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Jaco
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sGrowth, Flexibility and
Protection: The Results of Regulatory Reform in
OECD Countries
Scott H. JacobsJacobs and Associates,
An international firm specializing in regulatory reform
With partners in the Americas, Europe, and East Asia
Jaco
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sOECD Regulatory Reform
PrincipleRegulatory quality, not deregulation, is the
driving principle behind reform today Deregulation where markets work better
than governments Re-regulation and new regulatory
institutions where markets cannot work without governments
More efficient government and social regulations to achieve high standards of health, safety and environmental protection at lower economic cost
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C osts of R egulation
F isca l co s tsto G o vern m e n ts
A d m in is tra tivep a p erw o rk
co s ts
C a p ita lco s ts
C o m plia n ce co s tsto b us in esses
a n d co nsu m e rs
D yn a m ic co s tsto eco no m icp e rfo rm a n ce
1.
Jaco
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s Total annual compliance costs - average per SME per country
0
10,000
20,000
30,000
40,000
50,000
60,000
US
do
llar
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10- country average
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sI. Benefits of Regulatory Reform Boosts consumer benefits
reducing prices for services and products such as electricity, transport, and health care, and by increasing choice and service quality.
Improves competitiveness Reducing the cost structure of exporting and upstream sectors in regional and global markets.
Fosters flexibility and innovation Reduces risk of crisis due to external shocks
Increases job creation by creating new job opportunities, and by doing so reducing fiscal demands on social security, particularly important in aging populations.
Maintains and increases regulatory protections in areas such as health and safety, the environment, and consumer interests by introducing more flexible and efficient regulatory and non-regulatory instruments, such as market approaches.
Supports sustainable, non-inflationary growth
Jaco
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s Sectoral effects of regulatory reforms
Price reductions in real terms (%)
Road transportGermany 30 France20
Mexico 25 United States 19
AirlinesUnited Kingdom 33 Spain 30
United States 33 Australia20
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Price reductions in real terms (%)Electricity
Norway (spot market) 18-26.2 United Kingdom 9-15.3
Financial servicesUnited Kingdom 70.4 United States 30-62.4
TelecommunicationsFinland 66.5 Japan 41.6
United Kingdom 63.6 Mexico 21.5
Korea 10-30.7
Sectoral effects of regulatory reforms
Jaco
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sI. Benefits of Regulatory Reform Boosts consumer benefits
reducing prices for services and products such as electricity, transport, and health care, and by increasing choice and service quality.
Improves competitiveness Reducing the cost structure of exporting and upstream sectors in regional and global markets.
Fosters flexibility and innovation Reduces risk of crisis due to external shocks
Increases job creation by creating new job opportunities, and by doing so reducing fiscal demands on social security, particularly important in aging populations.
Maintains and increases regulatory protections in areas such as health and safety, the environment, and consumer interests by introducing more flexible and efficient regulatory and non-regulatory instruments, such as market approaches.
Supports sustainable, non-inflationary growth
Jaco
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s Economy-wide effects of regulatory reform
GDP, long term effects (%) USA 0.9
Japan 5.6
Korea 8.6
Germany 4.9
Netherlands 3.5
France 4.8
Greece 9-11
Sweden 3.1
UK 3.5Spain 5.6
Source: OECD: various reports, 1997-2000
Jaco
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sProduct market regulation: inward
oriented policies
Inward-oriented policies
0123456
Jaco
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sUnderstanding regulatory
reformReform, well co-ordinated and planned, is not an ideological act, nor simply a concession to stronger markets that accelerates painful structural change. Instead, it is a means of managing necessary change so as to ease disruption and develop new opportunities for economic and social progress.
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