Box 1. The OECD Reference Checklist for Regulatory Decision-Making
1. Is the problem correctly defined?
The problem to be solved should be precisely stated, giving evidence of its nature and magnitude, and explaining why it has arisen (identifying the incentives of affected entities).
2. Is government action justified?
Government intervention should be based on explicit evidence that government action is justified, given the nature of the problem, the likely benefits and costs of actions (based on a realistic assessment of government effectiveness), and alternative mechanisms for addressing the problem.
3. Is regulation the best form of government action?
Regulators should carry out, early m the regulatory process, an informed comparison of a variety of regulatory and non-regulatory policy instruments, considering relevant issues such as costs, benefits, distributional effects and administrative requirements.
4. Is there a legal basis for regulation?
Regulatory processes should be structured so that all regulatory decisions rigorously respect the "rule of law"; that is responsibility should be explicit For ensuring that all regulations are authorized by higher level regulations and consistent with treaty obligations, and comply with relevant legal principles such as certainty, proportionality and applicable procedural requirements.
5. What is the appropriate level (or levels) of government fur this action?
Regulators should choose the most appropriate level of government to take action, or if multiple levels are involved, should design affective systems of coordination between levels of government.
6. Do the benefits of regulation justify the costs?
Regulators should estimate the total expected costs and benefits of each regulatory proposal and of feasible alternatives, and should make the estimates available in accessible format to decision-makers. The costs of government action should be justified by its benefits before action is taken.
7. Is the distribution of effects across society transparent?
To the extent that distributive and equity values are affected by government intervention, regulators should rude transparent the distribution of regulatory costs and benefits across social groups.
8. Is the regulation clear, consistent, comprehensible and accessible to users?
Regulators should assess whether tides will be understood by likely users, and to that end should take steps to ensure that the text and structure of rules are as clear as possible.
9. Have all interested parties had the opportunity to present their views?
Regulations should be developed in an open and transparent fashion, with appropriate procedures for effective and timely input from interested parties such as affected businesses and trade unions, other interested groups, or other levels of government.
10. How will compliance be achieved?
Regulations should assess the incentives and institutions through which the regulation will take effect, and should design responsive
implementation strategies that make the best use of them.