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Techniques Available for Estimating the Impact of Regulations

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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

There are a considerable number of techniques and models for estimating the level of impact of regulations. Cost benefit analysis is considered particularly important for regulatory analysis. However, there is no definition of compliance costs that has gained wide acceptance. Disagreement exists about whether certain elements should be included in the calculation of compliance costs (e.g. “psychological costs” that are difficult to measure and quantify). This chapter offers a critical explanation of a variety of techniques that are in common use and then summarizes those that are adopted by governments around the world. A pre-requisite for any method is that relevant data should exist (or be collected) and that this data must be assembled in the most appropriate way. In the absence of these requirements, even the most suitable techniques will be subject to criticism.

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Notes

  1. 1.

    OECD.

  2. 2.

    Chittenden F, Kauser S and Poutziouris P, 2002, The Regulatory Burdens of small Business: A Literature Review, Manchester Business School.

  3. 3.

    Supra, n. 4.

  4. 4.

    Chittenden F, Ambler T and Xiao D, 2007, Impact Assessment in the EU, in Better Regulation, Weatherill S (editor) Hart Publishing , Oxford.

  5. 5.

    R E Lofstedt, ‘The Swing of the Regulatory Pendulum in Europe: From Precautionary Principle to Regulatory Impact Analysis’ 28:3 The Journal of Risk and Uncertainty 237.

  6. 6.

    F Vibert, ‘The Limits of Regulatory Reform in EU’ 26 Journal of Institute of Economic Affairs 3, at 17–21.

  7. 7.

    See Better Regulation Task Force, “Less is More: Reducing Burdens, Improving Outcomes”, 2005.

  8. 8.

    Viscusi, W. (1997), Improving the analytical basis for regulatory decision-making, in: Regulatory Impact Analysis, Best Practices in OECD countries, OECD/PUMA, Paris, 1997.

  9. 9.

    See Better Regulation Task Force, “Less is More: Reducing Burdens, Improving Outcomes”, 2005.

  10. 10.

    European Commission, “Action Program for Reducing Administrative Burdens in the European Union”, COM (2007)23 final.

  11. 11.

    Measuring administrative costs and reducing administrative burdens in the EU, MEMO/06/425, Brussels, 14th November 2006.

  12. 12.

    NAO, “Reducing the Costs of Complying with Regulations: the Delivery of the Administrative Burden Reduction Program”, 2007.

  13. 13.

    Budget 2005, Chapter 3, Meeting the Productivity Challenge.

  14. 14.

    NAO, op. cit.

  15. 15.

    Ibid.

  16. 16.

    Web site of the European Commission Representation in the United Kingdom, www.cec.org.uk/info/pubs/bbriefs/bb37.htm.

  17. 17.

    European Commission, “Better Regulation for Growth and Jobs”, COM (2005)97 final.

  18. 18.

    The Standard Cost Model Network, www.administrative-burdens.com.

  19. 19.

    WIFO-CEPS, “Pilot project on administrative burdens”, October 2006.

  20. 20.

    European Commission, op. cit.

  21. 21.

    The Standard Cost Model Network, www.administrative-burdens.com.

  22. 22.

    OECD Red Tape Scoreboard (RTS) – 13 countries participating, Lydia Jorgensen.

  23. 23.

    World Bank, “Group Review of the Dutch Administrative Burden Reduction Program”, 2006.

  24. 24.

    William J. Dennis, Jr “Administering the Sales Tax”, 2002.

  25. 25.

    Dennis, W.J. Op cit.

  26. 26.

    The MBS tax models were developed using data from almost 10,000 real businesses to track the effects of taxation on small limited companies (i.e. those employing less than 100 people) and unincorporated businesses (i.e. sole traders and partnerships employing less than 20 people) in Britain as well as quantifying the tax contribution of the small business sector to the UK economy as a whole. The models examine not just the monetary level of taxes (income, corporation, national insurance taxes and uniform business rates) but also the cost to a business of compliance with the tax system: in other words, the estimated cost to a small business of acting as a collector of PAYE and VAT on Government’s behalf and of administering their own tax and legal affairs. Taxes deducted from employees earnings i.e. income tax and national insurance contributions are also included as these increase the costs of employing staff. A series of reports under the heading ‘Taxing Expansion’ have been issued which have focused on the impact that taxation policy has on the growth aspirations of small businesses. Practical cost efficient tax policies to stimulate long-term sustainable small business expansion have been outlined (Chittenden et al., 1996, 1998, 1999a, b; Poutziouris et al., 1999).

  27. 27.

    Survey no. 64 (2000 Quarter 3)

  28. 28.

    T Ambler, F Chittenden and S Iancich , “The British Regulatory System” (British Chambers of Commerce, London, 2008)

  29. 29.

    World Bank, “Group Review of the Dutch Administrative Burden Reduction Program”, 2006.

  30. 30.

    NAO, op. cit.

  31. 31.

    Ibid.

  32. 32.

    Manchester Business School: A Summary of UK Standard Cost Model.

  33. 33.

    NAO, op. cit.

  34. 34.

    Ibid.

  35. 35.

    Vibert F., The Itch to Regulate: Confirmation Bias and the EC’s New System of Impact Assessment (European Policy Forum, London, 2005).

  36. 36.

    NAO, op. cit.

  37. 37.

    OECD, “Cutting Red Tape: National Strategies for Administrative Simplification”, 2006.

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Authors and Affiliations

  1. Manchester Business School, University of Manchester, Manchester, UK

    Francis Chittenden

Authors
  1. Francis Chittenden
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  2. Stefano Iancich
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  3. Brian Sloan
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Correspondence to Francis Chittenden .

Editor information

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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Chittenden, F., Iancich, S., Sloan, B. (2009). Techniques Available for Estimating the Impact of Regulations. 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_4

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