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Reduction of Compliance Costs: An International Perspective

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Business Regulation and Public Policy

Part of the book series: International Studies in Entrepreneurship ((ISEN,volume 20))

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Abstract

In an increasing number of countries, policies have been started to reduce administrative compliance costs. Also, at the level of the EU, such initiatives have been taken. This chapter puts in picture an international comparison of mainly European countries regarding administrative compliance costs and reduction policies. We focus here on compliance costs for the business sector. In this chapter, we describe the reduction policies and compliance costs, and explain this with the role of the regulatory state and the role of the market and institutions.

Data on these issues is hard to find. We have used several proxy data to analyze the relative position of mostly EU-member countries regarding compliance costs and reduction policies and its development over time. We reflect on these data, and relate them to certain theoretical notions on welfare state arrangements and institutional change. Finally, concluding and contemplative remarks will be made.

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Notes

  1. 1.

    See Nijsen, A. (2003) Dansen met de octopus. Een bestuurskundige visie op de informatieverplichtingen van het bedrijfsleven in de sociale rechtsstaat (Dancing with the octopus. A public administrative vision at the information requirements of the private sector in a social state), Delft: Eburon.

  2. 2.

    See Christoph Müller (2006), Bürokratiekostenabbau – internationaler Methodenvergleich und das Niederländische Erfolgsrezept, Die Volkswirtschaft, number 1–2, pp. 27–31

  3. 3.

    Website SCM Network: www.administrative-costs.com

  4. 4.

    The OECD has published widely on (reducing) administrative costs, also relevant (by us used) background documents for this chapter. See in general on regulatory reforms: OECD, 2002, 2003b, 2005, 2006c, 2007d; Gönenç, R., Maher. M and Nicolcti, G. 2000. More specific on administrative burdens see: OECD 2003a, 2006b, 2006c, 2007b, 2007c.

  5. 5.

    Website EC: www.ec.europa.eu

  6. 6.

    For more relevant and (by us used) background documents of the European Commission on administrative costs see: Boeheim, M., Renda, A., Leo, H., Weijnen, T., Unterlass, F., Coletti, P. and Schratzenstaller, M, 2006; European Commission, 2005a, 2005b, 2006a, 2006c.

  7. 7.

    See for instance Dutch (EIM, 2002; IOO, 2007; IPAL, 2003; Regioplan Beleidsonderzoek (Region policy research), 2002; Research voor beleid (Research for policy), 2007; TILT, 2006) or Flemish reports (Flemish Government, 2006).

  8. 8.

    8 Website SCM Network: www.administrative-costs.com

  9. 9.

    See European Commission (2006b), Pilot Project on Administrative Costs. Prepared by WiFo and CEPS for the European Commission, DG Enterprise, December 2006 Costs

  10. 10.

    10 Source data derived from databanks of the WBG and the IMF

  11. 11.

    For other relevant and interesting work on political and institutional economics see: Aoki, M., 2001; Bardhan, P.K., 2005; Bowles, S., 1998; Featherstone, K. and Radaelli, M., 2003; Hamilton, W.H., 1919; Hodgson, G.M., 1988; North, D.C., 1990; Przeworski, A., 2004; Rutherford, M., 2001; Schmid, A.A., 2005; Samuels, W.J., 1971.

  12. 12.

    Industrial Policy and Economic Reforms Papers No. 1, The new Lisbon Strategy – An estimation of the economic impact of reaching five Lisbon Targets by George M.M. Gelauff and Arjan M. Lejour (CPB Netherlands Bureau for Economic Policy Analysis), January 2006, based Kox, H., 2005.

  13. 13.

    See S. Djankov, R. La Porta and A. Shleifer (2002), The regulation of entry, Quarterly Journal of Economics, vol. 117 (1), pp. 1–37.

  14. 14.

    See H. Kox (2005), Intra-EU differences in regulation-caused administrative costs for companies, CPB Memorandum, nr. 136 Rev. 1, Table 5.1

  15. 15.

    15 Source: Kox (2005) and Tang and Verweij (2004)

  16. 16.

    See G.M.M. Gelauff and A.M. Lejour (2006), Less red tape in Europe, in: G.M.M. Gelauff and A.M. Lejour, Five Lisbon Highlights. The economic impact of reaching these targets, CPB document 104, chapter 8, and Commission of the European Communities (2007), Impact Assessment accompanying the « Action Program for Reducing Administrative Costs in the European Union », Staff working document SEC (2007) 84

  17. 17.

    See P. Tang and G. Verweij (2004)

  18. 18.

    See http://www.oecd.org/document/1/0,3343,en_2649_34323_2367297_1_1_1_1,00.html, the Product Market Regulation homepage. The data are to be find at http://www.oecd.org/dataoecd/25/10/34634740.xls

  19. 19.

    All data were standardised with values between 0 and 5.

  20. 20.

    See http://www.doingbusiness.org/

  21. 21.

    During that period, it was possible to broaden the selection of indicators and to fill in many till then missing values. For the Western countries, the data set showed relatively few missing values.

  22. 22.

    In formula, if Vmin is the minimum value found in any country for a particular indicator, Vmax is the maximum value in any country for that same indicator, and Vi the value of that indicator for country I, then the score of this country is ((Vi – Vmin)/ (Vmax – Vmin)). The minimum value is 0, the maximum value is 100. The outcome changes if the country’s value changes, or if the minimum and/or maximum value changes.

  23. 23.

    Starting point were the 19 countries for which Kox (2005) presented data. Because the OECD did not provide data for the Slovak Republic, that country was removed. For the remaining 18 countries, data from the sources mentioned were collected and partly calculated.

  24. 24.

    In 2003 the World Bank used 18 indicators, in 2007 it was 42. Started with 4 groups of indicators in 2003, in 2004 two new groups were added, and in 2005, another 4. The World Bank expects to include new indicators on Infrastructure and Transparency in the Doing Business 2009 report.

  25. 25.

    The regular groupings are used, namely Scandinavian (Denmark, Finland and Sweden), Anglo-Saxon (Ireland and United Kingdom), Continental (Austria, Belgium, France, Germany, and Netherlands), Eastern European (Hungary, Poland, and Slovak Republic) and Mediterranean countries (Greece, Italy, Portugal and Spain).

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Authors and Affiliations

  1. Department of Public Administration, Faculty of Social Sciences, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Kees van Paridon

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  1. Kees van Paridon
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  2. Shivant Jhagroe
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Correspondence to Kees van Paridon .

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Editors and Affiliations

  1. Panteia B.V., Zoetermeer, 2701 AA, Netherlands

    André Nijsen

  2. Dept. of Economics, University of Bath, Claverton Down, Bath, BA2 7AY, United Kingdom

    John Hudson

  3. Inst. Betriebswirtschaftslehre, LS Entrepreneurship, Univ. Hohenheim, Schloß Osthof-Nord, Stuttgart, 70593, Germany

    Christoph Müller

  4. Fac. Social Sciences, Erasmus University, Rotterdam, 3000 DR, Netherlands

    Kees Paridon

  5. CASBEC Room H8-24, Erasmus University Rotterdam, P.O. Box 1738, Rotterdam, 3000 DR, Netherlands

    R. Thurik

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van Paridon, K., Jhagroe, S. (2009). Reduction of Compliance Costs: An International Perspective. In: Nijsen, A., Hudson, J., Müller, C., Paridon, K., Thurik, R. (eds) Business Regulation and Public Policy. International Studies in Entrepreneurship, vol 20. Springer, New York, NY. https://doi.org/10.1007/978-0-387-77678-1_2

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