How much bang for how many bucks?

Any visitor to Armenia can testify that the country has delicious food. But diners need to be assured that the khorovats, dolma, or basturma on their plates will not make them sick. How can this be assured?

Some 65 percent of the 320,000 inhabitants of the Brazilian city of Rio Branco use bicycles as their primary mode of transportation, and the popularity of biking is increasing across the country. But Brazil’s 40,000 annual traffic related fatalities makes protective gear a necessity. What is appropriate protection?

What do these situations have in common? At least one thing: Regulatory quality. In forming regulations, policy-makers need to balance caution with incentives. To do that, they must have multiple solutions to choose from, evidence to support them, and systematic procedures for selecting the best choice.

Enter a governance mechanism that is critical for developing effective regulation: Regulatory Impact Assessment (RIA). Simply put, this is a process for checking the quality of new rules. Some of the questions policy-makers can ask during the assessment include: What would be the direct costs on businesses of this new rule? How would it impact on competitiveness? What is the cost to the public budget? How will the rule be implemented and monitored? This process is widely used in most developed countries.

More recently, an increasing number of developing nations have introduced similar methods. As one would expect, a systematic design and implementation of good assessments of this type is not a trivial task. While many developing countries have progressed well, others are still experimenting with the appropriate approach to assessing impacts of new rules effecting the private sector and public service delivery.

The World Bank’s Governance Global Practice is spearheading two initiatives to support learning and dissemination of good practices for Regulatory Impact Assessment in developing countries:

• In early 2017, the Global RIA Awards were launched to identify and recognize innovate and impactful use of RIA in developing countries. The emphasis of the reward is on the actual practices and impacts of RIAs (as opposed to the design of the supporting institutions and guidelines supporting the RIA system.) In June 2017, a panel consisting of World Bank staff and academics from the University of Exeter selected winners from Armenia, Brazil and Bosnia & Herzegovina, along with several honorable mentions. The topics of the submissions ranged from regulation of the meat industry to bike helmets and alcohol consumption. But they all have in common their ability to introduce new thinking, efficiency and transparency into the process of developing efficient rules. Some have had immense impact on government procedures or on society as a whole; others have found new ways to collect information from stakeholders, or have come up with innovative regulatory alternatives. Congratulations to all the winners and honorable mentions!
• In addition, the World Bank has developed the Global RIA Database to collect and make RIA policy documents from well over 60 developing countries as well as several OECD Countries. The Database serves as a depository of guidelines, laws, and policies supporting good regulatory management practices. The Global RIA Database provides input and documentation for several research programs. Among these, a forthcoming study by the World Bank identifies key factors contributing to the success or failure of RIA reforms in developing countries over the last 10 years.

Hence, this is how both Armenian food safety and Brazilian bike helmet issues can have impact far beyond their own jurisdictions and policy domains. Learning from peers is central to public sector development, and broad dissemination of practices that work is key to continuous innovation.

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