A Good Practice Handbook for Managing Regulatory Impact Analyses
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Authors: Paul De Civita (A), Andrew MacDonald (A), Yan Betty Hou (B), Meriem Ait-Ouyahia (C), Keldi Forbes (D), Goshu Gebremichael (E), Alexandre Roitman (F) and Jin Wang (E)
A) Policy Horizons Canada; (B) Health Canada; (C) Environment Canada; (D) Fisheries and Oceans Canada; (E) Canadian Food Inspection Agency; (F) Transport Canada
The development of a regulation, policy or program proposal is often a complicated undertaking where senior decision-makers must be assured that their organizations have proceeded with rigour in examining potential implications for Canadians. Since, in the case of some types of regulation, implementation may mean the curtailing of individual rights and freedoms, senior public servants and Ministers need to know!
This is where a regulatory impact analysis (RIA) reveals its value. RIA is a collaborative multidisciplinary approach consisting of natural and social assessments, legal and policy considerations, communications, public consultation, economic impacts, and decision analysis tools. RIA allows governments and Canadians to better appreciate potential future implications and uncertainties of a proposal, thereby informing the “best” possible course of action, given the available information. These evidence-based tools can be particularly helpful in addressing the growing complexity of many societal challenges. Of course, the approach can also apply to any public policy or program decision that demands society to consider complicated tradeoffs.1
Application of techniques used in RIA, such as risk assessment, benefit-cost analysis, cost-effectiveness analysis and stakeholder engagement processes, while applied to large infrastructure projects since the nineteen-fifties, began in earnest in the eighties for transportation, natural resources, agriculture, health protection/promotion, food safety and environmental protection/conservation proposals. As practitioners applied these tools and techniques in more and more complicated scenarios, refinements were made to the approaches requiring the development of specialized manuals providing guidance to practitioners and decision-makers. Countries and international organizations have produced a plethora of guidance documents over the years that help with the execution of the individual disciplines involved in RIA. The challenge for government organizations, however, is making sense of the available collections of guides, especially in terms of the practical steps managers and analysts need to take to generate a comprehensive package of evidence-based information.
This challenge was the prime motivation for six departments and agencies to collaborate and prepare A Good Practices Handbook for Managing Regulatory Impact Analyses (GPH). The intent of the Working Paper is to provide a bridge between the technical guidance and the operational requirements (e.g. creating a team, statements of work, charges for peer and expert reviews) to generate defensible and timely information regarding the implications of a range of alternative policy options.
What makes a ‘good’ RIA?
The Handbook provides useful tips that are not normally addressed in the technical guides available on how to: form multidisciplinary teams; draft Statement of Work for selected tasks that can more efficiently be undertaken externally to government; determine the appropriate amount of effort that is proportional to the expected impact; design effective charges for expert and peer reviews of analyses; and effectively communicate the results. However, the main ingredients of a ‘good’ package of evidence-based analysis are leadership and collaboration.
A key part that is critical for the successful completion of a RIA is leadership at all levels of the organization and stages of development. At the managerial level, leadership characterized by pragmatism and the ability to communicate with senior management, the private sector and Canadians, while being inclusive of divergent viewpoints, is as important as excellence in project management. At the expert or technical level, social and natural science leadership is qualified by understanding the state-of-the-art in their respective disciplines in addition to current knowledge and an ability to draw upon work available from others in the private sector, academia and governments, domestically and internationally.
The Whole – i.e. Not the Sum of the Parts
Collaboration2 of multiple disciplines to promote an integrated approach is perhaps the most important and challenging driver of a successful RIA, one that provides representative and constructive information to decision makers. The most illustrative example in this context involves the intelligence generated in risk assessment, economics and risk management that pertains to the estimate of the potential health, safety, and/or environmental benefits of a proposed policy change.
A proposed policy change may result in an improvement of the human health of Canadians by avoiding or significantly decreasing the exposure to, say, a chemical. The numerous natural science disciplines involved in understanding and characterizing these risks have developed generally accepted metrics to describe key thresholds. This natural science base is critical to the economist’s task to monetize benefits so that an effective comparison of costs of compliance and benefits can be made (i.e. determining efficiency). The challenge, in the past, has been for the risk assessor and the economist to mutually agree on an accepted metric that in the end would help the risk manager explain the (de-) merits of the proposal (e.g. an economist can use a risk assessor’s estimate of the number of asthma cases avoided much better than an estimate of the percent reduction in lung function of the elderly or the young).
Collaboration and leadership brings meaning to it all for all.
The full working paper, “A Good Practices Handbook for Managing Regulatory Impact Analyses”, is available upon request. Please contact firstname.lastname@example.org.
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