OECD praises gov’t efforts to cut regulation

The OECD has praised the Israeli government for the measures it has initiated in the past few years to reduce the burden of regulation on the economy and for the attempt to introduce tools for measuring the effect of new regulatory frameworks. A report by the OECD presented to the Prime Minister’s Office nevertheless states that these measures are only a start, and that government ministries need to improve coordination with regulatory bodies, to establish lines of communication with enterprises affected by regulatory decisions, and to formalize the tools for measuring the effect of regulation on the economy.

The OECD delegation that examined the regulatory situation in Israel mentioned in its report that government ministries still tend to implement very rigid regulation, and that this stems from risk aversion. The report says this ought to change, and that change can be brought about by means of the new tools for testing the effects of regulation.

The delegation praised the five-year government program approved two years ago and designed to simplify regulatory rules. The delegation pointed out, however, that government ministries are not trying to apply the conclusions of overseas regulatory bodies that have introduced reforms meant to simplify the system.

The report also says that government ministries in Israel have not developed a uniform procedure to determine how and when consultation should take place with commercial enterprises affected by regulatory decisions. There is also no uniformity on implementation of measurement of the impact of regulation, and the report says that this tool is still in its infancy in Israel.

The OECD team’s main recommendation is that the government should quickly introduce a uniform structure for all regulatory bodies to examine the impact of regulation on businesses, and that regulators should learn to rely on these tools and make use of them in decision-making.

For the medium- and long-term, the report recommends the formation of a ministerial committee on regulation, and a supervisory authority for regulation within the PMO that will have the task of ensuring that the streamlining of regulation in Israel is implemented at all levels and systematically. The report also recommends that the government should consider ways of measuring not only the costs of regulation for individuals and businesses, but also how far regulation attains its objectives in each sphere.

In presenting the report to the government, Nick Malyshev, head of the OECD Regulatory Policy Division, said that despite the significant progress made in recent years, administrative authorities in Israel still suffered from risk aversion, duplication, lack of coordination and rivalries.

Sources at the PMO expressed satisfaction at the praise Malyshev had for Israel and for Prime Minister Benjamin Netanyahu personally. Malyshev said that four years ago there was no regulatory policy in Israel at all, but that since the obligation to carry out RIA (regulation impact analysis) had been introduced, it had been decided to reduce the regulatory burden by 25%; regulation coordination units had been set up in government ministries; a methodology had been established; reforms had been made in business licensing; and regulation had been curtailed in important areas such as tourism and fire precautions. (Globes/TNS)