i.e. the regulatory impacts on different groups in society. The latter is a rather advanced practice that even countries with well-developed regulatory systems have not yet implemented fully.
In practice, ministries do not yet assess alternatives to regulations regularly when proposing new legislation. On the contrary, ministries tend to approach policy issues with a “regulatory reflex”, i.e. issuing regulations without first analysing the underlying policy problem and considering non-regulatory alternatives including the option to do nothing.
Mid-term and annual legislative plans are being produced on an ad hoc basis. A formal, harmonised process for forward planning of rule-making activities is still missing with some ministries preparing legislative plans individually. The failure to effectively plan and prioritise legislative and regulatory interventions and the lack of implementation when such plans are in place affects the effectiveness of PA interventions at all levels.
The revision of the legislative drafting guidelines led to notable improvements, bringing them broadly in line with the OECD standards and good international practice. The most important steps of the regulation making process are reflected in the guidelines. Nevertheless, some aspects are unclear and key elements are missing. Notably, there is a need for step-by-step, hands-on guidance on the application of good regulatory practices such as the analysis of regulatory costs and benefits when developing legislation.
There is no formalised approach to the drafting process and roles and responsibilities are unclear and partly overlapping. The process of developing laws in absence of the Parliament is not specified and it is at the discretion of the executive to decide how decree-laws should be prepared. This leads to inconsistent practices across the administration. Tasks that in other countries are typically in the responsibility of line ministries, such as providing rationale for the regulatory intervention or organising public consultations, are sometimes carried out by other bodies such as the Diwan, the Ministry of Justice or the GS, albeit in an un-coordinated and unsystematic manner. There is no consistent approach to legislative drafting within ministries either. Often, several departments are involved in the drafting process without co-ordinating with each other. The lack of a formalised approach to the drafting process hampers effective regulation making and policy integration.
Despite a formal requirement, regulatory impact assessment is yet to be carried out in practice. The Legislative Drafting Guidelines are mostly in line with international best practice and are an important step towards establishing a RIA system, yet implementation is lacking behind. This might partly be due the lack of systematic communication within the administration on the benefits of RIA to convey the importance and purpose of such analysis to civil servants. As a result, RIA is considered an additional burdensome obligation with unclear benefits in an already cumbersome legislative process. Most importantly, a lack of analytical capacities in line ministries affects the implementation of regulatory impact assessment in practice.
Data availability and accessibility, essential elements of proper impact analysis, are an issue in the PA. A lack of availability and difficult access to relevant data significantly hampers objective and effective regulatory analyses and evidence-based decision-making. To date, the legislative drafting guidelines do not provide guidance on data collection strategies and adequate sources.
The regulatory impact assessment system is not yet supported by regulatory oversight. There is no body responsible for systematically supporting and controlling the quality of regulatory impact assessment. The Diwan as the de facto oversight body requests impact assessment statements from ministries, but gets involved too late in the legislative process to be able to help ministries preparing them.
Recommendation 8.1 - Consider formalising, organising and making systematic the process of forward planning and developing new regulations. Roles and responsibilities of actors involved should be clearly assigned.
Formalise the legislative drafting guidelines to organise and make systematic the forward planning process, the RIA process, and the intra- and inter-ministerial consultation processes;
Organise and monitor the development and implementation of the PA’s legislative plan by a dedicated body. To this end, the PA should consider re-establishing the Ministerial Committee on Legislative Policies (MCLP) under the lead of the Ministry of Justice (as already discussed in Recommendation 7.2);
Cleary assign ministries a (stronger) role in the regulatory process within the guidelines. In OECD countries, functions like carrying out research on the rationale of the draft law and organising stakeholder consultations are typically within the responsibility of the lead ministry. In the PA, the Diwan, the Ministry of Justice, and the General Secretariat of the Council of Ministers currently carry out those functions;
Clearly communicate roles and responsibilities to all stakeholders across the administration to increase transparency and foster buy-in with the changes occurring in the system of better regulation. The goal should be to establish relationships of “no surprises”, whereby entities know who is responsible for each given function and understand clearly the processes and requirements for creating and passing a regulatory proposal into law to minimise frictions and maximise compliance.
Recommendation 8.2 - Introduce ex ante regulatory impact assessment gradually in practice as a default condition for any regulatory proposal.
Implement and enforce the requirement progressively. Transition phases and adjustment time may be envisaged to allow gradual familiarisation and compliance with the requirement by the ministries. It could be envisaged to “pilot-test” the RIA requirement in one or several ministries over the course of 1-3 years with the support of the OECD. Results of the pilots should be used to inform the existing methodology.
Introduce a proportional approach to RIA to help target scarce public resources to the most burdensome pieces of legislation:
Determine the objective cases when a RIA is a priori not necessary (exclusion criteria) and when a RIA may not be carried out (exemption conditions), and establish the related arrangements to ascertain and manage such cases; exclusions and exceptions should be kept at a minimum and based on clear criteria against which they should be justified (see Good Practice Manual Practice 2 for practical guidance on this issue);
Ensure a proportionate allocation of time and resources to the elaboration of RIAs, by tailoring the scope and depth of the analyses to the significance and magnitude of the expected impacts. A threshold could be introduced outlining criteria that allow legislation to undergo a simplified RIA process. This effort would have to be supported by the oversight body scrutinising the decision to conduct a simple RIA;
Create “RIA Working Groups” (or equivalent) to support implementation in practice, and leverage policy integration and structurally sharing multi-disciplinary expertise;
Revise the RIA template6 in the legislative drafting guidelines to include key elements such as net costs and benefits of the regulatory proposal;
Establish that each RIA be signed off by the minister responsible for the proposal, to ensure ownership and accountability;
Recommendation 8.3 - Support the implementation of RIA in practice by putting in place effective regulatory oversight. Quality control of legal quality should be consolidated in one single body and these functions should be granted and regulated by law, in line with the Basic Law.
Ensure that the regulatory oversight function is carried out by an independent body close to the centre of government. The Diwan, as PA’s de facto ROB, is well placed to carry out regulatory oversight functions with regards to RIA, including quality control of impact assessments and providing support to ministries. The development of the article expanding Diwan’s mandate to include oversight functions should be further pursued. The article will also introduce a new legislative quality unit that would be well placed to carry out review of legal quality which is currently split between Diwan, GS, MoJ, and OoP.
Ensure that the new oversight function is exercised with flexibility in relation to the type and level of support that the ROB provides to ministries and to the stringency with which draft RIA reports are scrutinised by the ROB. In the beginning, the ROB should focus its oversight function on providing support to ministries tasked with preparing a RIA and promoting the use of the standardised RIA template.
Provide for the evaluation by the ROB of the whole RIA system for efficiency and effectiveness, once it is running in practice. Performance of individual ministries could be “named and praised” in annual reports to promote compliance.
Recommendation 8.4 - Provide guidance on data collection7 as part of the legislative drafting guidelines. It should make use of stakeholder input to facilitate the use of reliable and relevant evidence in support of the regulatory process.
Reference the public sources of data and information that could be used to carry out the corresponding assessment, such as the Palestinian Central Bureau of Statistics in the section on data collection. Complementary data sources must likewise be defined, e.g. surveys or meetings with stakeholder groups;
Pay particular attention to fully using the potential of stakeholder consultation as a source for data as well as a means to verify its quality. It should be emphasised that in the early consultation stages, there are plenty of possibilities for gathering information, which, ultimately, will allow to conduct a correct assessment of public policy proposals. To this end, it is important that draft RIA reports form part of the documentation put on internal and external public consultation and that they may be commented upon by stakeholders.
References
[10] Allio, L. (2021), “Good Practices Manual. Implementation support for the project “Support the Palestinian Authority to enhance Governance and the Rule of Law”.
[9] Birzeit University Institute of Law (2017), Regulatory Impact Assessment Guide for Legislation and Government Interventions.
[3] EUPOL COPPS (2017), The Legislative Process in the Palestinian Authority.
[5] Khalil, A. (2013), “Beyond the written constitution: Constitutional crisis of, and the institutional deadlock in, the Palestinian political system as entrenched in the basic law”, International Journal of Constitutional Law, Vol. 11/1, pp. 34-73, https://doi.org/10.1093/ICON/MOS022.
[11] Ministry of Justice of the Palestinian Authority (2018), “The Legislative Drafting Guidelines”.
[2] OECD (2021), OECD Regulatory Policy Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/38b0fdb1-en.
[1] OECD (2020), Regulatory Impact Assessment, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/7a9638cb-en.
[8] OECD (2019), A closer look at proportionality and threshold tests for RIA, OECD.
[7] OECD (2015), Regulatory Policy in Perspective: A Reader’s Companion to the OECD Regulatory Policy Outlook 2015, https://www.oecd.org/gov/regulatory-policy-in-perspective-9789264241800-en.htm (accessed on 26 October 2021).
[6] Palestinian Authority Ministry of Justice (2018), “The Legislative Drafting Guidelines”.
[4] Palestinian National Authority (2005), Basic Law of the Palestinian National Authority.
Notes
← 1. See Types of regulatory instruments for legislation the executive can issue independently.
← 2. In December 2018 the Constitutional Court dissolved the PLC. However, decree laws issued after this date still refer to the Basic Law of 2003 and therefore, the obligation to present the laws to the PLC, once elected, remains.
← 3. Members of the working group: Office of the President’s Legal Unit, the Council of Ministers and its General Secretariat, the Ministries of Interior and Finance, the Advisory and Legislation Bureau (Diwan Alfatwa), Birzeit and Al-Quds Universities, and representatives from the private sector.
← 4. SMART = Specific, Measurable, Agreed upon, Realistic, Time specific.
← 5. See Annex A Legislative drafting guidelines: RIA Template
← 6. See the UK RIA template as an example in Annex B UK RIA Template.
← 7. Further information and best practices for a more comprehensive data strategy can be found in the OECD Digital government Studies issue The Path to Becoming a Data-Driven Public Sector, Chapter 2, and the OECD Digital government Toolkit, Principle 3 Creation of a Data-Driven Culture in the Public Sector as well as the Best Practice Principles for RIA (OECD, 2020[15]).