Better Regulation in Europe

Abstract

"Better Regulation" is afoot in Europe. After several transatlantic conflicts over regulatory topics such as the precautionary principle, genetically modified foods, and climate change, Europe and America now appear to be converging on the analytic basis for regulation. In a process of hybridization, European institutions are borrowing "Better Regulation" reforms from both the US approach to regulatory review using benefit-cost analysis and from European member states' initiatives on administrative costs and simplification; in turn the European Commission is helping to spread these reforms among the member states. In many respects, the Better Regulation initiative promises salutary reforms, such as wider use of regulatory impact assessments and a reduction in unnecessary bureaucracy. In other respects, the European initiative speaks more of Procrustean deregulation than of better regulation. Meanwhile the European Commission still needs to establish the institutional infrastructure needed to succeed. This paper argues that the European program of "Better Regulation" is well-founded but could be even better if it adopted several strategies: enlarging the scope of impact assessment and benefit-cost analysis toward a broader, "warmer" and more evenhanded application of these tools, with greater attention to multiple risks; moving beyond a narrow focus on cutting administrative costs or simplification for their own sake, toward criteria that address benefits as well as costs; centralizing expert oversight so that impact assessments actually influence decisions, both to say "no" to bad ideas and "yes" to good ideas; and undertaking ex post evaluation of policies for adaptive policy revision and for improvement of ex ante assessment methods. These reforms would help Better Regulation achieve its true objective: better, not less or more. In turn, the US could study these European innovations and borrow from them where they prove successful.

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