ROMANIAsgg.gov.ro/docs/File/UPP/doc/evaluare/Methodological... · 2016-07-25 · Capannelli, and...

ROMANIA

Advisory Services Agreement on

Strengthening the Regulatory Impact Assessment Framework in

Romania

REPORT 1.3.1:

Final Report

September 2015

The current report corresponds to the deliverables “Final Report 1.3.1. reviewing the proposed legal

and institutional RIA system for Romania, including guidance on financial, budget and economic

analysis for RIA and required draft templates, and overall recommendations for improvement” in the

Advisory Services Agreement on “Providing Support to Strengthening the Regulatory Impact

Assessment Framework in Romania” signed between the Chancellery of the Prime-Minister and the

International Bank for Reconstruction and Development on April 24. 2014.

TABLE OF CONTENTS

List of Abbreviations 6

Aknowledgements 7

Executive Summary 8

1. Introduction 11

1.1. Evidence-based decision-making in modern government 11

1.2. General description of the project 12

1.2.1. Rationale (Romanian context) 13

1.2.2. Deliverables, components, calendar 14

1.2.3. Organization of project 15

2. Current RIA system and ways forward 16

2.1. WB recommendations for an improved RIA system in Romania 16

2.1.1. Summary of the WB Recommendations 17

2.1.2. New SN Guidelines 19

2.2. Identifying and assessing impacts of government interventions 20

2.2.1. Current data collection and quantification approaches 20

3. Conclusions 21

TABLE OF ANNEXES

Annex 1. SN Template 23

Annex 2. Revised RIA Guidelines 29

Introduction 29

Part 1. Methodological Guidance 30

Section 1. General information on the initiative 30

Steps 1-5: Administrative information 30

Section 2. Rationale for launching the initiative 30

Step 6: Problem definition 30

Step 7: No-action option (baseline scenario) 32

Step 8: Objectives 33

Section 3. Elaboration of regulatory and non-regulatory options 35

Step 9: How to identify the options 37

Section 4. Impact identification and assessment 38

Step 10: Economic impacts 41

Step 11: Budgetary and financial impacts 44

Step 12: Impacts on competition and on State aid 48

Step 13: Impact on small businesses (SMEs) 49

Step 14: Social and health impacts 54

Step 15: Environmental impacts 55

Step 16: Implementation arrangements 57

Section 5. Option selection 58

Comparing the options 58

Step 17: Presenting the options 63

Step 18: Recommending the preferred option 63

Section 6. Public consultation report 63

Step 19: Substantiation Note before consultation 64

Step 20: Substantiation Note after consultation 64

Section 7. Post-adoption arrangements 64

Step 21: Monitoring and evaluation activities 64

Section 8. Information on final endorsement 66

Section 9. Accreditation 67

Part 2. Data Collection And Public Consultation 688

How can I collect data? 668

How can I plan and run public consultation rounds? 69

Addendum 1. Potential Economic, Social And Environmental Impacts 72

LIST OF ABBREVIATIONS

Abbreviation Explanation

CPM

Chancellery of the Prime Minister

DCPP Department for the Coordination of Policies and Programs

EC European Commission

EU European Union

GEIEAN Group for the Economic Impact Assessment of Normative Acts

GoR Government of Romania

GAWP Government Annual Work Plan

EU European Union

MARD Ministry of Agriculture and Rural Development

ME Ministry of Energy, Small and Medium Enterprise and the Business

Environment

MLFSPEP Ministry of Labour, Family, Social Protection and Elder People

MPF Ministry of Public Finance

MRDPA Ministry for Regional Development and Public Administration

PPU Public Policy Unit

RIA Regulatory Impact Assessment

SME Small and medium-sized Enterprise

SN Substantiation Note

WB World Bank

WG

Working Groups

AKNOWLEDGEMENTS

This report was prepared a team composed by Lorenzo Allio, Delia Rodrigo, Jacopo Torriti and Peter Kirkegaard with the support of Oana Frant. Valuable comments were provided by Mariana Iootty and Arabela Aprahamian. The report benefitted from helpful comments from the following peer-reviewers: Raluca Ardeleanu, Doerte Doemeland and Victor Giosan. The team would like to thank Paloma Anos Caseros, Javier Suarez, Christian Bodewig, Elisabetta Capannelli, and the Romania Portfolio Team for the continuous advice and support provided. The team would also like to thank the counterparts in the Department for the Coordination of Policies and Programs in the Chancellery of the Prime Minister led by Radu Puchiu, Dragos Negoita and Anca Lupu for a very productive collaboration. The World Bank team working in this project was composed by Mariana Iootty, Arabela Aprahamian, Alexandru Stanescu, Ana Florina Pirlea, Oana Frant and Natalia Mashaeva. Delia Rodrigo, Lorenzo Allio, Donald Macrae, Jacopo Torriti and Peter Kirkegaard provided RIA expertise and methodological guidance to the whole project.

EXECUTIVE SUMMARY

This is the Final Report of the Project “Strengthening the Regulatory Impact Assessment Framework in Romania”, which was conducted in cooperation with the Department for the Coordination of Policies and Programs (DCPP) of the Chancellery of the Prime Minister (CPM) of Romania between February 2014 and October 2015. It provides an overview of the whole Project and it consolidates the rationale for the recommendations prepared by the World Bank (WB) team on the Regulatory Impact Analysis (RIA) system in 2014.

A RIA system has been in place in Romania for several years, but its use remains uneven. Substantiation Notes (SNs) are a regulatory tool introduced by the Government of Romania (GoR) almost ten years ago, being the closest instrument to RIA that Romania regulators have at disposal. The current RIA system underperforms, while the need to make proper use of the tool remains.

In this context, the GoR requested support to World Bank (WB) to review the current RIA system and support creating administrative capacities to improve the development of RIA.

The Project started with a diagnostic exercise of the main features characterizing the current RIA system and of its performance.1 It highlighted a number of important positive elements that mirror international good practice for evidence-based decision-making. The diagnosis identified also possible areas for improving the organizational and procedural arrangements. The diagnosis also considered the analytical capacity of the RIA system to produce high quality assessments.

On the basis of the diagnostic exercise, and further to close and constructive dialogue with DCPP, the WB team developed a series of recommendations to upgrade the current RIA system. The WB recommendations were presented to the GoR in August 2014, as building a coherent and encompassing set of actions.

The main recommendations on the organizational and procedural arrangements refer to the following elements:

Grounding SN to the Government Annual Work Plan (GAWP).

Applying exclusion and exemption criteria to first filter Government initiatives, which will not be subject to an impact analysis.

Determining the magnitude of the impacts by applying the “triage” mechanism.

Differences in expected impacts determine also the degree of analysis and the underpinning organization. In particular, a more comprehensive SN study (instead of merely filling the SN template) should be produced and a SN Working Group should be convened for high impact initiatives. This type of initiatives should undergo a double round of public consultation and be subject to both procedural and substantial review by DCPP.

The main recommendations on the capacity to produce high quality analysis are presented below:

Simplifying the SN template, which has been reviewed on the basis of the three pilot exercises conducted in this Project.

Rationalizing and upgrading the underlying SN Guidelines, which have also been revised in light of their use in the preparation of the three pilot exercises.

1 See the “Consolidation Report” (deliverable 1.2.2, dated August 2014) under this Project.

Developing a systemic capacity-building program, in which the WB team has directly contributed to capacity building in the course of this Project, both through dedicated basic and advanced training programs and three pilot projects.

To date, the GoR has not implemented the recommended reforms. One year upon their formulation, the WB team remains nonetheless convinced of the validity of their rationale and of the necessity to intervene along the lines originally recommended. The WB team has also recommended the GoR to publish the reports and recommendations, in order to generate a sound debate about the relevance to streamline the RIA system.

The Project also built capacities within the Romanian administration by providing training and hands-on coaching in the preparation of RIAs. Three RIA pilot exercises were conducted to help government officials, participating in Working Groups (WGs) officially establish for this purpose, to prepare RIA reports. In addition, the Project also has addressed methodological issues emerging throughout the RIA process and supported the WG members.

This Final Report also presents the revised SN Guidelines, in addition to recommendations to make the current SMEs Test procedure and methodology more performing. The development of a single, coherent set of guidance material assisting SN drafter was one of the central deliverables of the Project. A first set of new SN Guidelines produced by the WB team which has been used as the background analytical support for the three pilot exercises. Overall, the WG members broadly appreciated the SN Guidelines. The WB team also put efforts in aligning the content of the guidelines with the principles, definitions and methodologies presented in the training programs.

In agreement with DCPP, the WB team has further improved the initial draft of the SN Guidelines. In particular, the upgraded Guidelines re-order the sequence of steps to be carried out by the analysts. A further major improvement refers to the integration into the SN Guidelines of the Manual on measuring administrative burdens as developed by GoR. The new SN Guidelines are submitted to the GoR as a separate deliverable.

In addition to the SN guidelines and SN template, the WB team also has reviewed the current SMEs Test methodological approach. Since 2014, the GoR is required to carry out a SME Test on all regulatory initiatives expected to bear economic impacts on private sector activities, and particularly on SMEs. To date, only a handful of SME Tests have been conducted, only partly with the full involvement of GEIEAN (Group for the Economic Impact Assessment of Normative Acts) and by following the procedural steps as outlined in Order 698/2014.

The WB team has taken note of the current organizational and methodological arrangements governing the SME Test in Romania; the following remarks and recommendations are made.

Considering SMEs as a part of RIA: The SME Test is primarily about introducing the SME dimension in the RIA logic. In addition, the Test is also meant to encourage regulators to investigate why many SMEs remain informal and whether the proposed measures create disincentives for SME to register. The final crucial issue is to use the SME Test as a means to facilitate policy integration. As currently organized and performed, the SME Test in Romania is disjoint from RIA. It would be more instrumental by contrast to make the SME Test be integral part of RIA and embed there the underlying rationales just outlined above.

The current SME Test methodology: With specific regard to quantification and, in particular, the reference to the “one-in / one-out” principle enshrined in the SME Test legal base, these requirements may turn out to be a disproportionately burdensome task for regulators in Romania. The quantification effort should be proportionate and it should be also in relation to the level of impact of the intervention. It is therefore advisable to revise and streamline the Methodology along the lines of the new SN Guidelines. It is

recommended to draw from the insights provided in the new SN Guidelines when revisiting the current official methodology.

The current organization and procedural arrangements: Consultation requirements appear to be inadequate and consideration could be given to extend minimum consultation deadlines to 30 days at least. The mandate and size of GEIEAN deserves being reconsidered. GEIEAN internal working methods are yet to be developed. The role and powers of the SME Department of the Ministry of Energy, SMEs and the Business Environment are insufficiently spelled out. Partly as a consequence of the above, there appear to be limited awareness across government services of the requirement to carry out SME Tests. It is therefore advisable to confer the review mechanism of the SMEs Test into the hands of the GoR, DCPP in particular, while granting GEIEAN the opportunity to issue opinions in the consultation process and structure the work of GEIEAN along dediated working groups to be established for each major initiative for which a SME Test is required; the SME Department, adequately equipped, could be made responsible for overseeing the overall SME Test system within the decision-making process, and for providing also secretariat functions to the GIEIAN (sub-groups).

Romania’s participation in EU for a on SMEs: The GoR may also consider the findings from the EU-wide review of SME Test design, practices and performances carried out under the aegis of the EU SME-Envoys network. The report is based on a survey held among the national SME Envoys, which was designed and analyzed by Belgium (acting as the rapporteur state).

Overall, methodological improvements can be used in further work on RIA and to support the preparation of impact studies in Romania. This Project has contributed to prepare the ground for a streamlined RIA system in Romania that includes a simplified application of the main tools that civil servants can use to prepare RIAs. The revised SN Guidelines and SN Template are part of the toolkit that can help technical staff to prepare sound RIAs. The adoption and systematic use of these documents might help the institutionalization of a more performing RIA system in Romania.

1. INTRODUCTION

This is the Final Report of the Project “Strengthening the Regulatory Impact Assessment Framework in Romania”, which was conducted in cooperation with the Department for the Coordination of Policies and Programs (DCPP) of the Chancellery of the Prime Minister (CPM) of Romania between February 2014 and October 2015. The project sought to support the Government of Romania (GoR) to streamline the Regulatory Impact Analysis (RIA) system by revising the institutional and legal set-up within the country’s administration, creating technical capacities to conduct RIA and raising awareness at the political level on the relevance of evidence–based decision making.

The Final Report is intended to provide an overview of the whole Project as well as to consolidate the rationale for the recommendations prepared by the World Bank (WB) team on the RIA system in 2014. The Report also presents the revised Substantiation Note (SN) Guidelines, in addition to recommendations to make the current SMEs Test procedure and methodology more performing. The development of the Project has contributed to refine the recommendations and SN Guidelines in order to support the streamline of the RIA system in Romania. It has also provided an opportunity to review the current SMEs Test methodology.

This Final Report contains all methodological issues that have to be taken into consideration to prepare a RIA that supports regulatory interventions. The implementation of the methodological recommendations was conducted through the development of three RIA pilot exercises, described in Report 3.2.2. on Pilot Projects. The SN Guidelines were used to support the preparation of the SN Reports.

The Report is structured in two main Sections, including this Introduction. The Introduction (Section 1) recalls the importance of grounding modern public decision-making on evidence and recapitulates the rationale and main features of the Project. It profiles RIA as the pivotal tool to enhance evidence-based approaches and summarizes the key deliverables submitted to the GoR and presents the project organization that supported their development.

Section 2 reports on the current organizational, procedural and analytical mechanisms that underpin evidence-based decision-making in the central GoR. It also focuses on the importance of data collection and quantification to support evidence-based decision-making and assess the recently introduced requirement to perform SME Tests in Romania. It starts by summarizing the main findings of the diagnostic exercise and the related subsequent recommendations for improvement, as formulated in the course of the Project. Section 2.1.2. introduces the rationale for revisiting the SN Guidelines as a particular deliverable in this context. It is then followed a section entirely dedicated to the recently introduced requirement to perform SME Tests in Romania. In this respect, the WB team has outlined the main notion of what a SME Test should be about and provided dedicated guidelines on how to carry it out. A number of considerations are offered to the GoR on ways to upgrade the current SME Test system and methodology.

1.1. Evidence-based decision-making in modern government

Governments are increasingly called upon to address wicked problems. They hence need to design and implement high quality public policy interventions (including regulatory actions) to face economic crises, tight fiscal constraints, and low levels of public trust. High quality government decisions are likely to result.

International experience in both developed and transition economies indicate that fostering evidence-based decision-making is likely to help governments to effectively face these challenges. Evidence-based approaches ground decision-making in the best available research and informed by

experimental data evidence from the field and relevant contextual evidence. To that end, it is necessary to deploy dedicated institutional and procedural arrangements which ensure that public policy and regulatory interventions apply the core principles of necessity, proportionality, subsidiarity, transparency, accountability, accessibility and simplicity.

Regulatory Impact Analysis (RIA) is the most widely used tool serving evidence-based goals. It systematically examines the potential impacts of government actions by asking questions about the costs and benefits; how effective will the action be achieving its policy goals and; whether there are superior alternative approaches available to governments.

While RIA finds expression in an analytical report that supports decision-makers, the notion of RIA should be understood more widely as an integral part of the regulatory reform programme, embracing an institutional, organisational and procedural dimension. RIA is very much a process of evidence-based decision-making. As a decision process, RIA is integrated with systems for consultation, policy development and rule making within government in order to communicate information ex ante about the expected effects of regulatory proposals at a time and in a form that can be used by decision makers, and also ex post to assist governments to evaluate existing regulations.

The diffusion and appropriate implementation of RIA regimes is therefore essential in recognition of the fact that RIA

enhances the rigor with which decision-makers operate;

increases transparency and accountability standards;

enriches the justification for decisions, yielding to likely more proportionate interventions that keep unintended consequences to a minimum; and

thereby helps shift decision-making away from a purely legalistic and procedural approach.

This Project has reflected the need to improve evidence-based decision-making in Romania. By reviewing the current system and having streamlined recommendations, the WB team has offered the GoR a comprehensive approach to use RIA as a tool for better decision-making and improved regulatory interventions.

1.2. General description of the project

The Project “Strengthening the Regulatory Impact Assessment Framework (RIA) in Romania” has been conducted between February 2014 and October 2015 to support the GoR to revise and streamline the use of RIA and to create capacities within the administration to conduct impact assessments. The Project was structured in three components (see Box 1), with activities tightly linked and carried out in parallel in a strongly coordinated manner so as to contribute in a synergic way to achieve the Project objective.

Box 1. “Strengthening the Regulatory Impact Assessment Framework in Romania”: project structure

Component 1 (“Improvement of the Impact Assessment System in Romania”) aimed to review the existing set of legal documents on the RIA system and streamline them, and to support the necessary institutional changes and legal amendments. The revised RIA system will be subsequently tested through selected pilot projects.

Component 2 (“Capacity Building and Raising Political Awareness”) aimed to develop a RIA technical assistance program devoted to different target groups, such as technical and legal staff responsible for drafting regulations, the central government, as well as policy makers and stakeholders, in order to create capacities to use this tool and to create demand for the use of RIA. The activities planned under this component also tried to raise political awareness regarding the benefits of using evidence-based

assessments for regulatory decisions. Moreover, these activities supported the development of pilot projects by enhancing specific technical expertise in key selected ministries.

Component 3 (“Pilot Projects”) developed pilot projects with three selected ministries, in order to support the creation of technical capacities, test the new RIA system, and learn from practical experience.

The main beneficiary of the Project has been the Department for the Coordination of Policies and Programs (DCPP) of the Chancellery of the Prime Minister (CPM). The leadership and inputs from the center of the government has been a critical asset of the Project. Even if DCPP is not yet formally responsible for ensuring quality support and control of RIAs in Romania, it is the best placed current structure in the GoR to coordinate and promote the use of RIA in the Romanian central administration.

The Project managed to support the creation of capacities within the Romanian administration by providing training and hands-on coaching in the preparation of RIAs, but the recommendations provided by the WB team to improve the RIA system have not yet been adopted by the GoR. The current political situation in Romania has not been conducive to the adoption of the recommendations; however, there was a commitment to conduct pilot projects that might result in improved regulatory interventions.

1.2.1. Rationale (Romanian context)

RIA has been in place in Romania for several years, but its use remains uneven. The current RIA system in Romania mirrors other RIA systems in Europe and is highly influenced by the tools and approaches used as part of the Better Regulation agenda of the European Commission. However, lack of technical capacities and a firm political commitment have been constraints to prepare good quality RIAs that could support improve regulatory decisions.

This has led the RIA system to underperform, while the need to make proper use of the tool remains. In this context, the GoR requested support to the WB to review the current RIA system and support creating administrative capacities. The improvement of the RIA system can only happen over time and this requires persistent efforts to push for a change in the administrative culture to ensure RIA is properly used.

The Project was then designed to assist the GoR to tackle several gaps identified in an initial assessment conducted by the WB team.2 The Project was conceived to address the main issues identified: limited technical capacities and a strong legalistic interventionist approach to decision-making, reduced political commitment to the use of RIA and inadequate participation of stakeholders in the preparation of regulatory proposal. The three components of the Project were thought to address, to the extent possible and natural limitations of the project, these challenges.

In addition, the Project also has addressed methodological issues emerging throughout the RIA process. The current RIA in Romania requires quantification of various impacts and it includes the use of other tools, such as the measurement of administrative burdens or the SMEs Test, in the calculation of impacts. Given the current technical capacities and the limited participation of stakeholders at early stages of the regulatory process, there are serious concerns about the proper use of quantification. It was therefore important to streamline the use of current templates and guidelines, in order to simplify the RIA requirements.

2 "Report on the Current Gaps of the RIA System" (deliverable 1.1.1)

1.2.2. Deliverables, components, calendar

The Project had three main components, related to: (i) the improvement of the RIA system, (ii) capacity building and raising political awareness; and (iii) the development of pilot projects. The design and implementation of these components were interlinked to ensure a coherent approach to tackle the above-mentioned gaps. For each component, different activities were undertaken, as described briefly in the following paragraphs.

The main output of Component 1 was the Consolidation Report.3 This Report contained the analysis of the current gaps of the RIA system and capacity-building needs, as well as recommendations for a new institutional and legal system for RIA. This provided the ground for the interventions that were designed to address the challenges identified.

Component 2 included the preparation of a wide range of outputs that sought to create capacities in the Romanian public administration and helped create awareness at the political level on the relevance of the use of RIA. These outputs included peer events with technical staff of various ministries, workshops with DCPP staff, peer events with stakeholders (such as the private sector), study tours, awareness events on RIA and specific training on RIA methodologies.

Component 3 included the preparation of three RIA pilot exercises4 in selected ministries. This included the preparation of SN Reports that focused on three distinct topics: (i) food fraud with the Ministry of Agriculture and Rural Development (MARD); (ii) social housing with the Ministry of Regional Development and Public Administration (MRDPA); (iii) apprenticeship with the Ministry of Labor, Family, Social Protection and the Elderly (MLFSPEP).

Component 2 and 3, in particular, had a very strong link. The development of pilot projects was not an isolated exercise, but a continuous process that supported the WGs in various ways. Pilot projects were designed in conjunction with other activities that were fundamental for the preparation of the analysis. An overview of all the events delivered under Components 2 and 3 of the Project is presented in Table 1.

Table 1. Capacity building and raising awareness events under Components 2 and 3

No. of events delivered

No. of participants

2.2. Capacity building activities

2.2.1. Peer events for technical and legal staff 7 140

2.2.2. Peer events for the DCPP, Ministry of Finance and Ministry of Economy 25 348

2.2.3. Peer events for stakeholders 8 183

2.3. Advocacy and awareness raising activities

2.3.2. Study Tours 3 60

2.3.3. Awareness events on RIA 3 42

3.2. Development of pilot projects to implement the RIA system in Romania

3.2.1. Peer events with the working groups in charge 75 37

3.3. Advocacy and raising awareness activities

3.3.1. Awareness events on pilot projects 4 40

3 The Consolidation Report draws on the following deliverables: "Report on the Current Gaps of the RIA System" (deliverable 1.1.1), "Report on Recommendations for a New Institutional and Legal System for RIA" (deliverable 1.2.1) and "Report on Capacity Building Needs" (deliverable 2.1.1) of this Project.

4 The work on RIA pilot projects has been explained in detail in “Report on Pilot Projects” (deliverable 3.2.2).

1.2.3. Project Organization

The Project required intensive management and organization support to ensure proper coordination and communication with the client and different counterparts. Deliverables run in parallel and this required constant organization to ensure timely implementation. It was also important to plan in advance and coordinate with various institutions and stakeholders, particularly DCPP.

All outputs were delivered on time and with satisfaction of the client. The WB team delivered a high number of outputs to the client, including reports, training courses, study tours, stakeholder´s meetings, technical meetings with the Working Groups (WGs) in charge of the pilot projects, etc. The original planned schedule was respected and the very few changes responded to specific requests by the client. All events reported high satisfaction in content, logistics and organization. A constant interaction and open dialogues between the WB team and the client has certainly contributed to achieving these results.

The WB team included a group of experienced international and local experts. To effectively implement the various activities of the Project, it was necessary to mobilize not only a key group of RIA experts, but also experts on the various fields that covered the pilot projects. The WB team included international and local experts for a twofold reason. First, it was important to share good international practice during the project. Second, it was critical to ensure full understanding of the local Romanian conditions and challenges of regulatory interventions.

International RIA experts supported the preparation of recommendations to improve the institutional and legal RIA system, as well as the coaching and guidance the pilot exercises and the implementation of a strategic approach to the Project. The whole Project was strategically guided to implement RIA good practices, while adapting them in the Romanian context. Special attention was given of the gaps initially identified and how to tackle them in a proactive way so the RIA system could prove an effective mechanism to improve decision-making.

The pilot projects required intensive support from specialized, dedicated teams of consultants. The consultants were there to support and coach the WGs, guiding the discussions and showing the necessary analytical process and direction. They facilitated debates during the stakeholders meetings and technical discussions on the various topics subject to the SN. They also supported the WGs in the efforts to quantify costs and benefits and they provided methodological assistance to approach each one of the issues, considering the various impacts that any potential intervention might create. The WB experts were instrumental in reaching out to the WGs, organizing the work of the RIA process, attributing tasks and compiling information provided by the WG members. In some cases, the WB team also helped draft parts of the analysis or made suggestions on how to present the results of the analysis.

The Project benefitted from a committed partnership with DCPP, which played an instrumental role in the implementation of the Project. DCPP was essential in supporting the coordination and management of the Project, ensuring inter-ministerial communication and reaching out to stakeholders. It also contributed to maintain the commitment of WGs dedicated to the RIA pilot exercises.

DCPP participated in specific training to develop capacities for a quality support and control role in the RIA system. As part of the improvements of the RIA system, capacities in DCPP have to be strengthened to ensure overall coordination of the system, facilitate the preparation of RIAs in Romania, as well as to advocate for the use of the tool within the administration. Furthermore, DCPP has to be able to fulfill the task of future oversight body, reviewing the analysis prepared by regulators both from a procedural and a substantial perspective. This latter function is essential to improve their quality over time.

2. CURRENT RIA SYSTEM AND WAYS FORWARD

Substantiation Notes (SNs) are a regulatory tool introduced by the GoR almost ten years ago.5 They constitute the closest instrument to RIA that Romania regulators have at disposal.

The Project proceeded to a diagnostic exercise of the main features characterizing the current RIA system and of its performance.6 It highlighted a number of important positive elements that mirror international good practice for evidence-based decision-making. Among those are the basic understanding of the importance of evidence-based decision-making; the existence of a network unit for potential coordination and guidance at ministerial level; elements of formalized inter-ministerial coordination; and the attempt at systematizing the flow of Government (regulatory) decisions through the introduction in 2014 of the Government Annual Work Plan (GAWP, Plan Anual de Lucru al Guvernului).

The diagnosis identified also possible areas for improving the organizational and procedural arrangements, which are related to the following considerations:

Generally, RIA has been promoted in Romania, but it has not yet become a tool to support evidence decision-making. Decision-making tends to be unsystematic, personalized.

Specifically, both the political elite and the public administration are embedded in a normative interventionist culture.

The relevant legal bases are ambiguous and incomplete; the RIA system is disjoint from strategic planning and its scope of application is indiscriminately broad.

There is irregular sharing of information and data across ministries.

The steering and quality control functions are not formalised.

The SNs are not used by the Government as a means to make the interface with the public more porous and interactive; and

Also because of the lack in demand for RIA, the system has not been designed to self-diagnose gaps and, on the other hand, build on recognised good practices.

The diagnosis also considered the analytical capacity of the RIA system to produce high quality assessments. The following observations are to be considered particularly challenging:

A general lack of skilled human resources across the Government’s administration;

In particular, the wide-spread incapacity to establish objective, factual causal relationships between clearly established and prioritised causes, the set objectives and targets, and the possible policy options; and

The (objective) difficulty to collect and the incapacity to validate relevant data in support of the analyses leads to deficiencies in identifying and characterising the problem and in presenting qualitatively sound and quantified estimates of the likely impacts.

2.1. WB recommendations for an improved RIA system in Romania

On the basis of the diagnostic exercise, and further to close and constructive dialogue with DCPP, the WB team developed a series of ideas to upgrade the current RIA system.

5 Government Decision no.750/2005.

6 "Report on the Current Gaps of the RIA System" (deliverable 1.1.1)

The resulting recommendations built on two main assumptions.

First, as mentioned above and widely recognized internationally, RIA should be considered in its double nature of regulatory tool and decisional process;

Second, it is desirable and more effective to proceed to a gradual reform that leverages and builds on the existing positive features of the current RIA system rather than opting for a “shock therapy” approach.

The World Bank recommendations were presented to the GoR in August 2014, as building a coherent and encompassing set of actions. The overarching goal of such a reform strategy should be to enhance predictability; transparency and accountability; consistency and rationalization; as well as effectiveness and proportionality.

Two specific lines of action were presented: the revision of the organization and process for SN in the central public administration; and the upgrading the analytical capacity for SN. The recommendations are summarized in Section 2.1.1. below.

To date, the GoR has decided not to follow up with the recommended reforms. One year upon their formulation, the WB team remains nonetheless convinced of the validity of their rationale and of the necessity to intervene along the lines originally recommended. Any further project needs to take into consideration the need for the GoR to adopt the recommendation in order to make the RIA system fully operational and grounded on a sound legal basis.

The WB team has also recommended the GoR to publish the reports and recommendations, in order to generate a sound debate about the relevance to streamline the RIA system. The publication of the recommendations would contribute to enhance the awareness of the relevance to have a coherent and participative RIA system, which would encourage the evidence-based support for decision-making.

2.1.1. Summary of the WB Recommendations

This section summarizes the recommendations made by the WB team with the aim to upgrading the current RIA system and enhancing its performance for more rigorous and proportionate evidence-based decision making in Romania. For more details on the rationale and content of each recommendation please refer to “Report on Recommendations for a New Institutional and Legal System for RIA” (deliverable 1.2.1).

In relation to the organizational and procedural arrangements

The revision of the current organization and the process that underpins and governs the production of the SNs are the first main line of action of the reform. The recommended changes follow a five-fold rationale:

To bring the evidence-based reasoning back to the center of Government action;

To make the SN process feasible and manageable by introducing a proportionate scope of application;

To enhance public consultation and publication practices to ensure richer evidence collection and validation and incentivize continued quality improvements;

To reinforce the central steering and oversight function on SNs; and

To mainstream internal coordination and consultation, notably in cases of “high impact” proposals so as to create ownership within government for relevant decisions.

Accordingly, the GoR was invited to consider structuring the new RIA system along the following stages:

Grounding SN to the Government Annual Work Plan (GAWP), to increase systematicity, predictability and rational allocation of resources;

Applying exclusion and exemption criteria to first filter Government initiatives, which will not be subject to an impact analysis. The exclusion criteria should be exhaustively specified in relevant legal bases, while the decision to exempt an initiative from a SN should pertain to the Prime Minister upon proposal of the responsible line minister;

Determining the magnitude of the impacts by applying the “triage” mechanism. As a result, items will be classified into “low impact”, “medium impact” and “high impact” initiatives. The responsibility for carrying out the triage lies with the ministry(-ies) responsible for the initiative, following established, public criteria. In all cases, an impact analysis must be produced in accordance to the guidelines and the template established by the new legal base.

A new process of producing the analysis, differentiating three approaches according to the magnitude of impacts was then outlined. Following the principle of proportionality, the administrative procedures and requirements are lighter for lower impact and more complex for high impact initiatives. The main differences include:

SN study. A more comprehensive SN study (instead of merely filling the SN template) will have to be produced for high impact initiatives;

SN Working Group. This shall be convened by the SN initiator for those high impact initiatives, which the Inter-Ministerial Committee for coordination of elaboration and implementation of GAWP determines as having cross-portfolio implications;

Internal and public consultation on the SN. Unlike in the case of low impact initiatives, the initiating line ministry must organize both internal consultation and a public consultation exclusively focused on the draft SN; and

The central quality appraisal also varies. While no specific new feature is introduced for low impact initiatives, a procedural and a substantial screening by DCPP is required for medium and high impact initiatives, respectively. After having performed the central scrutiny, DCPP will issue an opinion addressed to the department drafting the analysis for revision.

In the case of medium and high impact initiatives, ministries would start drafting the acts to be submitted to Government for formal adoption only after considering the opinion on the SN or SN study issued by the DCPP. This will ensure that proportionality is better applied and quality control can properly be exerted.

Irrespective of the type of initiatives under preparation, once the draft legal act is produced, the process would basically follow the same requirements and stages, as it is currently the case. In the new system, publication will include keeping record of the SN process in a single portal administered by DCPP.

On the capacity to produce high quality analysis

The second line of action in the reform strategy for improved SN pertains to increase the quality of the analyses produced. To that end, the report envisages three levels of intervention:

The simplification of the SN template. The SN Template is the document that needs to be filled in when preparing any initiative that is expected to be adopted by Government (except in cases of exclusion or exemption). For high impact initiatives, as resulted from

applying the triage filter, the SN Template will constitute the Executive Summary to be attached to the more comprehensive SN Study. The current model provided for by Government Decision 1361/2006 is not wrong per se, but it may not be the most instrumental tool to assist the SN drafter.

The WB team proposed a possible streamlined format, which is being attached to this

Report (Annex 1) as well, in a slightly revised version.

The rationalization and upgrade of the underlying SN Guidelines. At present, several guidance documents exist that pertain to the preparation of SN in the decision-making process. The legal and operational nature of each individual guidance document is not clear. Ministries have de facto relative discretion in considering whether and when to use one source of support as opposed to others. It is therefore recommended that everybody be on the same page, taking account of both the new RIA system and the new SN Template.

The WB team has produced a new set of Guidelines (Annex 2) supporting the SN

drafting. An upgraded version of it is submitted to the GoR alongside this report (see also

Section 2.1.2. below).

The development of a systemic capacity-building program. Capacity building through training is a necessary element of the reform. In this respect, there is a wide tank of resources from initiatives over the past years that need to be capitalized upon. A capacity-building program, however, goes beyond training classes. It also relies on awareness campaigns addressed to policy-makers and encompasses an intensified dialogue with the business community and stakeholders. As the main reference body managing the new RIA system, DCPP appears to be best placed to take over the organization of the capacity-building initiatives aimed at strengthening the in-house expertise; raising awareness among policy-makers; and making the interface with external actors porous and constructive.

The WB team has directly contributed to capacity building in the course of this Project, both through dedicated (basic and advanced) training programs and three pilot projects.7

2.1.2. New SN Guidelines

As mentioned in the previous Section, the development of a single, coherent set of guidance material assisting SN drafter was one of the central deliverables of the Project. This reflected the need to bring the existing, disparate guidelines to international standards and to facilitate their use across ministries.

The WB team delivered a first set of new SN Guidelines which has been used as the background analytical support during the three pilot projects. It was conceived to assist the pilot WGs with filling the SN template and, in particular, compiling the SN Report.

Overall, the WG members broadly appreciated the SN Guidelines. They acknowledged them to have a direct and straightforward style while remaining exhaustive and clear. The user-friendliness of the Guidelines was particularly welcomed because they clearly offered better insights on how to proceed to the various analytical steps that constitute RIA and data collection.

The WB team also put efforts in aligning the content of the guidelines with the principles, definitions and methodologies presented in the training programs. In this case as well, there as been

7 A detail description of the RIA training program can be found in Deliverable 3.2.2. Report on Pilot Projects.

very positive feedback from training participants in being able to tangibly seeing the notions learned reflected in an operational working document.

In agreement with DCPP, the WB team has further improved the initial draft of the SN Guidelines, to reflect:

feedback for improvement received throughout the pilot project exercises;

expert inputs on selected analytical elements, such as the SME Test; the Administrative Burden measurement; the calculation of compliance costs and the estimation of environmental and social impacts; and

requests for more and better illustrative practical examples.

In particular, the upgraded Guidelines re-order the sequence of steps to be carried out by the analysts (this is further reflected in the new SN Template).

A further major improvement refers to the integration into the SN Guidelines of the Manual on measuring administrative burdens, as developed by the GoR as a part of specifically dedicated measurement projects over the past years. The Government has established a valuable set of guidelines, methodologies, databases and know-how that will prove most valuable to build upon when conducting future SNs.

2.2. Identifying and assessing impacts of government interventions

Evidence-based decision-making does not require full quantification. Decisions may well be adequately substantiated also by qualitative attributes, only – provided that assumptions, standards and decisional criteria are clearly spelled out, and sources of potential biases (e.g. subjective value judgments) transparently and effectively controlled.

Deploying quantitative methods to substantiate decision-making bears several advantages, including enhanced objectivity; reproducibility; as well as more transparent traceability and implementation review. As such, RIA drafters should make every effort possible to achieve adequate and proportionate quantification. The main concerns of the quantitative paradigm are that measurement is reliable, valid, and generalizable in its clear prediction of cause and effect.

RIA drafters should seek to express their arguments and evidence in quantitative terms in basically all phases of the RIA process. Problem definition benefits enormously from quantified evidence – notably when it comes to appraise the severity or the magnitude of the identified problem, or to set the baseline scenario (“no-action option”). Quantification is recommended also when defining the policy objectives, which should be expressed in clearly measurable terms and performance indicators. Last but not least, quantification is highly valuable when estimating the likely impacts of the various policy options identified in the RIA, allowing for objective comparisons among them.

2.2.1. Current data collection and quantification approaches

At present, Romanian regulators face disproportionate difficulties when they are asked to collect data to substantiate their decisions. A first area of concern pertains to the internal coordination across the public administration. The existence of ministerial databases appears to be poorly known across the services and it is often not possible to access them without filing explicit demand to the relevant service. There is no centralized (or anyway shared) database network within the public administration.

A second element refers to the interface between regulators and stakeholders. Experience with the RIA pilot exercises carried out in the framework of this Project has confirmed the presence

of more or less latent distrust that private sector actors have vis-à-vis the central administration. This is justified – in their eyes – by what is perceived as being confrontational attitude during the public consultation process, whereby regulators tend to present ready-made legal drafts which stakeholders should validate. There is also little confidence from the stakeholders that inputs and submission from their side are actually taken into account during the policy formulation process.

The above mentioned arguments should not hide the fact that stakeholders (including businesses) are often poorly equipped to respond effectively to data collection requests. Their internal organization is sometimes not sufficiently developed to reach out to membership in a timely manner. Moreover, a culture of evidence-based and constructive dialogue with the regulators is yet to emerge in Romania.

A third element contributing to the data collection and quantification challenges lies with the incapacity by regulators to validate relevant data in support of the analyses. This is mainly reflected in the relatively poor quality of problem identification and characterization. It is also the problem and in presenting qualitatively an obvious gap when it comes to provide quantified estimates of the likely impacts of proposed public policy choices.

Anecdotal evidence brought to the attention of the WB team indicates that, as a result of the above situation, the extent to which SNs provide quantified information on (regulatory) impacts largely remains insufficient. When present, the figures and amounts indicated in the SNs are often not accompanied by any underlying analysis, so that it is difficult for reviewers to check the validity of the assumptions; the adequacy of the models; and the pertinence of the data presented.

Data collection and quantification are therefore important elements to be improved in future efforts to strengthen the RIA process. The GoR is committed to stress the relevance of having adequate RIAs with sufficient information to substantiate decision-making. This has to be accompanied by adequate training, resources and time.

CONCLUSIONS

The Project “Strengthening the Regulatory Impact Assessment Framework in Romania” has offered an opportunity to revise and provide clear recommendations on the way forward in the use of RIA in Romania. The Project was based on a comprehensive approach to tackle the gaps and challenges of the current RIA system and engaged actively in the promotion of a different approach to RIA, in which capacity building and awareness raising among the political level played a relevant role.

The GoR requested support to the WB to review the current RIA at the central level and this has translated into a solid cooperation with relevant outcomes. Besides positive features, the WB team identified also possible areas for improving the organizational and procedural arrangements. The diagnosis also considered the analytical capacity of the RIA system to produce high quality assessments. The support to develop RIAs in selected ministries contributed to show the relevance of the tool in decision-making and the adoption of some of the recommendations will lead to have better regulatory interventions.

However, the GoR has decided not to follow up with the recommendations made by the WB to reform evidence-based decision-making. One year upon their formulation, the WB team remains nonetheless convinced of the validity of their rationale and of the necessity to intervene along the lines originally recommended. The implementation of the recommendations would constitute a clear engagement in the improvement of decision-making and a commitment to ground regulatory decision in technical evidence.

The WB team also has recommended the GoR to adopt, disseminate across ministries and regulatory bodies, and publish the revised SN Guidelines. The WB team believes that it would be highly instrumental if future projects addressing better integrated policy formulation and enhanced evidence-based decision-making were to follow up the constructive work achieved in this Project.

ANNEX 1. SN TEMPLATE

Substantiation Note Template

Section 1. General information on the initiative

1. Title of the initiative

2. Responsible department(s)

3. Contact person (Email, phone nr.)

4. Before / after consultation

5. Date

Section 2. Rationale for launching the initiative

6. Problem definition

What problem / issues require Government action?

What are the causes of the problem?

7. No-action option (baseline scenario)

Is the problem likely to get better / worse or remain the

same (without Government action)?

What are the likely impacts of the problem (e.g. financial,

economic, social /health, environmental)?

8. Objectives

State the goals the initiatives is set to achieve, with

measurable indications and definite deadlines

Section 3. Elaboration of regulatory and non-regulatory options

9. Description

Briefly describe (in a narrative) the main options you are considering – and the reasons therefor.

Option 1:

Option 2:

Option 3:

Section 4. Impact identification and assessment

10. Economic impacts

For each option, indicate

Type of economic BENEFITS Type of economic COSTS

Beneficiary group(s) Affected group(s)

Metrics and qualitative / quantitative estimation Metrics and qualitative / quantitative estimation

Administrative burden measurement (if applicable)

Option 1:

Option 2:

Option 3:

11. Budgetary and financial impacts


For the following year For the next 5 years

Option 1:

Option 2:

Option 3:

12. Impacts on competition and State aid

Option 1:

Option 2:

Option 3:

13. Impacts on SMEs

For each option, indicate the result of your SME Test

Option 1:

Option 2:

Option 3:

14. Social / Health impacts


Type of social / health BENEFITS Type of social / health COSTS



Option 1:

Option 2:

Option 3:

15. Environmental impacts


Type of environmental BENEFITS Type of environmental COSTS



Option 1:

Option 2:

Option 3:

16. Implementation arrangements

For each option, indicate the main issues related to its

implementation

Arrangements / changes for existing public authorities

Nature of related public funding

Arrangements / changes for the private sector

Implementation calendar

Other information

Option 1:

Option 2:

Option 3:

Section 5. Option selection

17. Summary of the options

Briefly describe the main results from your assessment of the options you considered, highlighting the differences with the latter.

Key benefits Major costs Risk / Uncertainties

No action option

Option 1

Option 2

Option 3

18. Recommendation

Indicate which one is the recommended option and describe the reasons why you come to such a conclusion.

Section 6. Public consultation report (art. 7 of Law 52/2003)

19. Substantiation Note BEFORE consultation

Key questions asked to stakeholders and experts

Envisaged stakeholders / experts to be consulted

Envisaged public hearing; reason and date thereof

20. Substantiation Note AFTER consultation

Method of consultation (hearing, online, etc.) and date

Participating stakeholders and experts

Short summary

Section 7. Post-adoption arrangements (for preferred option only)

21. Monitoring and evaluation activities

Performance indicators

Data collection channels

Actors

Foreseen timing for monitoring

Foreseen timing for evaluation

Foreseen scope of the evaluation

Section 8. Information on final endorsement

Legislative Council

Supreme Council of National Defence

Economic and Social Council

Competition Council

Court of Accounts

Section 9. Accreditation

Date Signature

ANNEX 2. REVISED RIA GUIDELINES

INTRODUCTION

These Guidelines support civil servants in ministries and State bodies tasked with the preparation of

Substantiation Notes (SNs) supporting Government decisions. They are designed so as to particularly

assist with the compilation of the SN Template.

The SN Template is the document that needs to be filled when preparing any initiative that is expected

to be adopted by Government.

The Guidelines are divided into two main parts plus technical additional annexes. The first part

provides in-depth guidance on how to conduct RIA analysis and explains how to fill the SN template.

It consists of nine Sections, which encompass the main analytical steps underpinning the SN exercise.

The nine sections are:

(1) General information on the initiative;

(2) Rationale for launching the initiative;

(3) Elaboration of regulatory and non-regulatory options;

(4) Impact identification and assessment;

(5) Option selection;

(6) Public consultation report;

(7) Post-adoption arrangements

(8) Information on final endorsement; and

(9) Accreditation.

Each section explains the importance of the underlying issues within the whole SN preparation process

and provides key definitions and outlines the main methodologies to perform the requested tasks.

Part 2 of the Guidelines focuses on the rationale, methods and channels to collect evidence (data as

well as qualitative information) and to design and conduct public consultation.

These Guidelines consolidate international guidance material and build on existing methodologies

developed by the Government of Romania and individual ministries.

If further technical background information is required, SN drafters are invited to consult the

comprehensive set of Impact Assessment Guidelines issued by the European Commission. The can be

found at the following link: http://ec.europa.eu/smart-regulation/guidelines/toc_guide_en.htm (in

English only).

PART 1. METHODOLOGICAL GUIDANCE

Section 1. General information on the initiative

The importance of this Step

The SN is the result of a logical analytical process, which is unique for each initiative considered to be

potentially adopted by the Government, in accordance to Government Decision (GD) 1361/20068 and

GD 561/2009,9 - as well as Law 24/200010 and Law 62/2014.11

For this reason, it is important that accurate information is provided to decision-makers and the

stakeholders so that they can situate the initiative at stake and identify the administrative office

responsible for the production and quality of the SN.

Steps 1-5: Administrative information

You must fill Steps 1–5 in the SN Template mandatorily. In particular,

• Step 1: you must indicate the title of the initiative, possibly as it appears in the GAWP;

• Step 2: you must indicate your institutional affiliation and any possible co-initiating body;

• Step 3: you must provide your contact details;

• Step 4: you must indicate whether the current version of the SN is drafted before or after the public consultation round; and

• Step 5: you must put the date of the day you transmit the SN to the Government.

Section 2. Rationale for launching the initiative

Step 6: Problem definition


Problem definition is arguably the most important step in the process of preparing a SN. The problem

must be characterized correctly if you are to solve it. The problem definition is the basis for everything

that follows. If the problem is not clearly defined, it is very unlikely that you will develop the right

solutions. No analysis – no matter how sophisticated – can compensate for a poor problem definition.

It is therefore important that adequate time and resources are dedicated to this step.

8 Governmental Decision no.1361/27.09.2006 on the content of the instruments for presentation and motivation pertaining to legal drafts pending for Government approval, published in the Official Gazette of Romania no.843/12.10.2006, as modified. The last amendment taken in the consideration by the Report was made by the Government Decision no.219/24.03.2010, published in the Official Gazette of Romania no.227/12.04.2010.

9 Government Decision No. 561 of 10 May 2009 approving the Regulation on the procedures, at Government level, for elaboration, endorsement and presentation of draft public policy documents, of draft legislative acts, as well as other documents, for adoption/approval, published in the Official Gazette of Romania no.319/14.05.2009.

10 Law no. 24 of 27 March 2000 on the legislative technique norms for drawing up legislative acts, ppublished in the Official Gazette of Romania no.139/31.03.2000, as modified.

11 Law no. 62/2014 amending the Law on the stimulation of SMEs, published in the Official Gazette of Romania no.328/06.05.2014 (which introduced the SMEs Test).

What does problem definition mean?

It means answering the following questions:

What is the issue or mischief that may require Government action?

What are the underlying drivers of the problem?

Why is it a problem?

Who is affected, in what ways, and to what extent?

Avoid common mistakes:

• Contenting yourself with no definitions or big, vague concepts (e.g. “There is no infrastructure.”)

Instead be precise: “The route from A to B cannot bear heavy trucks.”

• Inferring solutions (e.g. “There is no funding, hence children do not go to school.”)

Instead spell out the problem: “Children do not go to school.” (the cause might be too high school fees, or

other factors, not related to money, e.g. transport issues).

• Looking for non-existing problems (e.g. “There are no NGOs.”)

Instead consider the context: “There is little knowledge of how to run an NGO.”

• Formulating value judgments (e.g. “Bureaucrats are lazy.”)

Instead be objective: “The government licensing system is not efficient.”

• Confusing problem with possible solutions (e.g. “There is no law on heating systems.”)

Writing a law is never a problem, it is part of a possible solution to a given problem. There may be other

solutions, such as better enforcement, higher sanctions, simplification of the existing legal framework, or

education and information campaigns.

How to define a problem

The key for a good problem definition is to identify the drivers and establish how those specific

particular factors lead to the problem. This helps you tackle the causes rather than the symptoms.

By doing so, you must always hail back to ever more definite causes and find objective causal

relationships. The most direct way to achieve this is through the so-called “problem tree approach”.

This approach helps you:

differentiate between causes, symptoms and effects;

investigate cause-effects relationships;

identify affected groups;

set a hierarchy of problems; and

define scope and margins of intervention.

How to build a problem tree:

• Write your problem statement in the middle;

• Write all the causes in the compartments above;

• Write all the effects in the compartments below; and

• You can use balloons to add comments.

Your problem definition will have to focus on the upper part of the three (the “cause’s branches”). These can be

as many as they are relevant, and as detailed as necessary. You may have primary and secondary causes. You

will identify them by each time asking yourself the question “… and why is it so?”

Which cause(s) to tackle in your SN will depend on the priorities, competences and means at disposal.

Example:12

Step 7: No-action option (baseline scenario)

The importance of this step

Your SN is a comparative exercise appraising what will likely happen further to a Government

intervention as opposed to what is going to happen if Government does not intervene. Logically, you

will recommend Government to take any action only if there is sufficient evidence that that action

leads to better scenarios than the status quo.

Through this step you collect information on what is specifically wrong with the current situation; and

you gather knowledge and analytic capacity that you can later use to balance alternative options.

This step is fundamentally linked to the “Step 6: Problem definition”. Once you have ascertained the

nature of the problem, you should clarify whether there is something wrong – or not, which requires

Government intervention.

What does setting the baseline scenario mean?

The aim of the baseline scenario is to explain how the current situation would evolve without

additional public intervention – it is the "no policy change" scenario. It answers the question: “What

would happen if nothing further is done?”.

How to set a baseline scenario

When it comes to characterizing the current situation, you need first to consider the context:

12 Adapted from http://mechanisms.energychange.info.

Note that if there is no specific policy addressing the problem identified, the baseline means the continuation of "no policy". Where there is already a policy, the baseline is the continuation of the current policy without any change, i.e. without any new or additional intervention

Beware that "no policy" includes the expected effects of legislation which has been adopted but not yet implemented;

Take account of any EU or international policies already in place, not only national policies;

Take also account of any initiative launched by non-governmental actors, such as business or civil society associations; and

Consider relevant case law.

Questions that a baseline description should answer:

• How serious is the problem?

• Is it about to get solved? When? Why?

• To what extent will it by contrast become more serious? Why?

• What are the probabilities of these scenarios?

• Are there irreversible consequences?

In answering this questions, you need to clarify what assumptions you have made and what data you have used,

and why.

A good baseline should have a strong factual basis and, as far as possible, be expressed as much as

possible through quantified evidence. It should also be set for an appropriate time horizon (neither

too long nor too short).

Step 8: Objectives


It is important to identify and clearly define the goals because they define the main benefits of action

and, accordingly, determine the selection of solutions. Any intervention must have clear objectives

which are directly related to solving the problems identified, because this:

• helps show policy coherence and consistence;

• helps identify prospective courses of action, and assist in comparing policy options;

• makes possible to monitor implementation of the policy and to evaluate achievement or not of desired effects; and

• helps define the performance indicators for assessing whether the major policy objectives are being achieved.

What does setting objectives correctly mean?

Potential solutions to the problem should be assessed against so-called performance goals. In other

words, you should set the objectives to be achieved as measurable performance indicators for the

envisaged action (or no action).

Objectives can moreover be general, specific and operational. When you define such categorization,

make sure you establish clear links both between

• the objectives and the problem and its root causes; and

• the objectives themselves, so that they do not contradict each other.

General objectives

• These are Treaty-based goals which the policy aims to contribute to.

• They are the link with the existing policy setting.

• They should induce policy-makers to take account of the full range of existing policies with the same or similar objectives.

• They relate to impact indicators.

Specific objectives

• They take account of the envisaged specific domain and particular nature of the policy intervention under consideration.

• Their definition is a crucial step in the appraisal as they set out what you want to achieve concretely with the policy intervention.

• They correspond to result indicators.

Operational objectives

• These are the objectives defined in terms of the deliverables or objects of actions.

• These objectives will vary considerably depending on the type of policy examined.

• They need to have a close link with output indicators.

How to set objectives correctly

A useful rule-of-thumb when defining the objectives is to apply the SMART template – i.e., objectives

should be:

• Specific: Objectives should be precise and concrete enough not to be open to varying interpretations. They must be understood by all.

• Measurable: Objectives should define a desired future state in measurable terms, so that it is possible to verify whether the objective has been achieved or not. Such objectives are either quantified or based on a combination of description and scoring scales.

• Achievable: If objectives and target levels are to influence behavior, those who are responsible for them must be able to achieve them.

• Relevant: Objectives and target levels should be ambitious – setting an objective that only reflects the current level of achievement is not useful – but they should also be realistic so that those responsible see them as meaningful.

• Time-dependent: Objectives and target levels remain vague if they are not related to a fixed date or time period.

Setting Smart Objectives: An Example

Original policy goal statement: “To support business start-up in Romania”

Building the SMART components:

• Specific: “The Ministry of Economy to fund and organize information sessions for young entrepreneurs…”

• Measurable: “… three information sessions…”

• Achievable: “…drawing from existing budget lines…”

• Relevant: “… with the target of involving at least 500 young entrepreneurs…”

• Time-dependent: “…each year over the next biennium…”

Final policy goal statement: “The Ministry of Economy to fund and organize three information sessions each year

over the next biennium, drawing from existing budget lines with the target of involving at least 500 young

entrepreneurs.”

When bridging the “Problem Definition” and “Setting the Objectives” stages, be aware of what you

seek to impact. You may tackle outputs or outcomes, knowing that the extent to which you can

control achievement narrows progressively.

Framing the scope of intervention13

Government intervention must make a difference, and the SN you are producing must realistically show where

and how that will be the case. To do so, it is opportune that you understand what your scope of reference is:

• Outputs are actions taken in pursuance of policy decisions. They come first and are generally tangible,

concrete results of processing resources (inputs).

Example: the output of recruiting staff is newly appointed employees.

• Outcomes focus on the policy's consequences after implementation. Related to either the process or the

outputs, they in any case refer to the level of performance, or the achievement.

Example: the newly appointed employees may be capable, or incapable of performing their role (Competence

vs. Requirements); or too many / too few (Quantity)

Section 3. Elaboration of regulatory and non-regulatory options


Once you have defined your objectives, you have to identify and explore which options and delivery

mechanisms are most likely to achieve them. Reviewing a range of policy options provides greater

transparency to the SN exercise. It also grants more robust justification for the chosen course of

action, demonstrating to policy-makers and stakeholders that alternative options have been seriously

considered but were not pursued for a series of reasons.

What may constitute a possible option?

The first thing you have to bear in mind is that any Government action is meant to change behavior

of economic and social actors, so that problems are solved. Traditional regulation is but one possible

way to change behavior.

13 The picture above is adapted from Government of Canada sources.

EXTERNAL FACTORS

AREA OF INFLUENCE

EXTERNAL TO THE

AREA OF CONTROL

INTERNAL TO THE ORGANIZATION

EFFICIENCY EFFECTIVENESS

OUTPUTS ACTIVITIES

IMMEDIATE

OUTCOMES

(DIRECT)

INTERMEDIATE

OUTCOMES

(INDIRECT)

FINAL

OUTCOME INPUTS

(RESOURCES)

Possible types of government interventions

No single solution is correct a priori. The main types of options can be situated on a continuum from more

intrusive to more respectful of markets and individual choice. They include:

• Command and control regulation: Although prima facie it may appear as the easiest and most promising

solution (because clear, standardized and predictable), this type of regulation may lead to significant

compliance costs; rigidities; opportunistic behaviors (moral hazard).

• Performance-based regulation: This type of instrument set standards that specify the required performance

of the target population. It does not detail the exact mechanisms by which compliance is obtained, but rather

it specifies the criteria to be followed to achieve such compliance. Standards should be flexible allowing

aggregation or offsetting between different plants or agents, even regionally or nationally provided this does

not unacceptably affect the overall outcome.

• Co-regulation: This approach implies setting a regulatory framework in which the deadlines and mechanisms

for implementation, the methods of monitoring the application of the legislation and any sanctions are set

out. The legislative authority also determines to what extent defining and implementing the measures can

be left to the concerned parties. The latter must be considered to be representative, organized and

accountable. Co-regulation combines the advantages of the binding nature of legislation with a flexible self-

regulatory approach to implementation that encourages innovation and draws on the experience of the

parties concerned.

• Self-regulation: This covers (sectoral) codes of conduct and voluntary agreements, which economic actors

and / or civil society players set themselves to regulate and organize their activities. Self-regulation does not

involve a legislative act. Self-regulation may provide greater speed, responsiveness and flexibility as it can be

established and altered more quickly than legislation. It may therefore be preferable in markets that are

changing rapidly. On the other hand, self-regulation techniques require a high degree of trust between

government and stakeholders (as well as among the stakeholders). The consensus amongst the various

players on the contents and the monitoring of enforcement is crucial for the success of self-regulatory

regimes. In addition, self-regulation needs to be an open and transparent process as it may provide an

opportunity for collusive arrangements amongst rivals (cartel). In that case, an unintended consequence of

self-regulation might be reduced competition.

• Better enforcement and implementation: This option should always be considered where legislation is

already in place, for instance through improved implementation or inspection guidance.

• De-regulation and simplification: It is often forgotten that one regulatory policy option is streamlining the

stock of existing domestic regulation, at various levels of government.

• Information, education, capacity-building campaigns (sponsored by public authorities): Especially if they

exploit the self-interest of the target audience, educational instruments may effectively improve compliance

and management practices. The government can also “nudge” the targeted group by educating and releasing

information on the consequences of unchanged behavior. Apparently small alterations of the information

set available to individuals may have large consequences for regulatory results.

• Economic and market-based mechanisms: Property rights, creation of new markets, liability provisions, etc.

– all these instruments may influence the behavior of market players by providing (negative/positive)

monetary incentives or by guaranteeing some basic rules of the game. Taxes, charges and fees are potentially

useful policy instrument to influence private behavior towards public objectives. They provide flexibility and

cost-effectiveness and can be used to ensure that users pay the social price of their production or

consumption.

Step 9: How to identify the options

Policy options must be demonstrably linked both to the causes of the problem and to the objectives.

For each option, you should define the appropriate level of ambition in the light of constraints such as

compliance costs or considerations of proportionality. There is also a need to identify appropriate

policy instruments (legal acts of Romanian Government, legal acts of EU, self-regulation, co-regulation

and economic incentives). These instruments can be combined, if necessary in a package, and/or

coordinated with EU action.

NOTE that an option may be differentiated on the basis of the content of the intervention (substantial

changes), or the type of the intervention (form of instrument chosen).

A guiding tool in the identification of the options is the principle of proportionality: Any Government

action should not go beyond what is necessary to achieve satisfactorily the objectives which have been

set. Accordingly, government action should be as simple as possible and leave as much scope for sub-

national or private intervention as possible (subsidiarity principle).

Strive to be proportionate

The following questions should be used to examine the proportionality of the options proposed in a SN. They

are not designed to be answered on a yes/no basis but rather should be explained and supported with qualitative

and quantitative evidence14 where possible. Examining the proportionality of a range of options will help you to

establish a shortlist of feasible options to be analyzed in depth.

In relation to the content of the option:

• Does the option go beyond what is necessary to achieve the objective satisfactorily?

• Is the scope of action limited to those aspects that actors other than Government cannot achieve

satisfactorily on their own, and where Government can do better? (boundary test)

• If the initiative creates negative impacts, are such costs minimized and commensurate with the objective(s)

to be achieved?

• Will Government action leave as much scope for national decision as possible while achieving satisfactorily

the objectives set?

• Is the option in accordance with established international, EU and domestic legal provisions?

In relation to the type of the option:

• Is the choice of instrument as simple as possible, and coherent with satisfactory achievement of the objective

and effective enforcement?

• Is there a solid justification for the choice of instrument?

Remember that a good way to make the process of identifying options more systematic is to use the

“problem tree approach” developed in Step 6. Just as a problem might have many drivers or causes,

many solutions might be needed to resolve it effectively.

14 The quantification exercise should highlight the underlying assumptions and discuss the robustness of any model used.

Section 4. Impact identification and assessment


Policy interventions may have impacts on the economy, on society, and on the environment.

Any policy intervention produces both benefits and costs.

The identification and estimation of the impacts is not as difficult as it seems. You must proceed step

by step, examining the likely results of each option, and identifying those results as negative (costs)

or positive (benefits). You will start by describing them qualitatively, and then quantifying the most

important impacts.

What constitutes an impact?

In the following steps of this Section, you are asked to provide information on the types, likelihood

and evidence of the magnitude of the impacts that the Government intervention is likely to produce.

This serves as the basis for comparing them both against one other and against the baseline scenario

developed in Step 7 above.

The benefits of government action

The benefits are the reasons for government action. Without clear benefits, the government should

not act. Benefits of government action are any major positive outcome of the action, whether the

outcome directly intended (as stated in the goals) or a secondary outcome that is also beneficial.

Benefits can take a variety of economic, social, and environmental forms. Common kinds of benefits

presented in a SN include:15

• Benefits to consumers: a reduction in pain and suffering; increased access to information;

lower prices; improved safety of products, workplaces, services etc.;

• Benefits to business: reduction in plant or property damage; a reduction in lost

production time; reduced compliance costs; less anti-competitive behavior in the market

or greater regulatory transparency, certainty and predictability;

• Benefits to government: streamlined regulatory processes and requirements; reduced

monitoring and enforcement costs; higher levels of compliance; and

• Benefits to the community: improved environmental outcomes; safer workplaces;

greater access to services or opportunities; more economical use of resources and higher

economic growth; and an increase in the standard of living and quality of life.

Whenever possible, and especially for economic benefits, benefits should be stated in monetized

terms, such as RON/year. Potential social and environmental benefits may be more easily stated in a

standard metric (a metric is simply a way to measure the benefits) so that options can be compared.

If you only make general statements, such as “better safety and health” or “safer roads,” it will be

impossible to know which option provides more protection. By contrast, try to use metrics such as

number (or percentage) lives saved; of mortal accidents prevented; of elderly people rescued from

poverty; etc.

15 Adapted from the Australian Government’s Guide for regulation (1998).

Economic benefits for which a value is provided in the market are undemanding to monetize. An

example could come from adding more wind turbines into the energy market. The market benefits

are known because it is known both the physical quantity of energy that the extra turbines would

provide (i.e. kWh) and the monetary value of the physical quantity (i.e. €/kWh).

The most controversial category of benefits consists of non-economic benefits which are not valued

in the market that can be quantified and monetized. An example of this is reducing health risks. There

is no market value for this and neither for saving lives, but the monetary value of the benefit can be

seen as a reduction in the risk of dying or catching a disease. Economists have developed the following

four main methods for monetizing non-market values associated with reductions in risk.

Willingness to pay (or contingent valuation) techniques ask citizens how much they would pay to reduce the likelihood of a specific risk. In practice this is implemented through (i) stated preference surveys, where individuals are asked questions on changes in benefits; (ii) close-ended survey, where respondents are asked whether or not they would be willing to pay a particular amount for reducing risk; and (iii) stochastic payment cards, which offers to respondents a list of prices and associates likelihood matrix describing how likely the respondent would agree to pay the various offered prices.

The human capital approach calculates the value of a human life saved assessing the present value of the worker’s earnings over the lifetime. The value is the benefit associated with reducing loss wages.

The cost of illness (or medical costs assessment) method consists of an estimate of the costs to the medical system for treatment due to illness.

Willingness to accept values are based on the wage premiums workers accept for risks. When the wage premium is divided by fatality risk, the result is the value of a statistical life saved.

Examples for the non-economic benefits that can be quantified but not monetised include the number

of fish species saved from extinction. CBA is anthropocentric and impacts on other animal species are

rarely taken into account in monetary terms as part of a policy appraisal, unless this refers specifically

to ecological conservation and animal species protection.

The category of benefits which cannot be quantified and let alone monetized in a CBA is typically very

broad as it comprises several areas of social benefits. An example is the benefit of improving social

justice thanks to a new policy or regulatory change. There might be social indicators which address

some of this change, but this is hardly reconciled to a monetary value.

Example on how to assess benefits with Willingness to Pay method – Freshwaters

Freshwaters pollution is expected to generate a risk of premature death of 1 in 1,000. There are 200 people

subject to this risk and each is willing to pay an average of €100 to reduce this risk of premature death to zero.

Aggregate willingness to pay to avoid this risk is €100 * 200. The benefit of preventing fatality is €20,000

The costs of government action

Costs are any negative consequence of action or non-action. It is not acceptable to state that

Government intervention has benefits, but no costs. Every government policy choice imposes various

typologies of costs. Private companies, citizens and public administration can be subject to an increase

in costs. The first significant classification is with regards to private and societal costs.

Private costs consist of what a citizen or household has to pay in relation to a legislative change. CBA is often used by public administrations as an instrument to measure only certain components of private costs. This is particularly the case when legislative change is expected to have impacts on individual categories of companies.

Social costs represent what society as a whole has to pay because of legislative change. They typically include negative externalities and exclude transfer costs among groups of citizens (or companies).

The figure below outlines the typologies of costs associated with government interventions. Costs for

public administration mean management costs as well as enforcement costs, i.e. costs associated with

monitoring and inspections to ensure compliance. On the right of the figure private costs are divided

between costs private citizens and private companies. The latter are broken down in terms of direct

financial costs, administrative costs, capital costs and efficiency costs.

Scheme of costs imposed by government intervention

In particular, we can define the various types of costs as follows:

Direct financial costs: any form of direct taxation associated with new regulation

Administrative costs: time and resources spent to comply with the paperwork because of the new regulation

Capital costs: capital value of goods purchased in order to comply with the new regulation

Efficiency costs: indirect costs associated with innovation loss, resources and time not spent on primary economic activities

Example of regulatory costs – Freshwaters

One of the policy options for reducing industrial waste involves a mandatory water treatment system for

factories operating in proximity of freshwaters. The table below presents cost estimates for this policy option.

Costs imposed by government

intervention

Public administration (developing,

managing and enforcing the

intervention’s requirements)

Private sector (complying with

the intervention)

Private companies Private citizens

Direct financial

costs

Administrative costs

Capital costs Efficiency costs

Costs of mandatory water treatment system

In this example, administrative costs could be derived from previous administrative cost studies of the sector,

capital costs from available market prices, direct financial costs from Ministry of Finance data and efficiency

costs from interviews/engagement with stakeholders.

Step 10: Economic impacts

Determining direct compliance impacts

SNs typically consider direct compliance costs to businesses and citizens. Direct compliance impacts

refer to the sum of all changes associated to compliance process by businesses. Compliance costs are

the costs that are incurred by businesses or other parties at whom regulation may be targeted in

undertaking actions necessary to comply with the regulatory requirements, as well as the costs to

government of regulatory administration and enforcement.

To calculate them:

estimate cost per each component;

calculate total compliance costs per business;

estimate number of business affected; and

multiply to get the grand total.

How to estimate the number of affected firms

Potential sources include:

government statistical collections;

industry associations;

academic research;

information from other government departments (e.g. where other existing regulations affect a similar group);

licensing or registration data;

information from regulators in other, comparable jurisdictions;

insurance claims data; and

surveys of potentially affected industry sectors (either existing survey-based data or the results of surveys undertaken as part of the compliance cost assessment process).

In identifying impacts, you should keep the following points in mind:

• think both short-term and long-term – it is often easier to identify short-term impacts;

• make efforts to assess impacts that cannot readily be expressed in quantitative or

monetary terms;

• recognize that various factors producing the impacts also interact with one another;

• remember that the impacts of the proposal may be affected by the implementation of

other initiatives, particularly if the proposal is part of a ‘package’; and

• assess impacts in context of Romania’s Treaty obligations and the EU's overall policy goals,

e.g. respect for Fundamental Rights, promoting sustainable development, achieving the

goals of the Europe2020 Strategy,, etc.

Annex 1 to these Guidelines provides a list of possible economic, social and environmental impacts

which helps you consider impacts systematically.

The Australian Government issued an online Business Cost Calculator, which can be accessed at

http://www.dpmc.gov.au/deregulation/obpr/bcc/index.cfm. This is an example of how you can

develop your calculations. It is not necessarily recommended that you use it for your current SN.

How to determine unknown figures

What if I do not possess readily available data? A number of strategies allow you to get or extrapolate

measurement indicators for your impacts. They include:

Using reference sources

• Check the details of how the numbers were derived. Various sources may use different

operational definitions.

• Use multiple sources, but ensure that your valuations are consistent.

• Avoid, if you can, sources that don’t offer operational definitions.

Using surveys

• Survey systematically interested parties.

• If there is not enough time / resources to conduct an ad hoc survey, look for national /

local surveys done on a regular basis by well-known organizations (research centers,

leading newspapers …).

Guessing

• Use rates that do not vary much from place to place to guess an absolute number (to

guess the number of deaths, multiply death rates by a population – instead of compiling

actual figures from population registries).

• Look if there are widely accepted rules of thumb.

• Use rates characterizing similar phenomena.

• Use a known variable to guess another when a relationship between the two is known

(population growth as a function of time and previous growth rates).

• Set boundaries by reference to another variable (the maximum number of children using

diapers cannot be larger than the population between the age of birth to four years).

• Employ triangulation, i.e. using several separate approaches / data sources to estimate a

quantity and comparing the results.

Using experts

• Verify the credentials of the experts.

• Use methods for pooling their estimates and lowering their estimate margin of error (see

Delphi method).

NOTE that you should refer to PART 2 of these Guidelines to deploy the most appropriate methods

for data collection.

Measuring administrative burdens

EU conditionalities require you to provide details of the information obligations for businesses that

are likely to be added or eliminated if the option were to be implemented. These kinds of costs are

quantified because there is an accepted European strategy to reduce them. Administrative burdens

(AB) are the costs of complying with information obligations stemming from government regulation.

Examples of such obligations include:

gathering information;

processing information;

submitting and filing reports;

external control by accountants;

general meetings.

For policy options that entail new information obligations, you should indicate in the SN how this

information contributes to the effectiveness of the option in achieving the objectives. You should

always consider alternative options that do not lead to additional information obligations. It is

important that the analysis of the impacts clarifies the trade-offs between information obligations and

the principal objectives of the proposal.

The Standard Cost Model (SCM) is the most common formula to express administrative burdens in

monetary terms. The SCM multiplies the costs of the activities that have to be carried out to meet

information obligations (Price “P”) by the number of activities per year (Quantity “Q”):

• The costs of activities are calculated by multiplying the time spent by a tariff. The latter can be an internal tariff or the hourly cost for external service providers and time.

• The yearly number of activities is calculated by multiplying the frequency by the population.

The sum of all administrative costs of all activities (Σ P*Q) are the total administrative costs of a

regulation (see the figure below).

The Standard Cost Model formula

∑ ( Time x Tarif ) x ( Frequency x Population )

Price “P” Cost of administrative

activities

Quantity “Q” Number of activities

per year

Note that more information on the AB measurement and SCM calculations is included in the manual

issued by the Government Secretariat General (GSG) in 2010.16

Measuring administrative burdens: An example

If the option would increase the required frequency of reporting to a government agency from quarterly to

monthly, the base case incorporates the cost of the currently required quarterly reporting. Thus, the incremental

cost is that of preparing and lodging an additional 8 reports annually, rather than the total cost of the 12 reports

required.

Thus, if 1 000 firms are affected and the cost per report averages RON 1,500:

Base case costing: RON 1,500 x 1,000 x 4 reports = RON 600,000 per annum

Cost of compliance with new requirement. RON 1,500 x 1 000 x 12 reports = RON 1,800,000 per annum

Incremental cost of the option. RON 1,800,000 – RON 600,000 = RON 1,200,000 per annum.

Thus, the compliance cost assessment should report that the incremental cost of the specific option is equal to

RON 1,200,000 per annum

Step 11: Budgetary and financial impacts


Are public authorities actually involved in or affected by the implementation of the option? This Step

refers to the impacts on the general consolidated budget, both on the short term, for the current year,

and on the long term (5 years).

Assessing the budgetary impacts of regulation is an essential part of preparing draft regulation.

Without a proper assessment, it will not be possible to allocate the necessary funds to implement a

proposal. A proposal might also lead to increased revenue for the public sector, but without a proper

assessment of the revenue that can be expected, Government will not be able to use the collected

revenue for other intended purposes.

Types of financial impacts and Ministry of the Finance template

The Ministry of Public Finance requires information on the following indicators:

In thousands of LEI

Indicators Current

year Next 4 years

5 year average

1 2 3 4 5 6 7

1. Changes of the budget incomes, plus/minus, of which:

a) state budget, of which:

(i) tax on profit

(ii) tax on income

16 Berenschot Business Development Group (2010), Standard Cost Model Manual, Romanian Manual for measuring administrative costs for business, available online at: http://www.sgg.ro/docs/File/UPP/doc/20100617-manual-en.pdf (last access: 03.07.2014).

b) local budgets:

(i) tax on profit

c) state social security budget:

(i) social security contributions

2. Changes of the budget expenses, plus/minus, of which:

a) state budget, of which:

(i) personnel expenses

(ii) goods and services

b) local budgets:



c) state social security budget:



3. Financial impact, plus/minus, of which:

a) state budget

b) local budgets

4. Proposals for covering the increased budget expenses

5. Proposals for compensating the decreased budget incomes

6. Detailed calculations on substantiation of changes in the budget incomes and/or expenses

7. Other information

How to calculate budgetary impacts

Assessing budgetary impacts can be done in many different ways and detailed guidelines on how to

conduct such impact assessments are issued by Governments around the world.

These Guidelines commonly distinguish between three types of public expenditures that need to be

assessed:

Consumption of goods and services for current use.

Investments to create future benefits, e.g. roads, harbours, power lines, and data communication.

Transfer payments, e.g. social security payments.

Assessing these impacts is essentially a three-step process. The first step involves assessing whether

the proposal will have an impact on the public budget. This can be due to:

Changes in salaries for public employees.

Need for the public sector to purchase goods or services.

New infrastructure requirements.

Changes in transfer payments to citizens (e.g. disability compensations).

Public savings due to streamlining of administrative procedures.

Changes in revenue from taxes and tariffs.

Revenue due to sale of public property.

If a proposal does not have any impact on public expenditure, it is described in the SN that

accompanies the proposal, why it does not have any impact.

During the second step, a clearer understanding of the impacts that were identified during the first

step is obtained. Are the impacts a direct consequence of the regulation, or are they an indirect effect

of changes that the regulation brings about? It should also be assessed, whether the impacts occur

when the regulation is implemented (i.e. short-term impacts) or will occur over a longer period (i.e.

long-term impacts).

The third step involves describing and assessing the impacts more in detail. The assessment is based

on the current as-is situation, and impacts are quantified on an annual basis for the next 3-5 years,

depending on the long-term impacts of the proposal. Trusted data sources are used, and relevant

behavioural changes are included in the calculation. Finally, the overall results are communicated in

an easily comprehendible language with an accompanying table that summarises the budgetary

impacts.

A few examples

Brief examples of how this can be done are given below. These are excerpts of regulatory impact

assessments that typically also include assessments of impacts on businesses, consumers,

environment and other relevant impacts.

Example 1: Australian Clean Energy Finance Corporation17

The purpose of the Clean Energy Finance Corporation (Abolition) Bill 2014 is to abolish the Clean Energy Finance

Corporation (CEFC). The Bill contains arrangements to ensure the orderly administration of investments and

transfer of the existing contractual assets and liabilities of the CEFC to the Commonwealth to hold and manage.

Financial impact: Based on advice from the CEFC, the financial impact of abolishing the CEFC has the following

fiscal balance and underlying cash balance implications over the forward estimates ($millions):

These estimates do not make any allowance for the costs of shutting down the CEFC, such as employee

redundancies and contract termination costs, which if included would increase the financial impact over the

forward estimates. The estimates also do not include the impact of lower public debt interest costs from ceasing

17 Source: http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5288_ems_a694eee1-e8fe-42b2-b53d-87a855a5a76d/upload_pdf/395679.pdf;fileType=application%2Fpdf#search=%22legislation/ems/r5288_ems_a694eee1-e8fe-42b2-b53d-87a855a5a76d%22.

further contributions from the Government to the CEFC, nor allowances for bad and doubtful debts, which if

included would reduce the financial impact over the forward estimates.

Example 2: Danish law on limiting transfer payments18

People who are no longer entitled to unemployment benefits are instead eligible for a traineeship in a company

or with the municipality at a lower benefit rate (low-income payment). It is compulsory for municipalities to

offer this scheme to eligible people. Only people above 30 years of age are eligible and they will be given up to

80 pct. of unemployment benefits.

The proposal is estimated to affect 3,150 people on an annual basis. It will lead to an increase in transfer

payments by the public sector, as these people are transferred from privately funded unemployment benefits

to publicly funded low-income payments, which are paid partly by central government, partly by municipalities.

Municipalities are responsible for giving guidance to the affected people about the various job options, and

municipalities are partly compensated for this administrative work through the state budget.

Example 3: UK Consumer Rights Bill Suite of Reforms19

In 2013, the UK Government announced a set of proposals that would streamline key consumer rights so that

people could access what they need to know more easily and effectively, and clarify the law where it was

confusing. The proposals modernised the consumer law for the digital age, and enhance protection for

consumers where necessary. The proposals also reduce business burdens and costs, and deregulated where

appropriate.

The entire suite of Consumer Rights reforms were estimated to be worth over £4 billion to the UK economy over

10 years in quantified net benefits. These net benefits included the impact on consumers, business and the

public sector from the Bill (£1.7 billion) and its associated secondary legislation (£2.73 billion).

Specifically for the public sector, the following effects where reported:

Main quantified benefits to public sector:

18 Source: http://www.ft.dk/RIpdf/samling/20141/lovforslag/L111/20141_L111_som_fremsat.pdf.

19 Source: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225989/13-916-draft-consumer-rights-bill-governemnt-response-to-consultations-on-consumer-rights.pdf.

• Savings from fewer court cases £1.2 million per year

• Simpler complaint handling because the law is easier to understand and apply, valued at £0.6 million per year

Main quantified costs to public sector:

• Increase in costs of enforcing compliance with law £0.5 million per year

• Lost revenue from fewer court cases and fee remissions £0.2 million per year.

Step 12: Impacts on competition and on State aid


Because options may have an influence on competition, you should first ascertain whether they

include explicit liberalization provisions or measures that are likely to raise or lower the barriers that

firms face to enter or leave the market.

The Competition Council Checklist

The Romanian Competition Council provides the following checklist:

a) direct or indirect limitation of the number of providers in case the draft legislative act:

ensures a company’s exclusive right to provide a product or service;

establishes a license, a permit or an authorization as a requirement for carrying out the activity;

limits some companies’ capacity to participate in public procurements;

leads to a significant increase of the market entry or exit costs

creates a geographical barrier in relation to the companies’ capacity to provide goods or services, to invest capital or to provide workforce

b) limitation of providers’ capacity to compete in case the draft legislative act:

controls or influences, in a substantial manner, at which price a good or a service is sold;

limits the providers’ freedom to advertise their own products (beyond the limitation determined by the compliance with copyrights and by the prevention of deceptive advertising);

establishes product or service quality standards, which are significantly different from the current practices;

leads to a significant increase of the production costs of some providers in relation to the others (especially by the different treatment to be applied to operators newly-entered in the market in relation to the existent ones);

c) reduction of the degree of stimulation of providers to effectively compete in case the draft

legislative act:

establishes a self-regulation or co-regulation status;

requires or fosters the publication of information on company’s production, prices or costs;

exonerates the activity in a certain area or a group of undertakings from the application of the rules of competition;

d) limits the options and information available to clients in case the draft legislative act:

limits the clients’ options;

reduces the clients’ mobility against the providers of goods and services by explicitly or implicitly increasing the costs of changing such providers;

e) taking a state aid measure in case the draft legislative act establishes a support measure fulfilling

the following conditions:

stems from public funds, regardless of the form (either cash in banks or credits with subsidized interest, or tax exemptions, deferrals or discounts etc.) or are granted by a public institution;

is selective;

can create an economic advantage for certain undertakings;

distorts or can distort competition on the Single Market.

Step 13: Impact on small businesses (SMEs)

The SME Test is mandatory

Due to their size and scarce resources, Small and Medium-sized Enterprises (SMEs) can be affected by

the costs of regulations more than their bigger competitors. At the same time, the benefits of

regulations tend to be more evenly distributed over companies of different sizes. SMEs may have

limited scope for benefiting from economies of scale. SMEs in general find it more difficult to access

capital and as a result the cost of capital for them is often higher than for larger businesses.

The European Commission requires carrying out a dedicated assessment to ensure the effective

implementation of the EU Small Business Act and its Review (including the “Think Small First”

principle).20 The Romanian Government adopted a procedure in this regard in May 2014.21

For these reasons, you should consider performing a SME-Test.

Types of impacts on SMEs

The impacts of government interventions on SMEs may be internal. The workload when having to

report figures to public authorities, take part in inspections, or adapt to new regulatory requirements

will generally be the same for large and small companies alike. But whereas large companies can

spread these costs out on a large business operation, small companies have to spread the same costs

out on a much smaller operation.

Moreover, by their very nature SMEs have to employee staff that can perform many different tasks in

the same company. A bookkeeper working at an SME will not only be responsible for bookkeeping,

but will likely also be tasked with other administrative working, e.g. human resources, keeping track

of new regulatory requirements. Hence, SMEs generally lack specialised personal, who can deal with

increasingly complex regulatory requirements.

There may be, in addition, external costs that need to be considered. New regulation may also mean

that businesses will need to purchase new equipment, hire new types of staff or adapt their

production facilities. Hence, companies will need to make investments to be able to comply with new

20 See http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm.

21 Law 62/2014, published in the Official Gazette of Romania no.328/06.05.2014. The Methodology for the elaboration of the SME Test was adopted by Ministerial Order no.698/04.06.2014, published in the Official Gazette of Romania no.438/16.06.2014.

regulatory requirements. Often, this entails having to go to the bank and borrow money, which for

SMEs can be both more costly and difficult compared to larger companies.

What is an SME?

Company category Employees Turnover or Balance sheet total

Medium-sized < 250 ≤ 50 million € ≤ 43 million €

Small < 50 ≤ 10 million € ≤ 10 million €

Micro < 10 ≤ 2 million € ≤ 2 million €

Source: EU recommendations 2003/361

The findings from the SME test should be summarised in a brief note, which should not be more than

3-4 pages. This note is to be attached to the regulatory proposal once endorsed by GEIAN, following

the process outlined in the Ministerial Order 698 of 16 June 2014 (Romanian Official journal, PART I,

Issue 441/17.VI.2014).

The centrality of public consultation

Targeted consultation is central in the execution of the SME Test. For this reason, you should design

specific actions when conducting your consultation rounds, such as organising roundtable discussions,

focus group meetings, hearings explicitly targeting SME representatives, and running SME Panels.

The SMEs Test Department (Compartimentrul pentru Testul IMM) of the Ministry of Energy, SMEs and

the Business Environment and the GIEIAN Group may help you reach out the relevant actors.

Bear in mind that considerations on the SME dimension should inform all stages of a Substantiation

Note – from the problem definition to the identification of options and the assessment of their

impacts.

How to conduct a SME Test

There are five steps involved when conducting an SME test:

1. Are SMEs affected?

2. Measuring regulatory costs and benefits for SMEs

3. Comparing costs of SMEs with those of larger companies

4. Assessing additional impacts of a policy proposal

5. Assessing alternative options and mitigating measures if SMEs are disproportionately affected

1. Are SMEs affected?

The first step in an SME test is to assess, whether SMEs are affected by the new policy proposal, what

types of SMEs are affected, and how many are affected. This step involves assessing the following

questions:

Are businesses in general affected by the intervention? If so, the intervention will almost certainly affect SMEs as they constitute the large majority of businesses.

What types of SMEs are affected by the intervention? Is it mainly microbusinesses, is it businesses with a certain turnover etc.

How many SMEs are affected by the intervention? Is it all micro companies who are affected, or is it only micro companies within a certain sector or micro companies who engage in certain types of activities, for instance exports.

Ideally, following this step, precise knowledge should have been gathered about the types of

businesses who are affected, their numbers and the relative share of affected SMEs, for instance in

relation to

the proportion of the employment concerned in the different categories of enterprises affected;

the weight of the different kind of SMEs in the sector(s) (micro, small and medium ones);

links with other sectors and possible effect on subcontracting.

Such information can be obtained from various statistical sources. In reality however, it will often be

hard to identify the precise type of companies that are affected and their numbers. An approximation

/ extrapolation will often be a good starting point for the analyses, as this approximation can be

refined, as the analysis progresses.

2. Measuring costs and benefits for SMEs

The second step involves assessing the costs and benefits of a policy proposal for SMEs. Costs and

benefits (the latter will be the case if the intervention leads to alleviations of existing costs) are often

subdivided into primary and secondary impacts. Primary impacts are administrative, substantive and

financial costs, while secondary impacts are competition impacts and social-economic impacts –

secondary impacts are dealt with in step four below. The relationship between the two impacts and

their components is illustrated in the figure below.

Costs and benefits

Administrative impacts are costs and benefits faced by business when complying with requirements

in regulation, which stipulates that businesses have to deliver certain information to public authorities

or third parties, e.g. consumers. These requirements are also called information obligations.

Example of administrative impacts

The new law mentioned above which requires business to install a filter, also requires them to

measure, record and report emissions after the filter has been installed. Undertaking these

administrative activities leads to administrative costs for businesses.

When businesses fill in and file their annual tax return, they will make use of their own internal

resources, but often will also require the assistance of external parties, e.g. accountants. The cost of

all these internal and external administrative activities sum up to the administrative costs of filing the

annual tax return. The taxes paid, are not considered as an administrative costs, but a financial cost.

Administrative impacts can be measured in a number of ways. The most widespread methodology in

Europe is the Standard Cost Model, cf. separate guidelines on this methodology.

Substantive impacts are costs and benefits faced by business when complying with the materiel

requirements of regulation, which stipulates that businesses have to carry out or avoid certain actions

or conducts. These requirements are also called content obligations.

Example of substantive impacts

A new law will require businesses to install a filter, in order to minimize pollution. The cost of buying,

installing and maintaining this filter is a substantive cost

Regulation sets certain conditions for the standards of physical facilities at a workplace (e.g. the

amount of space per person employed, safety measures for certain types of machines etc.).

Complying with these rules carries substantive costs for businesses.

Quantifying substantive costs can be very challenging, as it is often difficult to distinguish between

substantive costs that follow directly from the new policy proposal, and substantive costs that

companies would in any event have had.

As an example, construction companies are required by law to erect scaffolds made of steel when

constructing or renovating buildings – in other words, the cost of the scaffold is a substantive costs.

However, even if the law did not require it, construction companies would likely not construct

buildings without erecting a scaffold. Moreover, they would likely also use a steel scaffold instead of

a less stable one made of wood or bamboo. Hence only the increment of requirements over and above

what normal businesses would use on its own should be treated as a regulatory burden.

Quantifying substantive costs can be done used various methodologies. One approach – which is also

relatively manageable – is to interview a number of affected SMEs about how they are affected by the

new policy proposal. This can be done either through direct one-on-one interviews or through small

focus group.

Financial impacts are the result of a concrete and direct legal obligation to transfer a sum of money

from businesses to the Government or other public authorities. These costs are therefore not related

to a need for information on the part of the Government. Such costs include administrative charges

payable when applying for a permit, retributions, taxes and tariffs. These costs should not be

quantified as part of the SME test, as they should ideally be quantified as part of the wider impact

assessment.

3. Comparing costs of SMEs with those of larger companies

The third step involves comparing the costs and benefits of SMEs with those of larger companies.

Hence, are the costs and benefits for SMEs larger or smaller compared to large companies? In this

comparison, it will also be relevant to assess whether the costs and benefits are different for various

types of SMEs, i.e. are micro businesses affected differently compared to small companies? For this

purpose, you could for instance compare the overall costs identified to the number of persons employ

to obtain the average cost per employee. Alternatively, you could compare the costs identified to the

total overhead or turn-over of the company.

4. Assessing additional impacts of a policy proposal

The fourth step involves assessing the secondary impacts of a policy proposal, i.e. impacts on

competition and social-economic impacts. These are usually difficult to quantify. You should always

described them qualitatively and seek further data and analysis through targeted consultation.

The impacts on competition can include changes in the competitive environment for SMEs, for

instance due to changes in the behaviour of competitors, suppliers or customers. A policy proposal

can also lead to new market opportunities for SMEs, for instance due to changes in barriers to entry

or changes in market structure.

The social-economic impacts of a policy proposal a potentially very wide and include elements such:

Improvements (or the opposite) in working conditions for workers employed by SMEs.

Increased (or decreased) legal certainty for SMEs.

Increased ability for SMEs to innovate.

These qualitative aspects of a policy proposal should be described as part of the SME test, as they can

improve the understanding of how the proposal will impact SMEs. They can be uncovered using the

interviews that are used to uncover substantive costs above.

5. Assessing alternative options and mitigating measures if SMEs are disproportionately affected

The fifth step involves assessing alternative options and mitigating measures if SMEs are

disproportionately affected by the policy proposal. This involves rethink the policy proposal again and

applying the various elements from the Think small first principle outlined above.

Hence, when drafting regulation, regulators should consider, whether they can introduce specific SME

provisions in legislation in order to avoid disproportionate burdens on SMEs. This could be done by

including one or more of the following elements:

Can SMEs be exempted from reporting requirements – or can the reporting frequency for them be reduced? As an example, when public authorities gather statistical information, it will often be sufficient to receive data from larger companies, as they will in any event have the greatest volume of exports, imports, emissions etc. Hence, the data received from smaller companies (especially micro companies) will typically not give any added value to the accumulated data.

Can SMEs be exempted from inspections or at least have a simplified inspection? SMEs could, for instance, be inspected less often compared to larger companies. To that end, it is important to define risk-based approaches to inspections?

Can compliance be made voluntary for SMEs? Making compliance voluntary for SMEs could be relevant in situations, where SMEs have an incentive to comply with the regulation. As an example, SMEs are often upstream sub-suppliers of parts and components that larger companies assemble and sell on the market. Hence, it will be sufficient to check larger companies compliance with product safety standards, as sub-suppliers will be required to comply with the regulation by their upstream partners.

Making compliance voluntary for the large number of SMEs also means that resources can be spend more effectively on inspecting larger companies.

Can financial costs (taxes, inspection fees, levies etc.) for SMEs be reduced, either directly through reduced charges or indirectly though reimbursements?

Can e-government solutions and one-stop shops be established to help SMEs?

Can the ‘only once’ principle be applied? New regulation often includes new obligations on companies to provide information to public authorities. Often, businesses will already have supplied the exact same – or similar – information to another part of government. Hence, instead of requiring businesses to provide the same information again, public authorities can share existing information.

Some countries (e.g. UK) apply common commencement dates for new regulation, which means that new regulation comes into force at fixed intervals, for instance once every half year. This way, businesses will know that they only need to consider new regulation at fixed intervals. There is usually a clause allowing emergency regulation to be adapted at irregular intervals.

When assessing possible mitigating measures for SMEs, you should include the costs that these could

produce in your final assessment. While the Think first small principle has a number of benefits, it is

also important to remember that creating favourable regulatory conditions for SMEs can create the

wrong incentives. Hence, if companies are “penalized” for growing it might create incentives for them

to stay small. One example could be exempting micro-businesses with less than 10 employees from

certain reporting requirements related to their employees, e.g. reporting statistical information on

wages, having certain facilities available for employees (changing rooms) etc. If the reporting

requirements that kick-in when the 10th employee is hired are seen as too onerous, it might create

disincentives for companies to grow.

Further guidance

For further guidance and examples, please consider the European Commission SME Test toolbox

(“Tool #19) at http://ec.europa.eu/smart-regulation/guidelines/toc_tool_en.htm.

Step 14: Social and health impacts


Social impacts include all consequences to human populations, either restricted or taken as a whole.

They relate to situations at work; in the education and culture; health; and living in general.

Assessing social impacts correctly is a precondition to ensure effectiveness and efficiency when

striving to achieve many policy goals. However, it is also important to facilitate a smooth

implementation of the preferred option, for instance by prevent or mitigate resistances by specific

groups. Moreover, in the majority of cases, the costs of rectifying adverse social and health impacts

are borne by the public sector, so there is a strong incentive to get it right from the outset.

Determining social and health impacts

The related table in Annex 1 to these Guidelines lists a number of possible social and health impacts

that you should consider at this stage.

These Guidelines draw your attention specifically to three categories that are likely to be among the

most relevant for your analysis:

• Distributional impacts: When addressing different social and economic groups, you need to identify “winners and losers”. You need also to consider any impact on vulnerable groups (e.g. Roma minorities) that the option is likely to trigger. Government action may leave existing inequalities unchanged, aggravate them, or help to reduce them.

For instance, you need to envisage specific supporting action for elderly people as a result of measures introduced to foster electronic access to public services.

This is not a simple matter: for example, differences between male and female lifestyles (e.g. in nutrition habits) may mean that a proposal which appears at first sight to be neutral as regards gender equality will in practice have different impacts on men and women.

Geographical considerations are also relevant in this context – for example with regard to mountain or remote rural areas.

• Health impacts: Often used metrics to express health impacts quantitatively relies on typical indicators such as: Healthy life expectancy at birth Proportion of population that is disabled or suffers from a given health problem Occupational morbidity In other cases, you may follow the so-called “cost-of-illness approach”. It refers to an estimate of the costs associated to accessing medical treatment – for instance cost of a using a bed for a full day multiplied by the number of hospitalization days.

Reference To Health Impact Assessment: NOTE that more information on the elaboration of health impact

assessment is included in a dedicated manual issued by the Government Secretariat General (GSG) in 2009.22

Step 15: Environmental impacts


Environmental impact assessment is necessary because many economic activities do have

repercussions on the quality of the air, soil and waters, as well as on the flora and fauna. As a SN

drafter, you can be in the following two situations:

• your initiative is primarily conceived to manage, mitigate or avoid an environmental risk or damage – In this case, your task is to mainly seek to ascertain the type and magnitude of possible environmental benefits from any given option. Alternatively,

• your initiative is not directly triggered by an explicit environmental policy objective – In this case, your task is to identify and assess any possible environmental costs associated to the options you are considering to achieve the set policy objective(s).

Determining environmental impacts

The related table in Annex 1 to these Guidelines list a number of possible environmental impacts that

you should consider at this stage. Broadly speaking, environmental impacts fall under the following

categories:

climate

transport / energy

air / waters / soil quality and resources

22 Romanian version: “Manual şi metodologie pentru studii de impact în domeniul sănătăţii”, accessible online at: http://www.sgg.ro/docs/File/UPP/doc/manual-metodologie-pentru-studii-de-impact-in-domeniul-sanatatii.pdf (last access: 03.07.2014).

bio-diversity

land use

renewable resources

waste production / management / recycling

animal welfare

international env. impacts

As specified above, it is important that you express them AS CLEARLY AS POSSIBLE, possibly with

quantified metrics or in monetized terms. This is essential if you want to COMPARE options on an

objective basis.

NOTE that environmental impacts are generally easier to quantify than you might initially think.

Examples of metrics are:

tons of CO2 emitted (or number of estimated trucks on a given road);

concentration of substance XY in the water;

value of human live saved; or

size of population exposed to a given harm.

Moreover, some costs associated to environmental interventions are usually direct compliance costs (e.g. number and costs of filters or other equipment to apply to factories; reporting costs, etc.).

Refer to international experiences and studies if you have difficulties in identify the appropriate way

to express environmental impacts.

Taking account of time: Discounting

Benefits and costs that occur in the future are not worth as much as if they occur now. Time is a factor

affecting the overall magnitude (value) of impacts, for two reasons:

Money grows over time (benefits and costs will be relatively cheaper due to higher societal wealth); and

People are impatient (pure time preference).

Accordingly, impacts need to be “discounted”. Discounting is the process by which the future value of

costs and benefits is reduced to its present value.

The Net Present Value (NPV) is the sum of the present values of the net benefits (benefits minus costs)

in each period from the year 0 to the year T as follows:

𝑁𝑃𝑉 = ∑𝐵𝑡−𝐶𝑡

(1+𝑟)𝑡𝑇𝑡=0 =

where Ct are the costs, Bt are the benefits, t the time of the net benefits and r is the discount rate. The

Ministry of Finance has set r = 5% as the default standard discount rate.

The NPV calculates how much a future stream of net benefit is worth. A highly (positive) NPV

corresponds to a highly positive economic impact of the policy option.

T

TT

r

CB

r

CB

r

CBCB

)1(

)(...

)1(

)(

)1(

)()(

2

221100

Example on freshwaters - Net Present Value

The table below presents the difference between benefits and costs the mandatory water treatment system

and the present value, assuming that this will have a duration of 10 years. For instance, for year 2 the Present

Value is estimated as:

=

Costs, benefits, net benefits and present values of mandatory water treatment system option

Costs

Benefit

Net Benefit

Present Value

Year (end) Costs Benefit Net Benefit Present Value

0 -100,000 0 -100,000 -100,000

1 -5,000 20,000 15,000 14,493

2 -5,000 20,000 15,000 14,003

3 -5,000 20,000 15,000 13,529

4 -5,000 20,000 15,000 13,072

5 -5,000 20,000 15,000 12,630

6 -5,000 20,000 15,000 12,203

7 -5,000 20,000 15,000 11,790

8 -5,000 20,000 15,000 11,391

9 -5,000 20,000 15,000 11,006

10 -5,000 20,000 15,000 10,634

NPV (sum of

present values) 24,749

The Net Present value consists of the sum of all Present Values (=24,749). This will be compared with the Net

Present Value of other policy options. The option with the highest Net Present Value is the most significant from

an economic perspective.

Step 16: Implementation arrangements


Implementation of Government decisions may require substantial changes, the occurrence of which

SN readers must be aware of. The costs associated to implementation arrangements must be

calculated and taken into consideration when gauging the cost-effectiveness of an option. (As an

elementary example, think of nuclear radioactive waste disposal. An environmentally friendly solution

would be to store the waste on the moon – but the implementation costs clearly outweigh the

benefits.)

Implementation arrangements to be considered

One of the primary areas of attention concerns the changes that are likely to occur in the public sector.

Accordingly, you should indicate (each time by referring to the central and/or the local level):

possibilities of obtaining the desired outcome by using the existent public institutions (if that is not possible, the reasons shall be specified);

2

22

)1(

)(

r

CB

14003

)035.01(

)500020000(2

functions of the existent institutions to be changed (extended or down-sized) or transferred (and to whom);

public institutions to be established, re-organized or terminated as a consequence of the implementation of the option;

the nature of the funding associated to these changes, specifying where the funds stem from (e.g. national ordinary budget, extraordinary funds; EU

funds, international donors aid, on a fee-for-service basis; etc.); and what the funds will cover (e.g. re-location plans, capacity-building or early retirement

programs for affected civil servants, etc.).

Important implementation arrangements may affect the private sector, too. These may require

specific financial assistance also from public entities.

You must also indicate an implementation calendar – i.e. whether the implementation of the

Government decision can take place immediately after adoption or whether an additional period and

a transition period is granted for implementation.

Section 5. Option selection

Comparing the options


By quantifying as much as possible the impacts that you identified for each policy option, you have

already gone a long way in the process of policy formulation. You now have to determine the best

course of action. You can do so after you have answered a number of questions, of which the most

important are:

what have I been asked to come out with? – This refers to the nature of the policy

objective. The selection of the most appropriate methodology depends to a large extent

by the room of manoeuvre left by the mandate you received.

what data can I rely on? – This refers to the data environment. It is important to

acknowledge any data gaps related to your impact assessment (e.g. if some impacts

cannot be quantified or monetized).

In order to choose among your options, you need to make sure that you have comparable elements

for each of them. There are several possible methodologies that may be deployed in the comparison.

Choosing the appropriate methodology is key, as they are not equivalent and always fit for purpose.

These Guidelines point you to the three most common ones:

Use Cost-Benefit Analysis, if you can quantify both benefits and costs. A policy proposal

can be deemed to be worthwhile if benefits exceed or at least justify the costs;

Use Cost-Effectiveness Analysis, if you have quantified costs and you can assume that the

options you are comparing are likely to yield equivalent levels of (qualitative) benefits; or

Use Multi-Criteria Analysis, in case you have only qualitative assessments of the impacts

of our options or you have mixed data information – for instance (partly) quantitative

costs but qualitative benefits.

If no option appears to be preferable, you should specify this in your SN report. You will need to explain

why you are not in a position to draw clear conclusions and present the existing trade-offs. This in

itself constitutes a valuable input to decision-making.

Cost-Benefit Analysis

In principle, you should always try to apply the Cost-Benefit Analysis (CBA). CBA results from the

difference between the total benefits and the total costs:

CBA = Benefits – Costs

It is a very valuable technique, since it accounts for all (negative and positive) effects of policy

measures; and it allows for clearly ranking the options, since you obtain net social gains (or losses).

CBA is therefore quite comprehensive, and is likely to be very useful when the purpose of your RIA is

to provide indications on how to address possible open scenarios and trade-offs.

You should nonetheless bear in mind its drawbacks: it can be applied only to impacts that are

quantified and expressed with the same metrics (hence, the best would be monetary values – which,

as we have seen, it may sometimes be difficult to draw); and it needs to be supplemented by additional

analysis to cover distributional issues.

A full CBA procedure is based on the following steps:

1. analysing the types of stakeholders, and sectors, which are going to be affected by

individual options or a policy mix;

2. quantifying those who are affected - how many firms, how many sectors, how many

patients, etc.;

3. identifying the costs and benefits for each category of actors

4. quantifying / monetising the costs and benefits;

5. identifying a cash flow of costs and benefits across time, applying standard discounting,

and calculating the net present value of different options;

6. adding up all the expected benefits and costs, and calculating the net benefits (= the value

of the policy option in terms of cost-benefit analysis); and, possibly,

7. indicating which margins of error or uncertainty need to be taken into account.

The full CBA may be quite time intensive and demanding. You should apply this procedure in a

proportionate manner, depending on timing, resources and data availability. Nonetheless, you should

always indicate where you make assumptions and what these are, and explain why you deviated from

the full CBA procedure.

Cost-Effectiveness Analysis

Cost-Effectiveness Analysis (CEA), by contrast, may prove simpler. It reflects a very specific need:

maximizing the efficiency of a policy option, given a stated policy objective or target, or an exogenous

constraint (such as budget limits). Accordingly, this technique focuses on the cost side of the equation.

CEA is given by the formula

CEA = Cost / Effects

A CEA relates the effects of an intervention to the total cost of producing those effects. The criterion

for judgement is usually the cost per unit of outcome achieved (for example, the cost per job created

or per civil servant trained). This unit cost is then compared to other options for delivering the same

outcome. Whether or not a policy proposal is cost-effective depends on whether it outperforms other

competing proposals in reaching given objectives for less cost.

The CEA does not require an exact benefit measurement or estimation, but it bears some

disadvantages. First, it does not address the issue of the minimal or optimal level of benefits. Second,

it tends to neglect possible side-effects since it concentrates on a single type of benefit (the intended

policy objective). Third, it provides no clear result as to whether a regulatory proposal would provide

net gains to society.

You should perform CEA as follows:

1. present a broad estimate of the cost of the proposed option;

2. show that the objectives justify the cost (bearing in mind that ultimately this is a political

judgment);

3. investigate if the same results could be achieved at less cost by using a different approach

or other instruments, or if more or better results could be achieved with the same cost by

using a different approach or other instruments;

4. present the most cost-effective options.

As a sub-technique of CEA you may consider the so-called Least Cost Analysis, which considers the

option presenting the overall lowest cost to reach a fixed goal.

Choosing between CBA and CEA

The Table below illustrates the two criteria mentioned above (policy objective and data environment,

respectively), applied to the two most commonly used methodologies: CBA and CEA. The table

suggests which of the two to use, given the conditions at hand.

Using CBA or CEA?

Methodology Policy objective Data environment

Cost-Benefit Analysis uncertain

broadly defined

possible scenarios still open

costs and benefits both quantifiable

trade-offs

Cost-Effectiveness Analysis fixed (e.g. conform to legal requirement; budget constraints)

benefits difficult to calculate

benefits not relevant

Multi-Criteria Analysis

Multi-Criteria Analysis (MCA) is based on a performance or pay-off matrix in which the performance

of options are measured against different criteria. MCA may be an effective technique since it allows

applying cost benefit thinking to cases where there is a need to present impacts that are a mixture of

qualitative, quantitative and monetary data, and where there are varying degrees of certainty.

As an example, consider a general objective set by the government of enhancing the waste

management policy of a municipality.23 The following options were identified:

Option 1: To extend the waste collection services to all villages in the municipality. The

capital costs are estimated at RON 45 million, and the operational costs are considered to

be “high”.

Option 2: To clean up all small illegal dumpsites. The capital costs are estimated at RON

300 million, while the operational costs are considered to be “very low”.

If the benefits from each option are difficult to differentiate and to capture in quantitative terms, and

because only one type of costs (the capital costs) are monetized while and operational costs are

expressed only in qualitative terms, applying the MCA approach may help prioritise the two potions.

In order to do so, it is first necessary to identify and weight “prioritization criteria”. A criterion is useful

when it can allow the evaluation of an option.

Once you have identified the most appropriate criteria, you need to weight them, since not all criteria

are equally important. Some are more relevant or urgent than others, depending on the public values

and expectation of the local stakeholders and the larger national or regional strategies.

In our example, health benefits may for instance, be most important for communities affected by

groundwater contamination, dust, noise, vermin, and odour from an adjacent landfill, whereas costs

may be most important for more remote communities that are not directly affected by adverse health

and environmental conditions.

Normally, the selection and weighting of the criteria should be discussed and agreed with the

stakeholder and experts, for instance through a focus group (see below).

Ensuring high objectivity and transparency in the prioritization process

You should be aware that setting priorities is a complex and controversial process. Citizens tend to see different

priorities, depending on the extent to which they are exposed to a problem. Also experts have “biases”, for

instance because of the professional background. In our example (waste management), water specialists tend

to favour water projects, nature conservationists favour nature conservation projects, local economists favour

projects offering the best value for money, etc. Moreover, political lobbying often finds its way to influence the

selection of priorities. Also, hidden personal agendas for economic gain may influence the selection of priorities.

You should also note that the legitimacy of the prioritization exercise strongly depends on how the selection and

weighting of the criteria is perceived. Your internal prioritization may well be sound and objective, but it might

not trigger the necessary sense of ownership by the external actors that is fundamental element to address

value judgments.

Hence there is a need to set up a multidisciplinary group to compensate for individual biases. And remember: it

is easier to have an independent group of experts than a group of independent experts!

An important step is how to allocate weighting and setting the scoring system. A simple technique to

determine the importance of prioritization criteria is illustrated in the Box below.

23 The example is adapted from the World Bank Guidebook Practical Guidebook on Strategic Planning in

Municipal Waste Management, written by Darious Kobus in 2003.

MCA Step Two: Ranking criteria through the “weighting” system

You can determine the relative importance of each criteria by ask the stakeholders to each tick only once the

criteria they find most useful. A good practice is to ask to tick about 60 per cent of the available criteria. For

example, if you have a list of 15 criteria, allow for nine choices per participant. Next,

exclude from the list those criteria that were given no dots, and

divide each criterion by the criterion with the lowest score, so that this one receives a weight of ‘1’.

For instance, if the lowest criterion scored five dots and the highest criterion scored 20 dots, the lowest criterion

receives weight 5/5=1, and the highest criterion receives weight 20/5=4.

You must then set the scoring system, applying quantitative values wherever possible. Such values

include financial units, physical units such as pollution reduction, number of species protected, etc.

If that is not possible, and in many cases it will not be, put qualitative values in a well-defined hierarchy

(for instance: “none” – “low” – “medium” – “high”).

An illustration of scoring setting is provided by the following Table.

MCA Step Three: Developing a scoring system

Criterion: estimated Total Costs (RON)

> 400,000,000 200 million – 400 million 8 million – 200 million < 8,000,000

Score 1 Score 2 Score 3 Score 4

Criterion: Size of beneficiary (or affected) population (% of total population)

0 – 25 % 25 – 50 % 50 – 75 % 75 – 100 %


Environmental benefits

None Low Medium High


Criterion: Social acceptability

None Low Medium High


To revert to our initial example of the waste management policy, and assuming that the weighting of

the criteria (according to the approach described above) is as indicated in following table:

Criteria Weight

estimated Total Costs 4.8

social acceptability 3.5

environmental benefits 3.0

size of beneficiary population 1.0

It is now possible to allocate scores and weights and calculate the relative ranking of the two options:

MCA Step Four: Comparing the options

Criterion Total Costs

(weight 4.8)

Environmental benefits

(weight 3.0)

Size of population

(weight 1.0)

Social acceptability

(weight 3.5)

Result

Option

Extend waste collection

(4x4.8)

19.2

(3x3.0)

9.0

(1x1.0)

1.0

(4x3.5)

14.0 43.2

Clean up all illegal dumpsites

(2x4.8)

9.6

(4x3.0)

12.0

(2x1.0)

2.0

(3x3.5)

10.5 34.1

Step 17: Presenting the options

First, the effects of each option should be summarised by area of impact, that is, overall benefits and

drawbacks, compliance cost to business and citizens and fiscal (budgetary) costs. In this summary the

impacts should not be aggregated. Include both negative and positive consequences in each category

beside each other.

• In the “Qualitative Description” column, you should include a brief summary assessment

of how the option is assessed in each category, both positively and negatively. These

qualitative points summarize the important aspects of each category of consequence. It

is useful to add the distributional effects of the option on various groups – who would be

advantaged and who would be disadvantaged by the proposed option.

• The column “Quantification” is where you would enter any quantitative information that

has been collected – the number of people in the target population or the number of

businesses affected, for example.

Step 18: Recommending the preferred option

In general, you will recommend the option that produces the most benefits at the lowest cost, and

you will not recommend any options where the costs seem disproportionate to the benefits.

Where analysis is qualitative, the judgment about which option meets this efficiency test will be partly

subjective. In this case, you should compare the options, and then explained as clearly as possible why

your preferred option seems to deliver the highest benefits at the lowest costs.

Recall that in some cases, the recommendation will not to be to adopt a single option, but to adopt a

combination or mix of options (instruments) that together address the main drivers of the problem.

Section 6. Public consultation report

Note that Part 2 of these Guidelines provides extensive information on how to organize the data

collection and public consultation processes. You should systematically draw from those insights when

planning and running consultation round and using the resulting inputs.

Step 19: Substantiation Note BEFORE consultation


Public consultation is integral part and a fundamental component of the SN process. It directly reflects

the principle of transparency, of participation and of legitimate expectations from public

administration Government action.

The consultation process provides an excellent opportunity to collect information held by non-

government sources, and at low cost. In particular, consultation serves the following functions:

bridging the information gap between the regulator and the regulated;

widening and deepening the empirical basis for decision-making;

enhancing transparency and accountability;

reducing the risk of regulatory capture, regulatory failure, and unintended consequences;

improving implementation by spotting at an early stage what can go wrong with implementation.

Refer to the public consultation legal base

Note that public consultation is a mandatory activity forming integral part of the Government decision-making

process. You must rely on the following legal bases:

• Law No. 52/2003 on transparent decision-making in public administration;

• Government Decision No. 521/2005 on the procedure for consulting the associative structures of the local

public administration authorities in the elaboration of draft legislative acts; and

• Law no.62/2011 on social dialogue.

Step 20: Substantiation Note AFTER consultation


This Step is based on the previous one and complements the information provided there with the

outcomes of the consultation as it took place. It is important for the SN reader to understand how the

channels provided for by law have been deployed to reach out stakeholders and experts, and who

actually contributed what inputs.

Section 7. Post-adoption arrangements

Step 21: Monitoring and evaluation activities

Note that you must fill this Step in the SN Template ONLY REFERRED TO THE PREFERRED OPTION

outlined in Step 18 above.


To be effective, analysis has to include specific information of compliance, enforcement, and the

responses of those who will be most likely be affected by the Government decision. Policy-makers

need to have reliable indicators to check if implementation is “on track” and the extent to which the

intervention is achieving its objectives. Information on arrangements for monitoring also allow for

understanding why the measure is failing to be effective.

Definitions

“Monitoring” is not the same thing as “evaluation”:

• Monitoring is the continuous and systematic collection of data on specified indicators to provide

management and main stakeholders of an ongoing development intervention with the indications of the

extent of progress and achievement of objectives;

• Evaluation is the periodic assessment of the relevance, performance, efficiency, and impact (both expected

and unexpected) of an intervention, in relation to the stated objectives.

A detailed outline of the monitoring and evaluation (M&E) activities is normally best designed after

the measure is formally adopted. It is obviously useless to provide detailed M&E information on policy

options that will not be implemented. In this Step you are asked to sketch the indicators because:

resources are limited and also M&E activities may be costly. It is important to compute a level of such resources (e.g. number of staff, (outsourced) research, public consultations, etc.) that is proportionate to the scope and potential impact of the proposed measure. As a general rule, collecting data should not be more costly than the value of the information they provide; and

the Government decision is part of a policy cycle and it is important to set the bricks that bridge all phases of it – from ex-ante analysis to impact evaluation – so to best prepare the basis possible future interventions.

Planning for M&E

When thinking ahead to the M&E activities, you should ask yourself the following questions:

Nature: - How will this option be measured to see if it is working? - What are the focus and purpose of M&E activities?

- To what extent do M&E structures already exist? Does new capacity need to be

put in place? Is a specific legal basis necessary?

Timing: - When should findings be produced, and used?

Data: - Is the information I need to evaluate the policy readily available? - Is there baseline information to allow for a before vs. after comparison?

- What and where are the data gaps? Can they be addressed now?

- How can I organize end-user feedback?

Actors: - Who are the key actors in providing and using such information? - What will be the roles of these actors? Who is responsible for what?

Use: - How and to whom should the M&E findings be communicated?

Developing performance indicators

Performance indicators measure the extent to which the Government decision has been properly

implemented and its objectives achieved. Another important factor in designing your indicators is the

ease with which data can be collected.

To ensure that performance indicators are properly used, they should:

be relevant, i.e. closely linked to the objectives;

be objective, easy to interpret and robust against manipulation;

be small in number and easy to monitor (data collection should be possible at low cost),

be accepted (by staff as well as stakeholders); and

have immediate impact (e.g., naming and shaming, administrative and financial sanctions).

It may be useful to distinguish between input (resources) – output – outcome (end result) – impact indicators. Possible issues covered by a monitoring system include:

implementation at various levels of government;

compliance of end-users (e.g. enterprises producing according to certain minimum standards; number of certificates issued, etc.), and their costs;

number and type of inspections, their results and their costs (enforcement costs);

number and type of sanctions / penalties;

attainment of target levels or outcomes specified in the objectives;

context / macro-economic variables;

Performance indicators: Some examples

Quantitative

• number of deaths / road accidents

• percentage of children leaving school with science qualifications / foreign language etc.

• time taken to start-up a business

• percentage of business paying their taxes on time

• change in number of construction companies complying with health and safety legislation

Qualitative

• Levels of satisfaction among citizens / business

• Perceived improvements to quality of life / ease of doing business with government

• Change in media coverage (from negative to positive coverage)

Section 8. Information on final endorsement

You are required by law to provide information on both the necessity to get formal endorsement of

the draft legislative act and to report any significant objections or comment received which were not

included in the finalization of the proposal. The relevant institutions are:

Legislative Council;

Supreme Council of National Defense;

Economic and Social Council;

Competition Council;

Court of Accounts.

Refer to the final endorsement legal base

Final endorsement is provided for by GD 561/2009.

Law No. 24/2000 on the legislative technique norms for elaboration of legislative acts, republished, and

Government Decision No. 50/2005 approving the Regulation on procedures, at Government level, for the

elaboration, endorsement and presentation of draft legislative acts for adoption, republished, as subsequently

amended.

Section 9. Accreditation

Once your SN template is finalized, it must be dated and signed off by your Minister – or a person

explicitly delegated by him / her.

An unsigned SN template is not valid.

PART 2. DATA COLLECTION AND PUBLIC CONSULTATION

How can I collect data?

Once you know which impacts the option is likely to produce, it is fundamental that you substantiate

as much as possible your arguments and reasoning. To that end, you need information and data that

is relevant and reliable. This is an essential component of any SN, both for qualitative and quantitative

assessments.

Data collection is probably the most time consuming activity in the preparation of a SN. This is

particularly the case if you have to prepare a SN Study. Your efforts should therefore be proportionate

to the importance of the initiative.

Sources of existing information

Information available at hand may include:

monitoring or evaluation reports from previous or similar programs and initiatives;

earlier analyses in your department and consultation documents;

statistical data from the National Institute of Statistics, Eurostat,24 and others;

studies and research by governmental and EU agencies;

stakeholders sources (e.g. from previous hearings, conferences, press statements);

national agencies and research institutes, as well as SINAPSE25 (for scientific evidence);

examples and experiences in other EU Member States, third countries or international organizations (e.g. World Bank, OECD).

If you are not aware of any those, you should seek support as early as possible within your

department, in the government, and from external experts.

Data collection methods

When designing the way you will collect data, you can chose among a range of methods. The options

suggested below are not exclusive, and may be applied complementarily depending on your needs.

Typical quantitative data collection methods are:

Surveys: collects primary data using a questionnaire applied on a representative sample of subjects;

Descriptive statistics: measures of central tendency: mean, median and mode measures of dispersion: standard deviation and variance measures of association: correlation and regression

Inferential statistics: go beyond data using samples and populations to test hypotheses.

24 http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

25 Scientific INformAtion for Policy Support in Europe (SINAPSE) serves as a platform for e-community and as a e-library to promote a better use of expertise in EU policy making and governance. See http://europa.eu/sinapse/.

Common qualitative data collection methods include:

Interviews (structured / unstructured): used in the inception stage of the process to gather information from relevant stakeholders when there is little information available on the wider policy context and issues to be addressed

Brainstorming / expert methods / DELPHI: used both in defining the problem and the policy options, rely on selecting a group of either external or internal experts and professionals that can deliver in a structured way their opinions; while brainstorming is aimed at merely gathering ideas and criticism is not allowed, DELPHI method uses increasingly precise questionnaires in several rounds, which are statistically processed and significantly different views must be accounted for;

Focus group: conducted on relatively large numbers of persons divided as per affected groups. It involves a questionnaire with no more that 4-6 questions for each group. Answers must be centralized in a final report highlighting both common and divergent opinions.

Case study: used to describe the relevant area for the policy proposal, adequate when there is little time to collect quantitative data as it informs on particular issues related to the nature of issues to be addressed;

SWOT analysis: used during brainstorming sessions for listing out of a wider list of potential strengths, weaknesses, opportunities and threats on a matrix the most important ones;

Problem-tree method: identifying all major problems which are relevant for the policy area and causal relationships between them, to understand the context and potential impact of implementing a policy;

Fish-bone diagram: a cause-effect based analysis, aimed at describing both the problems addressed by the policy and the objectives of the policy

Documentary analysis / desk research; a structured way to collect relevant data using already available reports, studies and statistics.

When using different data collection methods, always keep these key criteria in mind that the data

you collect and use after you process it must be:

reliable (i.e. you get the same results if you repeat the data collection and process exercise); and

valid (i.e. you are sure that the data reflects what it is supposed to measure).

How can I plan and run public consultation rounds?

Key questions to be asked to the stakeholders

You can conceive to focus the consultation round on virtually all aspect of the SN analysis, covering all

or only specific steps. The decision on how to craft the consultation document is yours, but you might

want to find a balance between standard general questions and more tailor-made enquiries.

The following are possible examples of questions:

Problem definition: - Is the problem correctly defined and understood? Why not? - Is the baseline option reasonably projected into the future?

Why not?

Performance goals: - Are the performance goals appropriate for Romania? Why not?

Options: - Are the identified options realistic and reasonable? Why not? - Should other options be considered? Which ones? Why?

Costs and benefits: - Does the SN identify all important costs and benefits of the options?

- What other costs and benefits should be considered?

- Can you submit data so as to be more precise about the

magnitude of the costs and benefits, and the comparisons of

the options?

Other impacts: - Should other impacts, such as distributional impacts, be added to the analysis?

You should always ask stakeholders to provide own data and justify their inputs.

Envisaged stakeholders to be consulted

You should identify the main stakeholders who should be involved. This should be broad rather than

narrow. When envisaging the type of stakeholders you want to reach out to, you must consider two

distinct but equally relevant rationales: first, the consultation exercise is a means for public

participation in decision-making, hence it should never exclude anyone with valid interests. Second,

the consultation must serve your purpose – i.e. verifying and strengthening your draft SN. Accordingly,

you should also think in terms of your specific needs.

A good consultation process brings in the views of all stakeholders with significant interests, with relevant information, and with a role in implementation.

A poor consultation process allows access to only dominant, powerful, or well-connected stakeholders.

Broadly speaking, stakeholders are:

individuals, groups, or organizations whose interests are affected by the issue or those whose activities strongly affect the issue. Stakeholders might include other levels of government and those from third countries;

those who possess information, resources and expertise needed for the impact assessment, strategy formulation, and implementation; and

those who control relevant implementation instruments.

Prepare a consultation matrix

A consultation matrix is a complete list of stakeholders and their position on the problem or issue you are

working on. It should show

• the interests of different stakeholders concerning the identified policy problem

• the resources at their disposal, esp. in relation to what can be brought into the debate on the specific issue

• their capacity to mobilize resources

• official / public position regarding the policy at stake

A possible matrix may look as follows:

Making use of consultation inputs

You are responsible for using the inputs received in an efficient and objective manner. This may not

always be as simple as it seems. When carrying out the consultation and using the information it

produces, you should be aware of a number of pitfalls that may introduce a bias into the results. In

particular,

Distinguish evidence from opinions: When you use a consultation to gather data, you should verify carefully that the method you use is correct and appropriate, and try to validate the robustness of the results. Peer-reviewing, benchmarking with other studies and sensitivity analysis can significantly enhance the quality of data. You should explore the risks and consequences related to interests groups positions regarding the issue at stake.

Weight representative inputs: Not all interest groups are equally able to take part in consultations or express their views with the same force. You may need, therefore, to make specific efforts to ensure that all relevant stakeholders are both aware of and able to contribute to the consultation. You should also be careful in drawing conclusions if there are only a small number of responses and they come from a narrow range of interests. At the same time, you should also give a response its due weight if it represents a large number of citizens or stakeholders.

Reporting on the consultation process

You must ensure that as a minimum the following is covered:

which stakeholders and experts were consulted;

the reason for having recourse to the chosen consultation channel (especially if it was geared to targeting specific stakeholders or experts); and

a schematic but comprehensive summary of the main thrust of the comments received, especially those related to the questions asked. In doing so, you must take account of all input received; you should differentiate the arguments outlined, without necessarily naming the

source of that position (however, you must keep a precise record of which stakeholder or expert recommended what);

very importantly, you must clarify what inputs you decided to retain and which ones you discarded – each time explain why you did so.

Stakeholder Interest/mission/

representativity Opinion/position

Capacity to mobilize

resources

Stakeholder A

Stakeholder B

…

Addendum 1. Potential Economic, Social And Environmental Impacts

The tables below provide a list of possible impacts against which to screen your options.26

Impacturi economice Întrebări cheie

Funcţionarea pieţei şi concurenţei

Ce impact (pozitiv sau negativ) are opţiunea asupra liberei circulaţii a bunurilor, serviciilor, capitalului şi forţei de muncă?

Opţiunea va duce la reducerea posibilităţii de alegere a consumatorilor sau la creşterea preţurilor prin scăderea concurenţei, la crearea de bariere pentru noii furnizori, la facilitarea comportamentului anticompetitiv sau la apariţia monopolurilor, segmentării pieţei, etc.?

Competitivitate, fluxuri comerciale şi

investiţionale

Ce impact are opţiunea asupra poziţiei competitive a firmelor româneşti? Are vreun impact asupra productivităţii?

Ce impact are opţiunea asupra barierelor comerciale?

Are vreun efect asupra fluxurilor investiţionale (inclusiv relocarea activităţilor economice)?

Costuri de funcţionare şi

desfăşurarea afacerilor (IMM-uri)

Vor fi impuse costuri suplimentare de ajustare, conformitate sau tranzacţie asupra companiilor?

Cum afectează opţiunea costul sau disponibilitatea resurselor esenţiale (materie primă, echipamente, forţă de muncă, energie, etc.)?

Afectează accesul la finanţare?

Afectează ciclul de investiţii?

Presupune retragerea anumitor produse de pe piaţă? Este limitat sau interzis marketingul anumitor produse?

Sunt introduse reguli mai stricte pentru desfăşurarea afacerilor în anumite domenii?

Duce la deschiderea sau închiderea anumitor companii?

Există produse sau companii care sunt tratate diferit de altele într-o situaţia comparabilă?

Sarcini administrative asupra

mediului de afaceri

Opţiunea afectează natura obligaţiilor de informare impuse mediului de afaceri (de exemplu, tipul de date solicitate, frecvenţa de raportare, complexitatea procesului de transmitere a datelor, etc.)?

Care este impactul acestor sarcini asupra IMM-urilor în special?

26 Translated from the European Commission IA Guidelines (2009), ANNEX p.32-37.

Autorităţi publice

Are opţiunea consecinţe bugetare pentru autorităţile publice de la diferite niveluri administrative (naţional, regional, local), atât imediat cât şi pe termen lung?

Introduce sarcini administrative suplimentare pentru instituţiile publice?

Este necesară crearea unor autorităţi noi sau restructurarea celor existente?

Drepturi de proprietate Sunt afectate drepturile de proprietate (bunuri imobile, bunuri mobile, bunuri tangibile/intangibile )? Este limitată achiziţionarea,

vânzarea sau utilizarea drepturilor de proprietate?

Există posibilitatea desproprietăririi?

Inovare şi cercetare

Opţiunea stimulează sau împiedică cercetarea şi dezvoltarea?

Facilitează introducerea şi diseminarea noilor metode de producţie, tehnologii sau produse?

Afectează drepturile de proprietate intelectuală (patente, mărci înregistrate, copyright, alte drepturi)?

Promovează sau limitează cercetarea academică sau industrială?

Promovează creşterea productivităţii sau utilizarea eficientă a resurselor?

Consumatori şi gospodării

Opţiunea afectează preţurile plătite de consumatori?

Are impact asupra calităţii şi/sau disponibilităţii bunurilor/serviciilor sau asupra încrederii consumatorilor?

Afectează informarea şi protecţia consumatorilor?

Are consecinţe semnificative pentru situaţia financiară a indivizilor/ gospodăriilor, imediat sau pe termen lung?

Afectează protecţia economică a familiei şi copilului?

Regiuni sau sectoare specifice Opţiunea are efecte semnificative asupra anumitor sectoare economice?

Va exista un impact specific asupra anumitor regiuni, de exemplu în ceea ce priveşte crearea sau pierderea de locuri de muncă?

Există o regiune sau un sector care va fi afectat în mod disproporţionat?

Mediul macroeconomic Are opţiunea consecinţe generale pentru creşterea economică şi ocuparea forţei de muncă?

Cum contribuie opţiunea la îmbunătăţirea condiţiilor pentru investiţii şi la buna funcţionare a pieţelor?

Există un impact direct asupra stabilităţii macroeconomice?

Impacturi sociale Întrebări cheie

Ocuparea forţei de muncă şi piaţa

muncii

Opţiunea facilitează crearea de noi locuri de muncă?

Are efect direct sau indirect asupra pierderii de locuri de muncă?

Are consecințe negative specifice pentru anumite profesii, grupuri de angajaţi sau liber profesionişti (persoane fizice autorizate să desfășoare activităţi economice)?

Afectează anumite grupuri de vârstă?

Afectează cererea de forţă de muncă?

Are impact asupra funcţionării pieţei muncii?

Are impact asupra echilibrului între viaţa privată, familie şi viaţa profesională?

Standarde şi drepturi referitoare la

calitatea locurilor de muncă

Opţiunea are impact asupra calităţii locurilor de muncă?

Afectează accesul angajaţilor sau şomerilor la formare profesională şi vocaţională?

Afectează sănătatea, siguranţa sau demnitatea angajaţilor?

Există efecte directe sau indirecte asupra drepturilor şi obligaţiilor existente ale angajaţilor, în special în ceea ce priveşte informarea şi consultarea şi protecţia împotriva concedierii?

Afectează protecţia tinerilor la locul de muncă?

Afectează direct sau indirect drepturile şi obligaţiile angajatorilor?

Respectă standardele minime de muncă ale UE?

Opţiunea facilitează sau limitează restructurarea, adaptarea la schimbări şi utilizarea inovaţiilor tehnologice la locul de muncă?

Incluziunea socială şi protecţia

grupurilor dezavantajate

Opţiunea afectează accesul pe piaţa muncii sau ieşirea de pe piaţa muncii?

Conduce direct sau indirect la creşterea egalităţii sau inegalităţii?

Afectează accesul egal la bunuri şi servicii?

Afectează accesul la servicii la plasare sau servicii de interes economic general?

Contribuie la informarea publicului în legătură cu o anumită problemă?

Are impact mai mare asupra anumitor grupuri sau persoane (de exemplu, persoanele cele mai vulnerabile sau cu risc crescut de sărăcie, copii, femei, bătrâni, persoane cu dizabilităţi, şomeri, minorităţi etnice sau religioase, azilanţi), companii sau alte organizaţii (de exemplu biserici) sau localităţi mai mult decât asupra altora?

Egalitatea de şanse între femei şi

bărbaţi, echitate şi nediscriminare

Opţiunea afectează principiul nediscriminării, tratamentului şi şanselor egale pentru toţi?

Are opţiunea un impact diferit asupra femeilor decât asupra bărbaţilor?

Promovează creşterea egalităţii de şanse între femei şi bărbaţi?

Implică direct orice diferenţă de tratament între grupuri sau persoane pe criterii de sex, origine rasială sau etnică, religie, dizabilitate, vârstă sau orientare sexuală? Poate duce la discriminare indirectă?

Indivizi, viaţa privată şi de familie,

protecţia datelor personale

Opţiunea impune cerinţe administrative suplimentare asupra persoanelor sau creşterea complexităţii administrative?

Afectează intimitatea persoanelor (inclusiv locuinţa sau comunicaţiile)?

Afectează dreptul la libertate al indivizilor?

Afectează viaţa de familie sau protecţia legală, economică sau socială a familiei?

Afectează drepturile copilului?

Opţiunea implică procesarea datelor personale sau accesul persoanelor afectate la datele personale?

Buna guvernare, participare,

administraţie publică, accesul la

justiţie, mass media şi etică

Opţiunea are efect asupra implicării factorilor afectaţi în procesele decizionale la nivelul administraţiei publice?

Sunt toţi actorii trataţi egal, cu respectarea diversităţii acestora? Opţiunea are impact asupra diversităţii culturale sau lingvistice?

Afectează autonomia partenerilor sociali în domeniile de competenţă ale acestora? De exemplu, afectează dreptul la negociere colectivă sau dreptul de a iniţia acţiuni colective?

Implementarea măsurii propuse afectează instituţiile şi autorităţile publice, de exemplu prin sporirea responsabilităţilor acestora?

Afectează accesul persoanelor la justiţie?

Prevedere dreptul de contestaţie înainte de a ajunge în instanţă?

Contribuie la informarea publicului în legătură cu un anumit aspect? Afectează accesul la informaţiile de interes public?

Afectează partidele politice sau organizaţiile nonguvernamentale?

Afectează mass media, pluralismul presei sau libertatea de exprimare?

Ridică probleme etice sau bio-etice (clonare, utilizarea corpului uman în scopuri patrimoniale, cercetare/testare genetică, etc.)?

Sănătate şi siguranţă publică

Opţiunea afectează sănătatea şi siguranţa persoanelor sau grupurilor, inclusiv speranţa de viaţă, mortalitatea şi morbiditatea, prin impactul asupra mediului socio-economic (mediul de lucru, venituri, educaţie, ocupare, nutriţie)?

Opţiunea creşte sau reduce probabilitatea riscurilor mortale datorate substanţelor dăunătoare mediului înconjurător?

Afectează sănătatea datorită schimbărilor nivelului zgomotului, calităţii solului, aerului, apei sau solului?

Va afecta sănătatea datorită schimbărilor în consumul de energie sau în gestionarea deşeurilor?

Afectează factorii de sănătate legaţi de stilul de viaţă, cum ar fi dieta, activitatea fizică, fumatul, consumul de alcool sau droguri?

Există efecte specifice asupra unor grupuri de risc (determinate de vârstă, sex, dizabilităţi, mobilitate, regiune, etc.)?

Infracţionalitate, terorism şi

securitate

Opţiunea are un efect asupra securităţii, infracţionalităţii, terorismului?

Afectează opţiunea şansele de depistare a infractorilor sau câştigurile potenţiale ale acestora din infracţiuni?

Există posibilitatea ca opţiunea să ducă creşterea numărului de infracţiuni?

Afectează capacitatea de asigurare a ordinii şi siguranței publice?

Are impact asupra intereselor de securitate?

Are impact asupra dreptului la libertate şi siguranţă, dreptului la un proces corect şi dreptului la apărare?

Afectează drepturile victimelor şi ale martorilor?

Accesul şi efectele asupra protecţiei

sociale, sănătăţii şi educaţiei

Opţiunea are efecte asupra serviciilor din punct de vedere al calităţii şi accesului egal?

Are efect asupra educaţiei şi mobilităţii lucrătorilor?

Afectează accesul persoanelor la educaţie publică/privată sau formare vocaţională şi profesională continuă?

Afectează furnizarea serviciilor transfrontaliere şi cooperarea în zonele de frontieră?

Opţiunea are impact asupra finanţării, organizării sau accesului la servicii sociale, de sănătate şi îngrijire?

Afectează universităţile şi autonomia universitară?

Cultură Are opţiunea impact asupra conservării patrimoniului cultural?

Afectează diversitatea culturală?

Există efecte asupra participării cetăţenilor la manifestări culturale sau asupra accesului lor la resurse culturale?

Impacturi ecologice Întrebări cheie

Schimbări climatice Opţiunea afectează emisia în atmosferă a gazelor cu efect de seră (de exemplu dioxid de carbon, metan, etc.)?

Opţiunea afectează emisia de substanţe nocive pentru statul de ozon (CFC, HCFC, etc.)?

Există un impact asupra capacităţii umane de adaptare la schimbările climatice?

Transport şi energie

Opţiunea va determina creşterea/scăderea nevoii/consumului de energie şi carburanţi?

Afectează intensitatea energetică a activităţilor economice?

Afectează mixul actual de combustibili (între fosil, gaz, nuclear şi regenerabil) utilizat în producţia de energie?

Va duce la creşterea sau scăderea cererii pentru transport (de pasageri sau marfă) sau va influenţa repartizarea modală a transportului?

Generează creşterea sau scăderea emisiilor produse de vehicule?

Calitatea aerului Opţiunea are efect asupra emisiilor de poluanţi acizi, eutrofici, fotochimici sau dăunători care pot afecta sănătatea umană, distruge recolte sau clădiri sau deteriora mediul (solul, apele)?

Biodiversitate, flora, faună şi peisaje

Opţiunea reduce numărul de specii/varietăţi/rase (reduce diversitatea biologică) sau creşte numărul de specii (promovează conservarea)?

Afectează specii protejate sau ameninţate sau habitatele acestora sau regiuni sensibile din punct de vedere ecologic?

Împarte peisajul în zone mai mici sau afectează în alt mod rutele de migraţiune, coridoarele ecologice sau zonele de conservare?

Afectează valoarea turistică a peisajelor protejate?

Calitatea apei şi resursele de apă Opţiunea determină creşterea sau scăderea calităţii şi cantităţii apei dulci şi subterane?

Duce la creşterea sau scăderea calităţii apei în zonele litorale şi marine (de exemplu, deversări de substanţe poluante)?

Afectează resursele de apă potabilă?

Calitatea solului şi resursele de sol Opţiunea afectează acidificarea, contaminarea sau salinitatea solului şi rata de eroziune a solului?

Contribuie la pierderea solului disponibil (de exemplu, prin lucrări de construcţii) sau la extinderea solului utilizabil (de exemplu, prin decontaminare)?

Utilizarea terenurilor Opţiunea are efectul de a introduce terenuri noi în utilizare pentru prima dată?

Afectează în vreun mod terenurile desemnate sensibile din punct de vedere ecologic? Duce la vreo schimbare în utilizarea terenurilor (de exemplu, schimbarea împărţirii între rural şi urban sau modificarea tipului de agricultură practicată)?

Resurse regenerabile sau

neregenerabile

Opţiunea afectează utilizarea resurselor regenerabile (de ex, peştele) şi conduce la o utilizare mai intensivă decât ritmul de regenerare ?

Reduce sau creşte utilizarea resurselor neregenerabile (apă subterană, minerale,etc.)?

Consecinţele ecologice ale mediului

de afaceri şi consumatorilor

Opţiunea determină o producţie şi un consum mai sustenabil?

Opţiunea schimbă preţurile relative ale produselor ecologice şi neecologice?

Promovează sau restricționează bunurile şi serviciile ecologice/ neecologice prin schimbări ale regulilor referitoare la investiţiile de capital, împrumuturi, asigurări etc.?

Întreprinderile sunt încurajate să devină mai poluante/mai puţin poluante prin schimbări în modul în care funcţionează?

Generarea şi reciclarea deşeurilor Opţiunea afectează producţia de deşeuri (solide, urbane, agricole, industriale, miniere, radioactive sau toxice) sau modul de tratare, depozitare sau reciclare a deşeurilor?

Probabilitatea şi dimensiunea

riscurilor de mediu Opţiunea afectează probabilitatea prevenirii incendiilor, exploziilor, accidentelor sau emisiilor accidentale?

Afectează riscul diseminării neautorizate sau neintenţionate de organisme modificate genetic sau străine?

Protecţia animalelor Există un impact asupra sănătăţii animalelor?

Opţiunea afectează protecţia animalelor (tratamentul uman al animalelor)?

Afectează siguranţa alimentelor destinate animalelor?

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ROMANIAsgg.gov.ro/docs/File/UPP/doc/evaluare/Methodological... · 2016-07-25 · Capannelli, and...

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