In 2002, as part of its commitment to Better Regulation, the European Commission launched a new initiative - Impact Assessments on most new proposals - which many hoped would be the start of a policy revolution. Five years on, however, the latest evidence suggests that they are failing to deliver.
The Commission took up the idea of conducting Impact Assessments on most new EU legislative and non-legislative measures to respond to mounting criticism that it was churning out proposals without considering whether action was actually necessary and, if it was, what impact its proposals might have.
The clear objective was to make Commission officials think about the implications of planned policies, examine if action was required, and if so to look at alternative instruments to implement the action, and generally to, improve the quality of their proposals. More specifically, they were required to assess the potential economic, environmental and social impacts of a proposal. The new system even brought a ‘subversive’ touch to EU policy-making by asking officials to consider all potential alternative policy options, including that of doing nothing.
About 200 Impact Assessments were carried out between 2002 and 2006. However, a recent Commission-funded study of the process carried out by the Evaluation Partnership, a UK-based consultancy, shows that the extent to which these assessments have improved the quality of proposals has “varied considerably”.
The study concludes that many Impact Assessments suffer from “an inappropriate approach” and, with very few exceptions, they are “found not to be an effective aid to decision-making”. While the evaluation notes that the IA system is in an early stage of its evolution, the evaluation nevertheless paints a picture of IAs not being used consistently and effectively throughout the policy making process.
These findings come as no surprise. Internal resistance within a number of Commission Directorates-General to producing such time- and resource-consuming documents has meant that implementation of the system has been variable, at best.
Guidelines were developed in 2003, and substantially revised two years later, to improve the overall quality of Impact Assessments, In November 2006, Commission President José Manuel Barroso decided to go even further, and announced the creation of an Impact Assessment Board (IAB).
The main tasks of this new board, staffed by senior Commission officials, acting in an individual and expert capacity, are to give “opinions”; i.e. to assess the quality of Impact Assessments before proposals are adopted by the Commission, and to advise those in charge of drafting a particular proposal on how to prepare these assessments.
Almost one year on, after a delay which meant that the IAB only started work in March 2007, there remains much room for improvement, in particular in relation to examining alternative policy options as part of the assessment. The IAB itself has acknowledged that this is a problem, pointing to a failure to do this in its opinions on around two-thirds of 33 ‘sample’ cases.
The way in which the IAB currently operates is severely hampering its efforts to improve the quality of Impact Assessments. However, the good news is that it could significantly improve its own performance by making just a few changes:
- It must get its priorities right. One objective of an Impact Assessment is to examine fully all the potential policy options - including the possibility of not producing a legislative proposal at all - rather than to justify the option already chosen by those proposing the policy. The IAB needs to have the power to reject Impact Assessments which fail to address this issue properly.
- At the very minimum, the IAB should require officials to explain what impact - if any - the Impact Assessment had on the final shape of the proposal. It is not enough to show that the quality of such assessments has improved - it is the quality of the proposal itself which really matters.
- Once new EU legislation is in place, it should be reviewed to assess its actual effect against its intended scope and impact, as set out in the IA. This would encourage a genuine regulatory review process and could provide useful information on whether the preferred policy options were the most effective ones.
- The board should draw more on external expertise - not sector-specific knowledge but rather expertise on impact evaluation - to examine what difference the assessments are making on a case-by-case basis. This could be done, for example, by getting an external evaluator or external board members to ‘pre-assess’ Impact Assessments for the IAB.
- Greater transparency is also essential. In particular, the board should ensure its opinions are published before a decision is made on a proposal, so that stakeholders can challenge them to ensure that the IA has taken all available evidence into account. To this end, the IAB should also be open to holding meetings with any interested parties.
If the Commission decides to go further and embark on a wide-ranging reform of the way in which legislative proposals are prepared, more fundamental changes will be needed.
The IAB, which is run by a small number of Commission staff working on this on a part-time basis, clearly suffers from a serious lack of time and resources.
In the long term, a fully independent IAB should have a clear mandate to operate as the Commission’s regulatory watchdog. Commission officials should draft “scoping papers” setting out the aims of a proposal under consideration early on in the policy process, building on roadmaps used in the planning cycle. But the Impact Assessments should be led by the IAB itself, drawing on external expertise when required, with genuine consideration of whether any intervention is required and of alternative options.
This would ensure that economic, social and environmental issues are taken into account, that all policy options are genuinely considered, and that the data and assumptions underlying the Impact Assessments are analysed carefully.
Better impact assessment should not be an end in itself. The ultimate goal is, of course, to improve the quality of policy proposals emanating from the Commission. A comprehensive system for producing consistently high-quality Impact Assessments, leading to genuine consideration of alternative policy options, could be the best possible way forward. Sadly, however, that remains a distant goal.
Note: Better Regulation has long been a core aspect of the EPC’s work on Europe’s political economy. The Better Regulation Forum monitors the ongoing work in the EU institutions in this area and makes policy recommendations where relevant.