Deregulation or Death

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kosmolaut via flickr || Creative Commons

Murals proclaiming “Revolution or Death!” (Revolucion o muerte) are a common sight in Cuba. This is supposed to signify the devotion to communist revolution. While communism itself is abhorrent, the technique of repeated reiteration is effective in reminding what the political agenda is. The European Parliament, national parliaments and government agencies should all display  a different slogan – “Deregulation or Death”.

Let’s be honest. Governments remember deregulation in their talks with businesses or during election campaigns. But they do not pay nearly as much attention to deregulation as they do to expanding regulatory obligations, increasing taxes, or telling people how to behave. In fact, a politician whose agenda is to allow people to live their lives as they please is somewhere between an oxymoron and a unicorn.

Discussion on deregulation (or ‘cutting off’ the red tape) is left to experts or even bureaucrats who exercise regulation. Needless to say, actual deregulation is sporadic at best or non-existant at worst.

The EU Better Regulation Agenda looks great on paper. Cutting red tape and making the EU economy more competitive (and even more competitive than that of the US) has been a goal for a long time. On paper the political will seems to be there. But when time comes to actually cut down regulation politicians cower, and so the sword of Damocles does not fall.

It’s a pity because solutions and methodologies to cutting regulation have been in place for a long time. Check out these techniques to kill regulation with rather inspirational names:

  • Process Reengineering” – reducing burdens through e-government solutions that replace traditional ones;

  • Doing Business” – create objective benchmarks of business regulations at the sub-national level, point out bottlenecks, and provide concrete recommendations for reform;

  • Bulldozer” – where local business communities are mobilized to identify unnecessary regulations and to advocate for its reform or removal;

  • Or maybe “Scrap and build”? A severe approach that challenges the entire regulatory regime. It consists of a complete review of the regulatory system, rethinking its principles, and the interactions between regulators. The scrap and build approach involves a comprehensive revision of basic principles of an entire regulatory regime and building a new coherent and integrated regulatory policy package. No surprise the scrap and build approach has not been used very often.

  • My favorite is “Guillotine” – reviewing a large number of regulations against some criteria and eliminating those which are no longer functional. Furthermore, this approach espouses the principle of “reversal of burden of proof,”  i.e., the regulators need to justify why a license or regulation is needed, otherwise it will be removed.

Excessive regulation must be guillotined and bulldozed. If the EU does not do that, all its illusions of grandeur and of becoming the most competitive economy in the world will remain, well, illusions.

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