Measuring the Quality of Regulation: Organizational Processes and Performance Assessment

Abstract

The adoption of cross-country measures of regulatory performance in international organizations is problematic: explicit measurement alters the power relationship between international bureaucracies and national delegates; rankings presuppose common benchmarks of regulatory reform across countries; and ultimately regulatory quality means different things to different governments. This paper looks at the processes of formulation of regulatory indicators inside the European Commission and the OECD. We start from a puzzle: the OECD has produced four waves of regulatory management indicators, whilst the Commission and the member states of the European Union have never adopted a common system of indicators, although the European Union is much more integrated than the OECD. This cannot be explained by the different propensity for performance measurement: the European Union has adopted a high number of indicators in many policy areas, thus it is not an indicators-averse organization. Drawing on process tracing, we explain the paradox by considering two classes of variables: (a) the structural properties of the two organizations and (b) the mechanisms underpinning the processes of indicators construction and adoption. Although the first class of variables (structural properties) has explanatory leverage, it explains only part of the story. The second class of process-related variables has received scant attention, yet it gives insights on the mechanisms of regulatory indicators production and the interaction between national delegates and international organizations. The findings contribute to the literature on diffusion, policy learning, and regulation.