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Better Business Regulation in a Risk Society pp 231–251Cite as

SCM 2.0: An Argument for a Tailored Implementation

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Abstract

The present Standard Cost Model (SCM) is a policy instrument for measuring the compliance costs of legal information obligations from businesses, institutions and civilians to government and governmental institutions. The main function of these information obligations is to allow government monitoring the compliance. Since 2003, the first generation of the SCM—SCM 1.0—spread very quickly over more than 20 countries. Yet, now that the use of SCM has proliferated and many practical experiences are available, time has come for a further discussion. Such a discussion could provide further thoughts for improvement and elaboration of the model towards a new generation of the SCM, the SCM 2.0. Looking from the perspective of a risk society, it appears that a strategy of deregulation should be replaced by a strategy of better (business) regulation. After all, better regulation is one of the corner stones for effective risk management. How could a SCM 2.0 fit in such a strategy? Strong features of the SCM are its capacity to reduce complexity—standardisation of compliance—and its flexibility. These features fit quite well to the main stream theories on policymaking: bounded rationality of the “administrative man”, mixed scanning, incrementalism and non-sequential policy stages. The big challenges for the next generation of the SCM—SCM 2.0—are to add modules for standardised financial and substantive compliance costs and standardised benefits. In addition, a safeguard against compromising political rationality should be constructed, inspired by the technical rationality, the means to achieve the public goals of the risk society. The SCM 2.0 could be helpful in this respect.

André Nijsen is the founding father of SCM.

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Notes

  1. 1.

    Consumers, clients, patients or other businesses with e.g. safety information documents (REACH).

  2. 2.

    However, the first official implementation of Mistral® was in the public sector mainly.

  3. 3.

    Website EC: http://www.ec.europa.eu.

  4. 4.

    The SCM Network website, http://www.administrative-burdens.com.

  5. 5.

    For example, the Financial Mail from 21 March 2010 quotes sources close to the UK Administrative Burdens Advisory Board: “Cutting red tape has not been dismissed completely by the Government but, inevitably, there are other priorities”.

  6. 6.

    I refer the interested reader to the chapters “Origin and Functionalities of Regulation” and “SCM to Measure Compliance Costs”, both written by myself, being the founding father of Mistral®, the forerunner of the SCM (Nijsen 2009a, b).

  7. 7.

    For an extended description of the different stages in the development of Mistral® see Nijsen (2003). Unfortunately this text is available in Dutch only.

  8. 8.

    To present some background figures about the number of IOs and related interviews: on behalf of the Dutch baseline measurement with reference year 2007, 4,751 IOs were under scrutiny of which 2,602 in almost 2,000 interviews with businesses or their representatives.

  9. 9.

    The same holds for legally prescribed activities like testing products, drawing floor plans, keeping up registers, and developing security measures and plans.

  10. 10.

    In the Netherlands there will be a feasibility study after the “Green SCM” in 2012 charged by the Dutch Ministry of Economic Affairs, Agriculture and Innovation. The basic question is how to model on the reduction of carbon emission related to the change of paper based B2G legal information exchange to electronic based B2G information exchange (e-Government) in order to achieve a two-edged sword: reduction of administrative burden and carbon emission?

  11. 11.

    The stages are approximately overlapping and rounded up by decades.

  12. 12.

    The modern economist view on bounded rationality is that decisions are made under imperfect and incomplete information when the cost of gathering additional information does not outweigh the benefits of using that additional information in strategic decisions. However, the point is that “administrative man” mostly will not have a clue about this process of outweighing.

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Author information

Authors and Affiliations

  1. Regulatory Reform Adviser, Schoonhoven, The Netherlands

    André Nijsen

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  1. André Nijsen
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Correspondence to André Nijsen .

Editor information

Editors and Affiliations

  1. Jouy-en-Josas, 78351, France

    Alberto Alemanno

  2. Amsterdam, 1081 HV, Netherlands

    Frank den Butter

  3. Schoonhoven, 2871 PM, Netherlands

    André Nijsen

  4. Surrey, GU2 7XH, United Kingdom

    Jacopo Torriti

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Nijsen, A. (2012). SCM 2.0: An Argument for a Tailored Implementation. In: Alemanno, A., den Butter, F., Nijsen, A., Torriti, J. (eds) Better Business Regulation in a Risk Society. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-4406-0_14

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