How to Build Regulatory Reform and Regulatory Systems

Abstract

Regulation matters! It organizes markets and societies and is therefore a cornerstone of freedom and welfare. But regulation may also cause problems, unnecessary burdens, unintended side-effects and costs. The aim of this chapter is to give evidence that – and how – regulatory systems can be built to become more effective than most of them are today. With a heuristic approach, this chapter is looking for successful measures and trying to identify patterns.

Based on three principles, (i) a robust, responsible and flexible architecture, (ii) the necessary perspective of the beholder (here: business) and (iii) a target-oriented strategy, a regulatory system should be built on evidence-based solutions, acceptance within the businesses by consultation, the monitoring and steering of the regulatory process, independent scrutiny and legitimacy and a political program to make the cross cutting issue powerful.