An Initial Evaluation of the "Better Regulation" Initiative

Alberto Alemanno, Jean Monnet Professor of European Union Law - February 15th, 2009
lady of justice - better regulation initiative

Key Ideas

• The implementation of the Better Regulation Initiative, as part of the Lisbon Program, aims to control the quality and transparency of regulations issued by the European Commission

• So that this initiative does not backfire on the Commission by instigating a large numbers of appeals, the Commission must improve the quality of its impact studies. 

Alberto Alemanno ©HEC Paris

Alberto Alemanno has been a professor at HEC since 2009. He teaches EU law and risk regulation. Holder of the Jean Monnet Chair at HEC Paris, he is also editor-in-chief of (...)

See CV

Morethan half of the judicial regulations currently in force in France are thedirect result of decisions made by the European Commission. This means that European law is widely applied within each member country. Alberto Alemanno has chosen this vast field and, more precisely, risk regulation systems as the subject of his research. As part of his doctoral thesis, he conducted a case study of trade in foodstuffs—a trade that, more so than any other, has a greater need to find a balance between the free circulation of products and consumer protection. As a result, he focused on the regulatory mechanisms inplace in the United States and within the European Community. The particularity of the European approach (European authorities launched the Better Regulation initiative—the center piece of the Lisbon Strategy* —in order to improve the transparency and effectiveness of regulations) raises many questions, one of which is: what canbe done to ensure that this initiative does not give rise to a large number of appealsin the European courts of justice, and thereby rebound on its creators?


A SPECIFIC APPROACH TO REGULATION

Whilethe American regulation model is based on a purely quantitative analysis of thecosts and benefits, measured by impact studies, the European model of thissystem is more ambitious: it encompasses the environmental and socialdimensions as well. Its approach is therefore more qualitative, and requiresthe use of several regulatory tools. To achieve this, the initiative promotes: •impact assessment of proposed legislation;

• the simplification of existing legislation;
• consultation procedures on drafting proposals;
• the screening and withdrawal of pending proposals;
• the monitoring and reduction of administrative burdens. Impact assessment is the most important of these measures. It is regarded, however, merely as an aid to the legislator and, consequently, is not restrictive. This causes a problem in the sense that target groups (companies, lobbies, consumer associations, etc.),who feel their rights are being infringed upon, could lodge appeals with the body responsible for the quality of impact studies (the Impact Assessment Board), with the aim of showing that the study has not been conducted in a satisfactory or conclusive manner.


CONSEQUENCES FOR THE EUROPEAN COMMISSION

The Commission has channelled substantial resources into the development of impact studies, which has necessarily raised consumer expectations. Let’s take the example of overbooking: European regulations entitle air passengers to compensation which is considered disproportionate by airlines, especially low-cost ones. Some companies will probably appeal, arguing that the impact study for this measurehas not been conducted correctly. The Better Regulation Initiative couldtherefore become a sort of Trojan horse: the Commission cultivates initiativesthat then turn around and give rise to numerous appeals. The European Court of Justice could even end up attacking the Commission! The Initiative has another weakness: in the United States, impact studies conducted by Federal agenciesare controlled by the Office of Information and Regulatory Affairs (OIRA),which is extremely powerful. Its European equivalent on the other hand, the Impact Assessment Board, has no right of veto; it can give its opinion onimpact analyses but cannot veto them.


WHAT IS THE ROLE OF CIVIL SOCIETY?

For along time, the European authorities have operated in a very technocratic way.In recent years, and in light of scandals such as mad cow disease, Europe hasbecome aware of the need to involve companies, consumers and NGOs in thejudicial decision-making process; civil society can now veto a decision by the Commissionon the grounds that there was no consultation when the regulation was formulated. The problem is that the actors of civil society are difficult to identify.Setting up panels that are fully representative is not easy, and industries aregenerally better represented than consumers! There is now a consensus about corporate self-regulation: they have to commit to respecting certain principles, otherwise the Commission legislates. At the moment, however, it is difficult to judge the effectiveness of these relatively recent measures.


IS THE INITIATIVE RESTRICTIVE ENOUGH?

At themoment, it is not; it is more of a soft law— an aid to legislators who interveneprior to the decision- making process. Alberto Alemanno does, however, havesome good reasons for believing in the success of this initiative. About twenty years ago, all environmental laws were subject to non restrictive impact studies. Over the years, such studies have become obligatory. Time is working in the Commission’s favor: ex post control mechanisms (e.g. an appeal in theECJ) will play their role and create jurisprudence. There is no doubt that theinitiative has a created an additional administrative burden for European regulatoryauthorities, which have already been accused of being overly bureaucratic. But thereis no going back now. To make the initiative successful, control mechanismsneed to be introduced. All that is required now is some creativity to make the procedure as simple as possible.


* Vast program launched by the Europeanauthorities, which aims at turning Europe into the most competitive and dynamicknowledge-based economy in the world by 2010.  


Based on an interview with Alberto Alemanno andhis article “The Better Regulation Initiative at the Judicial Gate: A Trojan Horse within the Commission’s Walls or the Way Forward?,” European Law Journal,  2008

INITIAL EVALUATION OF THE BETTER REGULATION INITIATIVE
INITIAL EVALUATION OF THE BETTER REGULATION INITIATIVE

Numerous studies have looked into the methods used by the Commission: to date, over 400 impact analyses have been carried out. Their field of application has continued to grow, and the quality of investigation techniques has vastly improved. The European Union’s system of impact studies is today considered one of the most ambitious in the world and is used as a model in numerous countries. The EU works in close collaboration with the United States, with the aim of supporting the principle of cross-fertilization that promotes the exchange of methods between countries. From this perspective, the assessment is a very positive one.