Which Direction Is the Regulatory Quality Pendulum Taking?

• A Introduction

  This essay will try to answer the following question: what does quality of regulation mean?¹xBefore going on with the topic, it is necessary to answer to the following question: what is regulation? See OECD, Improving the quality of laws and regulation: economic, legal and managerial techniques, Paris 1994, p. 8. “Governments usually define ‘regulation’ as a precise set of legal instruments developed through specific constitutional/legal authorities, but this approach is not feasible when multiple countries are included in the analysis”. See N. Greco, ‘Consistenza, articolazione ed ambiguità della ‘regolazione’, SSPA, 2010, pp. 3 et seq. Regulation is an ambiguous term, which includes economic, legal, and technical principles. For this reason, a clear definition of regulation is very problematic.
  First of all, it explores some definitions of ‘regulatory quality’ or ‘legislative quality’ and, currently, a transversal notion does not exist.²xW. Voermans, ‘Concern about the quality of EU legislation: what kind of problem, by what kind of standards?’, Erasmus Law Review, Vol. 2, No. 1, 2009, pp. 60 et seq. “It is can possible to distinguish between the concept of ‘legislative quality’ and the concept of ‘regulatory quality’ […]. The different notions are not mutually exclusive, in fact in some respects they coincide”.
  For instance, the OECD has set up the criteria for the quality of legislation in general;³xOECD, Guiding Principles for Regulatory Quality and Performances, Paris 2005, pp. 3 et seq. These criteria are lawfulness, administrability and enforceability, effectiveness and efficiency, subsidiarity, proportionality, mutual harmonisation, simplicity, clarity, and accessibility. the Mandelkern report presented seven principles of regulatory quality, namely necessity, proportionality, subsidiarity, transparency, accountability, accessibility, and simplicity.⁴xMandelkern Group on Better Regulation, Final report, 13 November 2001, pp. 9 et seq.
  Regulatory quality is not a ‘one-size-fits-all’ concept;⁵xDG Enterprise of the European Commission, Indicators of Regulatory Quality, University of Bradford 2005, pp. 2 et seq. rather, it is based on different logics and criteria.⁶xR. Baldwin et al., Understanding Regulation. Theory, Strategy, and Practice, New York, Oxford University Press 2012, pp. 25-39. There are five tests or criteria that should constitute a set of benchmarks for assessing regulatory regime: “the legislative mandate; accountability; due process; expertise and efficiency”. According to some scholars, regulatory quality is not a ‘monolith’, rather it is a dynamic concept and intrinsically linked both to stakeholders and to context.⁷xC.M. Radaelli, How context matters: Regulatory quality in the European Union, paper delivered to the PSA conference, Lincoln 2004, pp. 3 et seq.
  The attention given to the quality of regulations is growing, because this principle is no longer a mere ‘cosmetic’ factor, but rather it is referred to as a way to design and formulate norms so as to favour compliance by end-users.⁸xP. Caretti, ‘Introduzione’, Osservatorio sulle Fonti, Torino, Giappichelli Editore 2007, pp. 1 et seq.
  This essay attempts to retrace the development of regulatory quality in European Union Law and, in particular, it explores some parameters in which this principle is assessed (Section B).
  Upon further analysis, it is possible to argue that regulatory quality is considered as a meta-policy or a meta-regulation: the focus is ‘on how rules are governed, rather than on a specific sector’⁹xC.M. Radaelli, Towards better research on better regulation, Paper delivered to the Advanced Colloquium on Better Regulation, Centre for Regulatory Governance, University of Exeter, 25-26 January 2007, pp. 3 et seq. (Part I).
  This way of looking at the development of regulatory quality has raised questions of credibility regarding the policies in the European Union. In most cases, the credibility is linked to regulatory quality meaning that it refers to the quality of the economic environment in which business operators operate.¹⁰xJ. Pelkmans et al., ‘Better EU Regulatory Quality: Assessing Current Initiatives and New Proposals’, in G. Galli & J. Pelkmans (Eds.), Regulatory Reform and Competitiveness in Europe, Edward Elgar 2001, pp. 460 et seq. The policies, programmes, and tools have the fundamental objective to increase competitiveness and economic growth (Part II).
  But the link between good quality regulation and competitiveness does not mean that the main focus of regulatory reforms is only on business; attention must be paid to people’s needs.¹¹xN. Rangone, ‘The Myth and Reality of Good Quality Regulation Tools’, Italian Journal of Public Law, Vol. 4, 2012, pp. 96-97. According to scholars, the challenge for the European Union and Member States is “to change the direction of the quality regulatory and assess the success of policies and its tools from the point of view of the citizens” (Part III).

• B Regulatory Quality in the European Union

  The traditional rationale for regulation is to prevent market failures, i.e. internalities, externalities, market power, and public goods.¹²xM. De Benedetto, ‘La comunicazione pubblica e l’attività di regolazione’, , No. 2, 2002, pp. 34 et seq. See also N. Rangone, ‘voce Regolazione’, in S. Cassese (a cura di), Dizionario di diritto pubblico, Milano, Giuffrè 2006, pp. 5057-5069. The public intervention to remedy market failures has been increasingly under debate and, without going into detail, risks to favouring some government failures: “intervention by public authorities can have adverse effects, potentially worsening market failures or failing to achieve set public policy goals”.¹³xD.F. Spulber, Regulation and Markets, Cambridge, MA, MIT Press 1989, p. 37. See OECD, The OECD Report on Regulatory Reform: Synthesis, Paris 1997, p. 5. “Governments have long used economic, social, and administrative regulations to align better public and private interests in markets. Regulations will continue to be an important tool for preserving and advancing public interests. There is a real risk, however, particularly in a time of profound and rapid change in economic and social conditions, that regulations can become an obstacle to achieving the very economic and social well-being for which they are intended”. See G. Majone, The rise of the regulatory state in Europe, West European Politics, London, 17:3, 1994, pp. 82 et seq. “Regulation should be used to increase the efficiency of the economy by correcting market failures, but not for other purposes, however legitimate”. See also J.L. Guasch & R.W. Hahn, The Costs and Benefits of Regulation: Implications for Developing Countries, Policy Research Working Paper, The World Bank, 1997, pp. 5 et seq. “Correcting market failures and ensuring equity are laudable goals, but achieving those goals through regulation is not always successful”.
  The occurrence of market failures and government failures is “the reason why we need a specific policy dedicated to regulatory quality”.¹⁴xC.M. Radaelli & A.C.M. Meuwese, ‘Better Regulation in the European Union. The political economy of impact assessment’, in K. Jacob (Ed.), Evaluating Integrated Impact Assessments (EVIA) Handbook, Springer 2009, pp. 2-4.
  Regulatory quality can be described by retracing its evolution within European Union law: it was in the mid-1990s that the search for better quality regulation became systematic.¹⁵xR. Baldwin, ‘Better Regulation: Tensions about the Enterprise’, in S. Weatherill (Ed.), Better Regulation, Portland, Hart Publishing Ltd. 2007, pp. 29 et seq. As a preliminary result of these studies, the emphasis has shifted from deregulation to regulatory quality: “the question is not the total level of regulation, but its efficiency, accountability, consistency and transparency”.¹⁶xC.A. Dunlop et al., ‘The many uses of regulatory impact assessment’, Regulatory & Governance, Vol. 6, Blackwell Publishing Asia Pty Ltd 2012, pp. 23-45. See C. Kirkpatrick & D. Parker, Regulatory Impact Assessment: developing its potential for use in developing countries, Centre on Regulation and Competition Working papers, 2003, p. 2. “In turn, research on regulatory quality has shown that it cannot be achieved by simply clamping down on the total number of rules”.
  Starting from the Sutherland report of 1992 that set up quality standards for EU legislation and the European Council Resolution of 1993 on the quality of drafting of Community legislation,¹⁷xSee Edinburgh European Council of 17 June 1993, OJ no C 166. the European Parliament, the Council, and the Commission adopted an Inter-Institutional Agreement in 1993 on the codification of legislative texts.¹⁸xSee Inter-institutional Agreement of 20 December 1994, Accelerated working method for official codification of legislative texts, OJ no C 293/2, OJ no C 102/2. See also H. Xanthaki, Drafting Legislation: Art and Technology of Rules for Regulation, United Kingdom, Hart Publishing Ltd. 2014, pp. 333 et seq. “The first set of concrete quality-promoting rules is expressed in the 1992 Sutherland Report […]”. The Molitor Report of 1995 focuses on legislative and administrative simplification,¹⁹xEuropean Commission, COM(95) 288/2 final. the Simpler Legislation for the Internal Market (SLIM) initiative.²⁰xEuropean Commission, COM(1996) 559 final. The White Paper on Governance, which has five good governance principles – openness, participation, accountability, effectiveness, and coherence,²¹xEuropean Governance, COM(2001) 428 final. and the Mandelkern Report were both issued in 2001.The launch of Impact Assessment procedure,²²xEuropean Commission, COM(2002) 276 final. Inter-institutional Agreement on Better Law-Making of 2003,²³xInter-institutional Agreement 2003 OJ 2003C321/01. Better Regulation,²⁴xEuropean Commission, COM(2005) 97 final. the establishment of the Impact Assessment Board (IAB),²⁵xAt the European Parliament plenary discussion on Better Regulation on 4 April 2006, Commission President Barroso acknowledged the need to respond to the varying quality of Commission impact assessments after which the Commission committed itself to establishing the Impact Assessment Board. See S. White, ‘Impact Assessment – Experience from the European Commission’, in K. Bizer, S. Lechner & M. Führ (Eds.), The European Impact Assessment and the Environment, Darmstadt, Springer 2010, p. 71. Small Business Act,²⁶xEuropean Commission, COM(2008) 394 final. Programmes for Reducing Administrative Burdens,²⁷xEuropean Commission, COM(2006) 689 final. Smart Regulation,²⁸xEuropean Commission, COM(2010) 543 final. EU Regulatory Fitness and Performance Programme (REFIT)²⁹xEuropean Commission, COM(2012) 746 final. – and further policies have added rules, over time, that can serve as criteria for the assessment of regulatory quality.³⁰xH. Xanthaki, ‘The Problem of Quality in EU legislation: What on Earth Is Really Wrong?’, Common Market Law Review, Vol. 38, 2001, pp. 651-676.
  On the basis of these policies, the regulatory quality in the European Union can be explored by meeting the following requirements when drafting, enacting, and implementing legislative acts:³¹xVoermans 2009, pp. 71-72. (1) the legislator’s activity is subject to the law itself, and the author of the initiatives must respect the norms included in the treaties – this is the principle of legality; (2) preparation and enactment of the policies according to the due procedure. Moreover, the due process criterion is intrinsically linked as a type of procedure that should be “fair, accessible and open”;³²xBaldwin et al. 2012, p. 29. (3) careful compliance with the subsidiarity and proportionality principles. A careful assessment of the principles of subsidiarity and proportionality during the pre-legislative phase is important to ensure that proposals are appropriately conceived, and, in this way, within the European Commission the Impact Assessment Board’s role seems to be very important;³³xImpact Assessment Board Report for 2009, 2010, 2011, 2012, 2013. (4) choosing the right instrument: hard law or soft law; (5) the implementation and enforcement of legislation to be enacted – this is called the principle of effectiveness; (6) assessing the cycle of regulation: monitoring and evaluation of an act and its effects; and finally (7) the language must be “clear, simple and precise”.³⁴xN. Lupo & G. Piccirilli, ‘European Court of Human Rights and the quality of legislation: shifting to a substantial concept of “law”’, Legisprudence, Vol. 6, No. 2, p. 237. The Authors reported the European Court of Human Right’s position on the requirement of lawfulness: “notwithstanding the written or unwritten form of the law, irrespective of its positive or judge-made nature, the actual requirement of lawfulness is the good quality of the internal provision, in terms of its inherent clarity, foreseeability, precision and accessibility”.
  This construction highlights that regulatory quality includes both procedures to adopt rules which must be participated, transparent, and accountable and rules themselves that must be clear, coherent, and comprehensible – in response to the requirements of formal quality – necessary, residual, and respectful of the principles of proportionality and adequacy in the light of an assessment of less restrictive alternatives – in response to the requirements of substantial quality.³⁵xJ.C. Piris, ‘The Quality of Community Legislation: The Viewpoint of the Council Legal Service’, in A. Kellermann et al. (Eds.), Improving the Quality of Legislation in Europe, The Hague, Kluwer Law 1998, p. 28. “There are two separate aspects to the question of the quality of legislation: the first aspect, which concerns the substance of the law; the second aspect concerns the form of legislation (the quality of legislative drafting) and how accessible it is to the public”.
  As we will see in the end, substantial quality also requires careful attention to cognitive errors, non-economic incentives, and psychological processes that influence stakeholders’ choices; otherwise, the regulations risk being inadequate to achieving their objectives, with high and unjustified costs for all.³⁶xN. Rangone, ‘Il contributo delle scienze cognitive alla qualità delle regole’, in Mercato concorrenza regole, XIV, 1, aprile 2012, pp. 151-166 et seq.

  I Regulatory Quality as a Type of Meta-Policy

  In this brief analysis of regulatory quality development in the European Union, most of the strategies, programmes, and tools – that, as mentioned above, cover the formal and substantial level of quality – do not correspond to a single policy (e.g. media regulation, environmental regulation, and so on) or single phase of the regulatory cycle, but they have led to a different analysis that concerns the procedures of rulemaking, in order to ensure that some criteria of good regulation are respected.³⁷xS. Cassese, ‘La qualità delle politiche pubbliche, ovvero del metodo del governare’, in Atti del Convegno su Rapporto Italia decide 2012-2013, Roma, Camera dei deputati, 11 febbraio 2013, pp. 2 et seq. See also J. Ponce Solé, ‘¿Mejores normas?: Directiva 2006/123/CE, relativa a los servicios en el mercado interior, calidad reglamentaria y control judicial’, Revista de Administración Pública, Madrid, No. 180, septiembre-diciembre 2009, pp. 201-243. The author agrees with this definition of regulatory quality as meta-policy “[…] parece haber un claro consenso en el sentido de que la calidad normativa se refiere tanto a los procedimientos de elaboración (con singular importancia del elemento de la participacion ciudadana real y efectiva) como a los resultados alcanzados […]”.
  Therefore, this principle includes all policies and, for this reason, regulatory quality itself should be considered as a meta-policy or a meta-regulation.³⁸xC.M. Radaelli, ‘Whither Better Regulation for the Lisbon Agenda’, Journal of European Public Policy, Vol. 14, No. 2, 2007, p. 3.
  As a meta-policy, it does not deal with individual sectors; rather, it “sets central rules, standards and thresholds through which rules are created, assessed, adopted, implemented, enforced, appraised ex post and/or revised and scrapped”.³⁹xRadaelli & Meuwese 2009, pp. 1 et seq. See also A.C.M. Meuwese, Impact Assessment in EU Lawmaking, The Hague, Kluwer Law International 2008, pp. 24 et seq.
  This principle is a type of meta-regulation because of its emphasis “on standards and rules which, instead of government specific sectors or economic sectors, steer the process of adoption, enforcement and evaluation”.⁴⁰xRadaelli 2007, at 3.
  In other words, regulatory quality as a type of meta-policy means that a well-written law chooses those options with lower costs and higher benefits in which stakeholders are consulted through the whole process, all this creating an added benefit – and lower social costs – as well as the benefits expected already.⁴¹xAPEC-OECD, First workshop of the Apec-Oecd co-operative initiative on regulatory reform, 19-20 September 2001, OECD Publishing, Paris 2001, p. 15.
  In this way, regulatory quality is defined as an ‘added value’ of any policy, regardless of its content.⁴²xL. Carbone, ‘Qualità della regolazione e competitività: ricette diverse ma ingredienti comuni’, in Seminario su, Tecniche di produzione normativa e ‘better regulation’, Roma, Università La Sapienza, 26 gennaio 2007, p. 3. The quality of a regulation is an ‘autonomous public interest’ that is not to be identified with the different interest sectors of the regulatory activities but that has its own specificity and, consequently, that must be pursued with the correct instruments and strategies.⁴³xIbid.

  II Regulatory Quality as an Economic Factor

  The OECD has launched a new regulatory reform programme each year and it has encouraged member states to promote a regulatory environment to increase competitiveness, in particular reducing administrative burdens for firms.⁴⁴xOECD, Regulatory Reform for Recovery and Growth, Paris 2010, p. 1. “Regulatory reform has been extensively used throughout the OECD to stimulate recovery from crises in the past, without further adding to debts and deficits. In the short term, reform can boost confidence in regulatory systems by showing that governments are committed to improving regulatory quality”.
  The European Union recognised regulatory quality as one of the key factors to achieving competitiveness and attracting investments: in particular, the Reducing Administrative Burden Programmes,⁴⁵xEuropean Commission, SWD(2012) 423 final. the Small Medium Enterprises Test (so-called SME test)⁴⁶xThe European Parliament Committee on Industry, Research and Energy (ITRE) has commissioned Copenhagen Economics to carry out a study on the implementation of the so-called Small Medium Enterprises (SME) test in member state and European commission services. In particular, Italy and Greece are among the member states that have not institutionalised the SME test in their impact assessment tools. as required by Small Business Act,⁴⁷xEuropean Commission, COM(2011) 78 final. and the Regulatory Fitness Programme⁴⁸xThe Conclusions of the European Council, EUCO 79/14, p. 8. The European Council recommended, in respect of regulatory fitness measures, that “Member States should make full use of regulatory flexibility provisions for the benefit of small and medium-sized enterprises in the implementation of EU legislation”. have the fundamental objective of cutting red tape for firms and in general creating an environment to favour economic growth.⁴⁹xM. De Benedetto, M. Martelli & N. Rangone, La qualità delle regole, Bologna, Il Mulino 2011, pp. 11 et seq.
  The focus is on how rules are governed, rather than on specific sectors – as illustrated in Part I – and it explains the wide diffusion of better regulation within the priorities as seen in “the Lisbon agenda for competitiveness in Europe”.⁵⁰xRadaelli 2007. See also S. Jacobzone, C. Choi & C. Miguet, Indicators of Regulatory Management Systems, OECD Working Papers on Public Governance, OECD Publishing April 2007, p. 19. “In many European Union countries with the Lisbon Agenda, regulatory reform is seen as an instrument to boost competitiveness and growth, to improve the country as a business location”.
  One can argue that politicians want good regulation for two reasons. Firstly, good regulation increases the legitimacy of the regulatory system;⁵¹xA. Morrone, ‘La qualità della regolazione: per una ricerca nell’esperienza regionale’, in A. Morrone et al. (Eds.), La qualità della legislazione regionale, Bologna, Maggioli Editore, Istituzioni del Federalismo 2011, p. 5. secondly, in open economies, good regulation increases the competitiveness of a country.⁵²xC.M. Radaelli et al., The Implementation of Regulatory Impact Assessment in Europe, Paper delivered to the ENBR workshop, University of Exeter 2008, p. 5. W. Voermans & Y. Schuurmans, ‘Better Regulation by Appeal’, European Public Law, Vol. 17, No. 3, 2011, p. 507. “Better regulation has the potential to boost economic growth and increase competitiveness by relieving burdens which come about as a result of legislation […]”.
  Otherwise, a complex and poorly coordinated (organised) set of rules on the one hand promotes the beginning of and the continuation of episodes of corruptions;⁵³xM. Bianco et al., ‘Concorrenza e regolamentazione in Italia’, Questioni di Economia e Finanza, No. 123, Aprile 2012, p. 13. Some studies have demonstrated the link between regulatory quality and corruption: the member states that have poor quality – the southern countries – also have a high level of corruption. on the other hand, it influences the functioning of market economy in a negative and significant way.⁵⁴xU. Morera & N. Rangone, ‘Sistema regolatorio e crisi economica’, Analisi Giuridica dell’Economia, No. 2, 2013, pp. 383-394.
  The Reports of various institutions –World Economic Forum, World Bank, OECD, Confindustria, and so on – have amply demonstrated, though their methods and objectives are different, the relationship between a country’s regulatory regime and its economic growth.⁵⁵xS. Salvi, ‘La qualità della regolazione in Italia tra buone intenzioni e modesti risultati: un confronto internazionale’, in A. Natalini & G. Tiberi (a cura di), La tela di Penelope. Primo rapporto Astrid sulla semplificazione legislative e burocratica, Bologna, il Mulino 2010, pp. 61-85. For instance, countries that have a rigidity of regulations, among which are Italy and Greece, have a low rate of the economic growth, poor regulatory quality and high level of corruption.⁵⁶xP. Parascandolo & G. Sgarra, ‘Crescita e produttività: gli effetti economici della regolazione’, in I. Cipolletta et al. (a cura di), Concorrenza Bene Pubblico, Roma, Confindustria, Editore SIPI 2006, p. 9. See World Bank, Doing Business Report 2008, Washington DC, 2007. Italy and Greece have the lowest Worldwide Governance Indicators – which measures the regulatory quality level – in the EU countries at 15.
  The Italian Constitutional Court also recognised this relationship; in fact, in its sentence No. 299 of 2012, it affirmed that: “the efficiency and the competitiveness of the economic system are influenced by the quality of the regulations, which condition the actions of the operators on the market”.⁵⁷xItalian Constitutional Court, Sentence No. 200, 17 July 2012.
  As mentioned above, regulatory quality has become a strategic objective for OECD states, and it, as is known, has assumed a fundamental role in the political agenda of major countries.⁵⁸xMorera & Rangone 2013, p. 384. See also World Bank, Better Regulation for Growth. Governance frameworks and tools for effective regulatory reform, Washington DC, 2010, p. 1. “[…] indicators of regulatory quality, performance measures of regulatory governance and targets for the reduction of paperwork and administrative burdens have become prominent items on the reform agenda of governments and international organizations”.
  Especially during a period of crisis, great emphasis has been placed by governments on improving regulations.⁵⁹xMorera & Rangone 2013, p. 384. See OECD, Reviews of Regulatory Reform – Regulatory Reform for Recovery. Lesson from implementation during crises, Paris 2010, p. 35. “Regulatory reform can play an important role during crisis episodes […]”. See also Rangone 2012, pp. 96 et seq. The Author reminds us that during negative economic trends, the most important states started a new regulatory reform programme. “The Great Depression in the U.S led to an enormous expansion in the scope of public utility and common carrier regulation, and the ‘stagflation’ (…) of the 1970s set the stage for the deregulation movement. Similarly, Europe turned to better regulation policies in 2000 to remedy its sluggish economy. At present, the European Commission points out that the crisis has highlighted the need to address incomplete, ineffective, and underperforming regulatory measures and, in many cases, they need to do so urgently”. It is necessary to utilise some instruments in order to support the functioning of the market economy, favour economic growth and innovation, and promote the involvement of the end-users in the decision-making process.
  The last point, in particular, is very important: the legislator should increase the stakeholders’ participation, motivate their own rules, and make language easier to facilitate compliance with hard and unpopular policies.⁶⁰xMorera & Rangone 2013, p. 385.

  III Regulatory Quality That Meets the People’s Needs

  The European Union focuses its efforts toward regulatory quality to reduce red tape for firms and in general to respond to the variable market conditions and business requirements; however, equal importance is “given to all the end-users of regulation, among these citizens, consumers, employees, and so on”.⁶¹xRangone 2012, p. 96.
  According to some scholars, “the new challenge […] is to apply Better Regulation, Smart Regulation, and the 2020 Agenda for Europe to citizens, along with business, thus showing that the Treaty of Lisbon is not a list of good political intentions but an accurate reflection of the new European Union for its citizens and peoples”.⁶²xH. Xanthaki, ‘European Union Legislative Quality After the Lisbon Treaty: The Challenges of Smart Regulation’, Statute Law Review, Oxford University Press 2013, pp. 15-16.
  Regulation cannot be effective or efficient – and therefore is of poor quality – “if policy makers do not consider how target people really react, but rather they presume to know what their reactions will be”.⁶³xA. Alemanno & A. Spina, Nudging Legally. On the Checks and Balances of Behavioural Regulation, Jean Monnet Working Paper No. 06, 2013, pp. 9 et seq.
  In fact, cognitive sciences have shown that stakeholders’ reactions to regulations are not always rational,⁶⁴xK.R. Popper, In search of a Better World, London, Routledge 1994, pp. 4 et seq. “To err is human. All human knowledge is fallible and therefore uncertain”. but rather stakeholder behaviour is unforeseeable and it risks compromising legislator’s objectives and especially reducing regulatory quality.⁶⁵xN. Rangone, ‘Errori cognitivi e scelte di regolazione’, in Analisi Giuridica dell’Economia, Vol. 1, 2012, pp. 7-18.
  Behaviour economics findings – in which an important combination of information about human limitations is present – should be managed and implemented by legislators as effectively as possible.⁶⁶xO. Amir & O. Lobel, ‘Liberalism and Lifestyle: Informing Regulatory Governance with Behavioural Research’, European Journal of Risk Regulation, in A. Burgess et al., Symposium on Nudge, European Journal of Risk Regulation, Vol. 3, No. 1, January 2012, pp. 17 et seq.
  The fundamental question is, in general, how the study of the behaviour economics can enhance the quality of regulations and, in particular, “how to turn the plentiful empirical findings about human behaviour into an operational regulatory tool”.⁶⁷xRangone 2012, pp. 151-166. According to some authors, “one way for regulators to take the findings of behavioural research seriously would be to introduce behavioural test into its Regulatory Impact Assessment (RIA)”.⁶⁸xA. Alemanno, ‘Nudging Europe. Why the European Commission Should Include Behavioural Insights in the Design of Regulatory Proposals’, European Voice, 16 May 2012, p. 3.
  Regulatory Impact Assessment (hereafter RIA) can be useful in helping legislators gather real information, including feedback from stakeholders via consultation – consultation is an ideal instrument to ascertain both the irrational reactions and cognitive errors of end-users and to integrate effective perceptions within policy process.⁶⁹xRangone 2012, p. 11.
  RIA’s goals as well as the gathering of information on citizens’ behaviour – including cognitive error analysis – is to support the formulation of policy option alternatives and the doing nothing option “avoiding any over-estimation of the social costs of unexpected behaviour, and any under-estimation of the social costs of, for instance, a limitation of individual liberty”.⁷⁰xF. Di Porto & N. Rangone, ‘Behavioural Sciences in Practice: Lessons for EU Policymakers’, forthcoming in A.L. Sibony & A. Alemanno (Eds.), Nudging and the Law. What Can EU Learn from Behavioural Sciences?, Oxford, Hart Publications 2014, pp. 3 et seq.
  The adoption of RIA linked to the findings of behavioural research raises some questions. RIA should be placed in the initial phase of the policy process, followed by further analysis to permit the adjustment of inappropriate norms that have a negative effect, because they do not include a proper analysis of behaviour limitations.⁷¹xEuropean Commission, Applying Behavioural Sciences to EU Policy-Making, 2013, p. 10. The European Commission suggests: “placing behavioural insights at the beginning of the impact assessment process, in the problem definition section. In this way, individual behaviour can be one of the drivers of a policy problem that a new initiative tries to tackle”.
  Then, this tool should develop in terms of information gathering and, therefore, it should incorporate risk analysis to consider heuristics and biases as risks which are to be used to calculate probabilities.⁷²xF. Di Porto & N. Rangone, Cognitive-Based Regulation: New Challenges for Regulation, in <www.federalismi.it>, No. 20, 2013, pp. 4-6. R. Baldwin, M. Cave & M. Lodge, Understanding Regulation. Theory, Strategy, and Practice, New York, Oxford University Press 2012, pp. 90 et seq. “Risk perception studies are interested in seeking to understand better the individual biases that explain responses to risk”.
  Finally, RIA requires the support of cognitive science experts. So far this development of RIA, and in particular of impact assessment, has not received any real implementation into regulatory process.⁷³xF.M. Calvosa, Interazione professionale e competenze multidisciplinari per una better regulation, Roma, Forum P.A., 9 maggio 2011. “Better regulation requires high competences in the following sciences: sociology, economy, law, public communication and statistics”.

• C Conclusions

  This essay has tried to answer to the question: what is good regulation? However, it is difficult to answer; the quality of regulations is a dynamic value, depending both on the stakeholders and context.⁷⁴xRadaelli 2004, p. 10. Different stakeholders may have different notions of quality in mind: “[…] the bureaucrat defines quality as a matter of following proper and legitimate procedures in the regulatory process; for the politician, quality may well mean responsiveness to pressure groups or the median voter, or even responsiveness to extend pressure created by the European Union, the International Monetary Fund (IMF) and so on; firms perceive quality in terms of minimization of costs and defines success in terms of profit; citizens use yet another criterion, the effective protection from risk”. Thus, the measurement of the performance of regulatory quality and better regulation tools is “extremely challenging for a number of reasons”.⁷⁵xBaldwin et al. 2012, p. 35. See C.M. Radaelli & A.C.M. Meuwese, Impact Assessment Indicators Measuring. The quality of Impact Assessment, FP6 project Evaluating Impact Assessments (EVIA), 2009, pp. 2-3. “[…] measuring quality is notoriously difficult to realize because of lack of agreement on standards in a country or, in the context of international organisations, across countries; intrinsic problems of operationalisation of concepts it is daunting to image a set of indicators of responsiveness; and lack of useful data”. According to some scholars, these factors make the quality of regulations an ‘elusive’ principle.⁷⁶xRadaelli & Meuwese 2009, p. 1. Voermans 2009, pp. 60 et seq.
  This article has retraced the development of regulatory quality in the European Union: policies, programmes, and documents – mainly of a non-binding nature – have added rules that can serve as criteria for the assessment of quality regulation.
  First of all, regulatory quality is defined as a meta-policy or meta-regulation: it refers to how rules should be enacted. In this way, regulatory quality does not correspond to a single sector but covers all policies. Starting from this construction, quality of regulations is constituted by both rules which must be clear, coherent, and comprehensible (formal quality) and rules must be accountable and adequate in the light of an assessment of less restrictive alternatives (substantial quality).⁷⁷xM. De Benedetto, Maintenance of rules, CREI Working Paper No. 2, 2014, p. 17.
  Second, this principle is linked to an idea common to international organisations that have considered it as among the key factors to be used by states to achieve competitiveness and attract investments. In this way, many authors have explained that the main objective of Better Regulation is economic competitiveness.⁷⁸xJ.B. Wiener, ‘Better Regulation in Europe’, Current Legal Problems, Vol. 59, Oxford University Press 2006, p. 444.
  Finally, quality of regulations, in this ideal process, is also measured in the light of its capacity to reduce the short circuit determined by the heuristic and cognitive errors, which may be present in the choices made by stakeholders. In fact, if legislators do not have this relevant information about all stakeholders (citizens, consumers, end-users), or are not able to use it, there is a risk of compromising policy objectives and thus reduce the quality of regulation.⁷⁹xRangone 2012, p. 1; Rangone 2012, pp. 157 et seq.

Noten

• 1 Before going on with the topic, it is necessary to answer to the following question: what is regulation? See OECD, Improving the quality of laws and regulation: economic, legal and managerial techniques, Paris 1994, p. 8. “Governments usually define ‘regulation’ as a precise set of legal instruments developed through specific constitutional/legal authorities, but this approach is not feasible when multiple countries are included in the analysis”. See N. Greco, ‘Consistenza, articolazione ed ambiguità della ‘regolazione’, SSPA, 2010, pp. 3 et seq. Regulation is an ambiguous term, which includes economic, legal, and technical principles. For this reason, a clear definition of regulation is very problematic.

• 2 W. Voermans, ‘Concern about the quality of EU legislation: what kind of problem, by what kind of standards?’, Erasmus Law Review, Vol. 2, No. 1, 2009, pp. 60 et seq. “It is can possible to distinguish between the concept of ‘legislative quality’ and the concept of ‘regulatory quality’ […]. The different notions are not mutually exclusive, in fact in some respects they coincide”.

• 3 OECD, Guiding Principles for Regulatory Quality and Performances, Paris 2005, pp. 3 et seq. These criteria are lawfulness, administrability and enforceability, effectiveness and efficiency, subsidiarity, proportionality, mutual harmonisation, simplicity, clarity, and accessibility.

• 4 Mandelkern Group on Better Regulation, Final report, 13 November 2001, pp. 9 et seq.

• 5 DG Enterprise of the European Commission, Indicators of Regulatory Quality, University of Bradford 2005, pp. 2 et seq.

• 6 R. Baldwin et al., Understanding Regulation. Theory, Strategy, and Practice, New York, Oxford University Press 2012, pp. 25-39. There are five tests or criteria that should constitute a set of benchmarks for assessing regulatory regime: “the legislative mandate; accountability; due process; expertise and efficiency”.

• 7 C.M. Radaelli, How context matters: Regulatory quality in the European Union, paper delivered to the PSA conference, Lincoln 2004, pp. 3 et seq.

• 8 P. Caretti, ‘Introduzione’, Osservatorio sulle Fonti, Torino, Giappichelli Editore 2007, pp. 1 et seq.

• 9 C.M. Radaelli, Towards better research on better regulation, Paper delivered to the Advanced Colloquium on Better Regulation, Centre for Regulatory Governance, University of Exeter, 25-26 January 2007, pp. 3 et seq.

• 10 J. Pelkmans et al., ‘Better EU Regulatory Quality: Assessing Current Initiatives and New Proposals’, in G. Galli & J. Pelkmans (Eds.), Regulatory Reform and Competitiveness in Europe, Edward Elgar 2001, pp. 460 et seq.

• 11 N. Rangone, ‘The Myth and Reality of Good Quality Regulation Tools’, Italian Journal of Public Law, Vol. 4, 2012, pp. 96-97.

• 12 M. De Benedetto, ‘La comunicazione pubblica e l’attività di regolazione’, , No. 2, 2002, pp. 34 et seq. See also N. Rangone, ‘voce Regolazione’, in S. Cassese (a cura di), Dizionario di diritto pubblico, Milano, Giuffrè 2006, pp. 5057-5069.

• 13 D.F. Spulber, Regulation and Markets, Cambridge, MA, MIT Press 1989, p. 37. See OECD, The OECD Report on Regulatory Reform: Synthesis, Paris 1997, p. 5. “Governments have long used economic, social, and administrative regulations to align better public and private interests in markets. Regulations will continue to be an important tool for preserving and advancing public interests. There is a real risk, however, particularly in a time of profound and rapid change in economic and social conditions, that regulations can become an obstacle to achieving the very economic and social well-being for which they are intended”. See G. Majone, The rise of the regulatory state in Europe, West European Politics, London, 17:3, 1994, pp. 82 et seq. “Regulation should be used to increase the efficiency of the economy by correcting market failures, but not for other purposes, however legitimate”. See also J.L. Guasch & R.W. Hahn, The Costs and Benefits of Regulation: Implications for Developing Countries, Policy Research Working Paper, The World Bank, 1997, pp. 5 et seq. “Correcting market failures and ensuring equity are laudable goals, but achieving those goals through regulation is not always successful”.

• 14 C.M. Radaelli & A.C.M. Meuwese, ‘Better Regulation in the European Union. The political economy of impact assessment’, in K. Jacob (Ed.), Evaluating Integrated Impact Assessments (EVIA) Handbook, Springer 2009, pp. 2-4.

• 15 R. Baldwin, ‘Better Regulation: Tensions about the Enterprise’, in S. Weatherill (Ed.), Better Regulation, Portland, Hart Publishing Ltd. 2007, pp. 29 et seq.

• 16 C.A. Dunlop et al., ‘The many uses of regulatory impact assessment’, Regulatory & Governance, Vol. 6, Blackwell Publishing Asia Pty Ltd 2012, pp. 23-45. See C. Kirkpatrick & D. Parker, Regulatory Impact Assessment: developing its potential for use in developing countries, Centre on Regulation and Competition Working papers, 2003, p. 2. “In turn, research on regulatory quality has shown that it cannot be achieved by simply clamping down on the total number of rules”.

• 17 See Edinburgh European Council of 17 June 1993, OJ no C 166.

• 18 See Inter-institutional Agreement of 20 December 1994, Accelerated working method for official codification of legislative texts, OJ no C 293/2, OJ no C 102/2. See also H. Xanthaki, Drafting Legislation: Art and Technology of Rules for Regulation, United Kingdom, Hart Publishing Ltd. 2014, pp. 333 et seq. “The first set of concrete quality-promoting rules is expressed in the 1992 Sutherland Report […]”.

• 19 European Commission, COM(95) 288/2 final.

• 20 European Commission, COM(1996) 559 final.

• 21 European Governance, COM(2001) 428 final.

• 22 European Commission, COM(2002) 276 final.

• 23 Inter-institutional Agreement 2003 OJ 2003C321/01.

• 24 European Commission, COM(2005) 97 final.

• 25 At the European Parliament plenary discussion on Better Regulation on 4 April 2006, Commission President Barroso acknowledged the need to respond to the varying quality of Commission impact assessments after which the Commission committed itself to establishing the Impact Assessment Board. See S. White, ‘Impact Assessment – Experience from the European Commission’, in K. Bizer, S. Lechner & M. Führ (Eds.), The European Impact Assessment and the Environment, Darmstadt, Springer 2010, p. 71.

• 26 European Commission, COM(2008) 394 final.

• 27 European Commission, COM(2006) 689 final.

• 28 European Commission, COM(2010) 543 final.

• 29 European Commission, COM(2012) 746 final.

• 30 H. Xanthaki, ‘The Problem of Quality in EU legislation: What on Earth Is Really Wrong?’, Common Market Law Review, Vol. 38, 2001, pp. 651-676.

• 31 Voermans 2009, pp. 71-72.

• 32 Baldwin et al. 2012, p. 29.

• 33 Impact Assessment Board Report for 2009, 2010, 2011, 2012, 2013.

• 34 N. Lupo & G. Piccirilli, ‘European Court of Human Rights and the quality of legislation: shifting to a substantial concept of “law”’, Legisprudence, Vol. 6, No. 2, p. 237. The Authors reported the European Court of Human Right’s position on the requirement of lawfulness: “notwithstanding the written or unwritten form of the law, irrespective of its positive or judge-made nature, the actual requirement of lawfulness is the good quality of the internal provision, in terms of its inherent clarity, foreseeability, precision and accessibility”.

• 35 J.C. Piris, ‘The Quality of Community Legislation: The Viewpoint of the Council Legal Service’, in A. Kellermann et al. (Eds.), Improving the Quality of Legislation in Europe, The Hague, Kluwer Law 1998, p. 28. “There are two separate aspects to the question of the quality of legislation: the first aspect, which concerns the substance of the law; the second aspect concerns the form of legislation (the quality of legislative drafting) and how accessible it is to the public”.

• 36 N. Rangone, ‘Il contributo delle scienze cognitive alla qualità delle regole’, in Mercato concorrenza regole, XIV, 1, aprile 2012, pp. 151-166 et seq.

• 37 S. Cassese, ‘La qualità delle politiche pubbliche, ovvero del metodo del governare’, in Atti del Convegno su Rapporto Italia decide 2012-2013, Roma, Camera dei deputati, 11 febbraio 2013, pp. 2 et seq. See also J. Ponce Solé, ‘¿Mejores normas?: Directiva 2006/123/CE, relativa a los servicios en el mercado interior, calidad reglamentaria y control judicial’, Revista de Administración Pública, Madrid, No. 180, septiembre-diciembre 2009, pp. 201-243. The author agrees with this definition of regulatory quality as meta-policy “[…] parece haber un claro consenso en el sentido de que la calidad normativa se refiere tanto a los procedimientos de elaboración (con singular importancia del elemento de la participacion ciudadana real y efectiva) como a los resultados alcanzados […]”.

• 38 C.M. Radaelli, ‘Whither Better Regulation for the Lisbon Agenda’, Journal of European Public Policy, Vol. 14, No. 2, 2007, p. 3.

• 39 Radaelli & Meuwese 2009, pp. 1 et seq. See also A.C.M. Meuwese, Impact Assessment in EU Lawmaking, The Hague, Kluwer Law International 2008, pp. 24 et seq.

• 40 Radaelli 2007, at 3.

• 41 APEC-OECD, First workshop of the Apec-Oecd co-operative initiative on regulatory reform, 19-20 September 2001, OECD Publishing, Paris 2001, p. 15.

• 42 L. Carbone, ‘Qualità della regolazione e competitività: ricette diverse ma ingredienti comuni’, in Seminario su, Tecniche di produzione normativa e ‘better regulation’, Roma, Università La Sapienza, 26 gennaio 2007, p. 3.

• 43 Ibid.

• 44 OECD, Regulatory Reform for Recovery and Growth, Paris 2010, p. 1. “Regulatory reform has been extensively used throughout the OECD to stimulate recovery from crises in the past, without further adding to debts and deficits. In the short term, reform can boost confidence in regulatory systems by showing that governments are committed to improving regulatory quality”.

• 45 European Commission, SWD(2012) 423 final.

• 46 The European Parliament Committee on Industry, Research and Energy (ITRE) has commissioned Copenhagen Economics to carry out a study on the implementation of the so-called Small Medium Enterprises (SME) test in member state and European commission services. In particular, Italy and Greece are among the member states that have not institutionalised the SME test in their impact assessment tools.

• 47 European Commission, COM(2011) 78 final.

• 48 The Conclusions of the European Council, EUCO 79/14, p. 8. The European Council recommended, in respect of regulatory fitness measures, that “Member States should make full use of regulatory flexibility provisions for the benefit of small and medium-sized enterprises in the implementation of EU legislation”.

• 49 M. De Benedetto, M. Martelli & N. Rangone, La qualità delle regole, Bologna, Il Mulino 2011, pp. 11 et seq.

• 50 Radaelli 2007. See also S. Jacobzone, C. Choi & C. Miguet, Indicators of Regulatory Management Systems, OECD Working Papers on Public Governance, OECD Publishing April 2007, p. 19. “In many European Union countries with the Lisbon Agenda, regulatory reform is seen as an instrument to boost competitiveness and growth, to improve the country as a business location”.

• 51 A. Morrone, ‘La qualità della regolazione: per una ricerca nell’esperienza regionale’, in A. Morrone et al. (Eds.), La qualità della legislazione regionale, Bologna, Maggioli Editore, Istituzioni del Federalismo 2011, p. 5.

• 52 C.M. Radaelli et al., The Implementation of Regulatory Impact Assessment in Europe, Paper delivered to the ENBR workshop, University of Exeter 2008, p. 5. W. Voermans & Y. Schuurmans, ‘Better Regulation by Appeal’, European Public Law, Vol. 17, No. 3, 2011, p. 507. “Better regulation has the potential to boost economic growth and increase competitiveness by relieving burdens which come about as a result of legislation […]”.

• 53 M. Bianco et al., ‘Concorrenza e regolamentazione in Italia’, Questioni di Economia e Finanza, No. 123, Aprile 2012, p. 13. Some studies have demonstrated the link between regulatory quality and corruption: the member states that have poor quality – the southern countries – also have a high level of corruption.

• 54 U. Morera & N. Rangone, ‘Sistema regolatorio e crisi economica’, Analisi Giuridica dell’Economia, No. 2, 2013, pp. 383-394.

• 55 S. Salvi, ‘La qualità della regolazione in Italia tra buone intenzioni e modesti risultati: un confronto internazionale’, in A. Natalini & G. Tiberi (a cura di), La tela di Penelope. Primo rapporto Astrid sulla semplificazione legislative e burocratica, Bologna, il Mulino 2010, pp. 61-85.

• 56 P. Parascandolo & G. Sgarra, ‘Crescita e produttività: gli effetti economici della regolazione’, in I. Cipolletta et al. (a cura di), Concorrenza Bene Pubblico, Roma, Confindustria, Editore SIPI 2006, p. 9. See World Bank, Doing Business Report 2008, Washington DC, 2007. Italy and Greece have the lowest Worldwide Governance Indicators – which measures the regulatory quality level – in the EU countries at 15.

• 57 Italian Constitutional Court, Sentence No. 200, 17 July 2012.

• 58 Morera & Rangone 2013, p. 384. See also World Bank, Better Regulation for Growth. Governance frameworks and tools for effective regulatory reform, Washington DC, 2010, p. 1. “[…] indicators of regulatory quality, performance measures of regulatory governance and targets for the reduction of paperwork and administrative burdens have become prominent items on the reform agenda of governments and international organizations”.

• 59 Morera & Rangone 2013, p. 384. See OECD, Reviews of Regulatory Reform – Regulatory Reform for Recovery. Lesson from implementation during crises, Paris 2010, p. 35. “Regulatory reform can play an important role during crisis episodes […]”. See also Rangone 2012, pp. 96 et seq. The Author reminds us that during negative economic trends, the most important states started a new regulatory reform programme. “The Great Depression in the U.S led to an enormous expansion in the scope of public utility and common carrier regulation, and the ‘stagflation’ (…) of the 1970s set the stage for the deregulation movement. Similarly, Europe turned to better regulation policies in 2000 to remedy its sluggish economy. At present, the European Commission points out that the crisis has highlighted the need to address incomplete, ineffective, and underperforming regulatory measures and, in many cases, they need to do so urgently”.

• 60 Morera & Rangone 2013, p. 385.

• 61 Rangone 2012, p. 96.

• 62 H. Xanthaki, ‘European Union Legislative Quality After the Lisbon Treaty: The Challenges of Smart Regulation’, Statute Law Review, Oxford University Press 2013, pp. 15-16.

• 63 A. Alemanno & A. Spina, Nudging Legally. On the Checks and Balances of Behavioural Regulation, Jean Monnet Working Paper No. 06, 2013, pp. 9 et seq.

• 64 K.R. Popper, In search of a Better World, London, Routledge 1994, pp. 4 et seq. “To err is human. All human knowledge is fallible and therefore uncertain”.

• 65 N. Rangone, ‘Errori cognitivi e scelte di regolazione’, in Analisi Giuridica dell’Economia, Vol. 1, 2012, pp. 7-18.

• 66 O. Amir & O. Lobel, ‘Liberalism and Lifestyle: Informing Regulatory Governance with Behavioural Research’, European Journal of Risk Regulation, in A. Burgess et al., Symposium on Nudge, European Journal of Risk Regulation, Vol. 3, No. 1, January 2012, pp. 17 et seq.

• 67 Rangone 2012, pp. 151-166.

• 68 A. Alemanno, ‘Nudging Europe. Why the European Commission Should Include Behavioural Insights in the Design of Regulatory Proposals’, European Voice, 16 May 2012, p. 3.

• 69 Rangone 2012, p. 11.

• 70 F. Di Porto & N. Rangone, ‘Behavioural Sciences in Practice: Lessons for EU Policymakers’, forthcoming in A.L. Sibony & A. Alemanno (Eds.), Nudging and the Law. What Can EU Learn from Behavioural Sciences?, Oxford, Hart Publications 2014, pp. 3 et seq.

• 71 European Commission, Applying Behavioural Sciences to EU Policy-Making, 2013, p. 10. The European Commission suggests: “placing behavioural insights at the beginning of the impact assessment process, in the problem definition section. In this way, individual behaviour can be one of the drivers of a policy problem that a new initiative tries to tackle”.

• 72 F. Di Porto & N. Rangone, Cognitive-Based Regulation: New Challenges for Regulation, in <www.federalismi.it>, No. 20, 2013, pp. 4-6. R. Baldwin, M. Cave & M. Lodge, Understanding Regulation. Theory, Strategy, and Practice, New York, Oxford University Press 2012, pp. 90 et seq. “Risk perception studies are interested in seeking to understand better the individual biases that explain responses to risk”.

• 73 F.M. Calvosa, Interazione professionale e competenze multidisciplinari per una better regulation, Roma, Forum P.A., 9 maggio 2011. “Better regulation requires high competences in the following sciences: sociology, economy, law, public communication and statistics”.

• 74 Radaelli 2004, p. 10. Different stakeholders may have different notions of quality in mind: “[…] the bureaucrat defines quality as a matter of following proper and legitimate procedures in the regulatory process; for the politician, quality may well mean responsiveness to pressure groups or the median voter, or even responsiveness to extend pressure created by the European Union, the International Monetary Fund (IMF) and so on; firms perceive quality in terms of minimization of costs and defines success in terms of profit; citizens use yet another criterion, the effective protection from risk”.

• 75 Baldwin et al. 2012, p. 35. See C.M. Radaelli & A.C.M. Meuwese, Impact Assessment Indicators Measuring. The quality of Impact Assessment, FP6 project Evaluating Impact Assessments (EVIA), 2009, pp. 2-3. “[…] measuring quality is notoriously difficult to realize because of lack of agreement on standards in a country or, in the context of international organisations, across countries; intrinsic problems of operationalisation of concepts it is daunting to image a set of indicators of responsiveness; and lack of useful data”.

• 76 Radaelli & Meuwese 2009, p. 1. Voermans 2009, pp. 60 et seq.

• 77 M. De Benedetto, Maintenance of rules, CREI Working Paper No. 2, 2014, p. 17.

• 78 J.B. Wiener, ‘Better Regulation in Europe’, Current Legal Problems, Vol. 59, Oxford University Press 2006, p. 444.

• 79 Rangone 2012, p. 1; Rangone 2012, pp. 157 et seq.