Regulatory Reform Process Research Articles

Regulating Laboratory Tests: What Framework Would Best Support Safety and Validity?

Policy Points With increasing public attention to cases of inaccurate and misleading laboratory-developed tests, there have been calls for regulatory reform. To protect patients from faulty laboratory tests, we need a framework that balances comprehensive test review with laboratory flexibility. The Verifying Accurate Leading-edge IVCT [In Vitro Clinical Test] Development (VALID) Act would have helped ensure laboratory test safety and validity through a much-needed expansion of Food and Drug Administration (FDA) oversight. However, Congress did not pass the VALID Act in 2022, forcing the FDA to start the regulatory reform process on its own.

질서행정과 규제개혁

From an administrative law perspective, policing does not only refer to the police in the formal sense, but to administrative actions that are practiced for maintaining order in various areas. However, as order administration is carried out in many administrative areas, regulations will expand accordingly for the purpose of risk prevention. As a result, there will be an increase in the infringement of fundamental rights of individuals. Even if regulations have traditionally been aimed at preventing risks, the purpose of regulations today is not simply about control. It also serves to guide the direction for development of society and functions as a driving force. In order to prevent risks, it is necessary to find ways to promote social and public utility by allowing t is study suggests the following directions for regulatory reform in order administration.
 First, checking the viability of regulations based on the unnecessity of regulations should be prioritized rather than strengthening regulations to expand the purpose of regulation. Second, unclear and unpredictable regulations should be clarified with regulatory reform. Third, regulations should comply with the principle of proportionality. In regulatory reform, the principle of proportionality should be applied to determine whether a regulation should be deregulated or strengthened. Fourth, the criteria, procedures, and methods to be considered in the regulatory reform process should be fully discussed in advance. The relevant procedures and methods should be designed to prevent arbitrary and subjective judgment on individual regulations in exceptional circumstances. Fifth, judicial control should be strengthened when active administrative actions for risk prevention and control are expanded. Sixth, the social costs of regulation should be fully examined.

Regulatory Reform Outcomes and Accelerated Regulatory Pathways for New Prescription Medicines in Australia

National Regulatory Authorities (NRAs) globally are facing the challenge of evaluating pharmaceutical products in a speedy manner, whilst simultaneously ensuring adequate efficacy, safety and quality of approved products. Additionally, common expectations include that the evaluation process is competent, flexible, commensurate with risk, efficient and rapid. In 2014, the Australian regulatory system was out of step with global regulatory developments which led to a comprehensive regulatory review and reform process. As part of the reforms, two Facilitated Regulatory Pathways (FRP) were developed for prescription medicines: Priority Review (PR) and Provisional Approval (PA). Furthermore, regulatory reliance and recognition arrangements have been expanded with the Therapeutic Goods Administration (TGA) making increased use of evaluation reports by trusted NRAs. The new pathways have been utilised by the pharmaceutical industry in Australia since 2017, with the number of medicines going through these pathways gradually increasing. Additional facilitated pathways have been developed following the review, providing alternatives to the standard pathway for registration of prescription medicines in Australia. The reform is timely, helping to position Australia well in the current global regulatory climate.

Comparative Study on Quality Characteristics of International Accounting Standards and Chinese Accounting Standards

Whether accounting information can meet the needs of users depends on the quality of accounting information. The internationalization level of accounting standards reflects the degree of integration of a country's economy with the world. With the development of economic globalization and rapid progress of science and technology, the market economy is becoming more and more active. Meanwhile, the trade between various countries is becoming more and more frequent, which promotes the economic and trade cooperation between various countries. The demand for international convergence of accounting standards is becoming increasingly strong, and the relevant concept arises at the historic moment. In order to make the cooperation between countries more convenient and fast, countries began to integrate into the financial regulatory framework reform process of cooperation, and strive for the global unified high-quality accounting standards can be completed in a timely manner. This paper compares and analyzes the differences between Chinese and international accounting standards in terms of information quality characteristics from two aspects of content and level, summarizes the convergence and development trend of international accounting standards, and puts forward some suggestions for China to formulate accounting standards.

Regulatory Abdication in Practice

“Meta-regulation” refers to deliberate efforts to induce private firms to create their own internal regulations—a regulatory strategy sometimes referred to as “management-based regulation” or even “regulation of self-regulation.” Meta-regulation is often presented as a flexible alternative to traditional “command-and-control” regulation. But does meta-regulation actually work? In her recent book, Meta-Regulation in Practice: Beyond Normative Views of Morality and Rationality, Fiona Simon purports to offer a critique of meta-regulation based on an extended case study of the often-feckless process of electricity regulatory reform undertaken in Australia in the early part of this century. Yet neither Simon’s case study nor her book overall succeeds in undermining the rationale for using meta-regulation. In this review essay, I highlight the many limitations of Simon’s argument. I show how, in making existing scholarship her foil, Simon mischaracterizes what regulatory scholars have had to say about meta-regulation. Not only does Simon misleadingly make scholars out to be naive and overly optimistic about what can be expected from meta-regulation, but she also ignores entirely the peer-reviewed empirical research that shows that meta-regulation can work. She also misstates what existing work has to say about the mechanisms that can make meta-regulation effective. The most significant problem with Simon’s book, though, is that the case study she presents in her effort to criticize meta-regulation theory does not actually describe a strategy based on meta-regulation. Rather, it shows Australian electricity regulators as passive, defensive, and weak. What Simon’s book actually offers is a detailed case study of regulatory abdication in practice.

Digital economy: Basic aspects and the case of Serbia

The global economy, strong competition, changing the nature of the workforce and consumer sophistication have influenced the need to transform the traditional economy into a digital economy, as a new phenomenon that permeates almost all economic and social processes in one society. The aim of the research is to point out the nature and characteristics of the digital economy, as well as its achieved level of development in the Republic of Serbia. The digital economy, showing its global nature, "leaked" to us, and the very process of digitization by the government was set as one of the three pillars of Serbia's development (in addition to economic growth and education). Using case-study method we found that Serbia is still very far from a massive digital lifestyle. Engaging in an ambitious regulatory reform process in the field of telecommunications: all digital services, applications and content depend on the availability of fast and secure infrastructure.

Economic and Efficiency Analysis of China Electricity Market Reform Using Computable General Equilibrium Model

China’s electricity industry has been undergoing a process of regulatory reform. This study aims to analyse the impact of liberalization on the electricity market assuming different degrees of scope of the reforms by applying a computable general equilibrium (CGE) model. In this paper, we consider the three sub-sectors of the electricity industry, namely generation, transmission and distribution. We assume that the reform will phase out the entry barriers on the generation side and allow for competition on the distribution side, while keeping the transmission side under regulation. The results showed that the reform could enhance efficiency in the electricity sector and reduce energy prices for households. Introduction of a complete competition model would decrease welfare by 5.394 billion yuan, if contrasted to a limited competition model. The composite energy price would decline under both scenarios, whereas the quantity of energy consumed by the households would go up. This research, thus, contributes to literature on the economic effects of China’s electric power market reform, and can be used as a case study to support policy decisions for the decision-makers.

The Evolution of Banking Regulation Since the Financial Crisis: A Critical Assessment

Following the 2008 financial crisis a major process of regulatory reform of the banking industry took place with the aim of increasing the resilience of the financial system. More specifically, the regulatory changes introduced after the financial crisis were aimed at pursuing three main objectives: (i) improve the resilience of individual banks, thereby reducing the risk of financial institutions to fail, (ii) improve the resilience of the financial system as a whole, limiting the risk of spillovers to the broader economy that would be triggered by the failure of large financial institutions, and (iii) reduce the risk for taxpayers to bear the cost of future banking crisis. Starting from an exam of the main weaknesses of the banking regulatory framework highlighted by the financial crisis, this paper provides a detailed analysis of the Basel 3 reform, its main goals, timing and technical features. It then examines the more recent revisions of the Basel 3 framework - often called “Basel 4” - and the new requirements associated to bank resolution policies, i.e. the “total loss absorbing capacity” (TLAC) and the “minimum required eligible liabilities” (MREL). These regulatory reforms are then critically discussed, both though the analysis of their impact on the banking industry, and with recourse to the available empirical evidence. This evidence shows that the banking industry did register a significant increase in the amount and quality of equity capital, mostly achieved through capital increases, and in liquidity. This led to a decrease in the probability of future large banks defaults and in the incentive for banks to take on excessive risks. Also, by introducing bail in mechanisms for banks’ liabilities, these reforms reduced the likelihood of future crisis being supported by taxpayers via government bail outs. However, a number of threats are still being faced by the banking industry. These include profitability, a necessary condition for a bank to be sustainable over time, the sovereign-banks “doom loop”, and the possibility of future recessions, as banks’ safety and soundness is inevitably linked to the state of the economy.

(A Study on Japan's Regulatory Reform in the Era of Low Growth)

Korean Abstract: 본 보고서는 일본 아베 내각이 성장전략 일환으로 추진 중인 규제개혁을 분석하여 우리 정부가 참고할 수 있는 검토사항을 제시하려는 목적에서 작성되었다. 그런데 아베노믹스의 규제개혁 과정을 사실 확인 차원에서만 점검하는 것은 저성장시대에 규제개혁이 갖는 본질을 간과한다고 보고, 2000년대 초·중반 고이즈미 내각이 중점 추진한 사회적 규제에 대한 개혁이 갖는 의의를 살펴보는 작업부터 시작하였다.제2장, “일본 규제개혁의 전개과정”에서는 규제를 경제적 규제와 사회적 규제로 구분한 다음, 2000년대 초·중반 고이즈미 내각이 저성장 패러다임에서 벗어나기 위한 정책적 수단으로서 왜 사회적 규제개혁에 주목하였는지에 초점을 맞추고 있다. 분석 결과는 아래 3가지로 요약할 수 있다.첫째, 2000년대 들어 일본 정부는 경직된 시장을 경쟁구조로 전환하고 새로운 시장을 창출하기 위해서는 사회적 규제에 대한 개혁이 필수적이라는 인식을 갖게 되었다. 사회적 규제는 소비자·중소기업·농민·환자 등 사회적 ‘약자’ 보호와 과당경쟁 방지, 미풍양속 보호 등을 명분으로 삼고 있으나 실제로는 경제적 규제의 성격도 강하다는 인식이었다. 이러한 사회적 규제의 탈을 쓴 경제적 규제는 농업, 의료·복지, 교육, 사법과 같은 분야에서 횡행하고 있는데, 이들 규제를 단순히 완화하거나 철폐하는 것이 아니라 정부의 재량적 규제를 사업자 간 공정경쟁을 보장하는 사후적 규제로 전환하는 규제개혁을 추진하자는 것이었다. 둘째, 아베노믹스의 규제개혁은 사회적 규제개혁에 초점을 맞춘 고이즈미 내각의 규제개혁을 계승하여, 의료·보건, 고용, 농업 3분야에 집중하고 있다. 의료·보건 분야에서는 혼합진료 확대, 일반 의약품의 일반 소매점 판매 허용에 이은 인터넷 판매 허용, 고용 분야에서는 노동자 파견제도 개선, 농업분야에서는 기업의 농지 임대 허용에 이은 농지 취득 관련 규제완화 등 이른바 ‘덩어리규제’ 개혁에 매진하고 있다. 셋째, 아베노믹스의 성장전략이 제시하고 있는 규제개혁은 일종의 ‘사회적 실험’으로서 지역단위와 기업단위의 규제개혁을 병행하고 있다는 점이 특징이다. 규제개혁의 효력 범위를 전국 또는 전국민으로 보는 일반적 규제개혁 외에도, 지역 단위의 국가전략특구 제도를 병행하는 이유는 일반적 규제개혁이 갖는 단점, 즉 경제적 파급효과는 지대하지만 규제개혁 대상 분야의 이해당사자 간 합의 지연 문제를 보완하고자 하는 데에서 찾을 수 있다. 기업 단위의 기업실증특례제도를 병용하고 있는 이유는 일반적 규제개혁처럼 법률개정이 아닌 시행령이나 시행규칙에 특례를 도입하여 기업의 신사업 계획을 시의적절하게 지원하고자 하는 데 있다.(후략)English Abstract: This report analyzes the Japan’s regulatory reform, which constitutes the core of the Growth Strategy of Abe Cabinet, to present policy implications toward the Korean government. Chapter 2 examines the significance of social regulation reforms conducted by the Koizumi Cabinet in the early and mid-2000s and figures out that the regulatory of the Abe Cabinet is composed of ‘General’ regulatory reform, regional-level regulatory reform, and enterprise-level regulatory reform. Chapters 3 and 4 examine the progress made in these three types of regulatory reforms. And Chapter 5 analyzes the regulatory reforms of the Korean government in terms of the framework of regulatory in Abenomics.Chapter 2, Development Process of Japan's regulatory reform outlines why the Koizumi Cabinet emphasized social regulation as a policy tool to overcome low growth. The results can be summarized as:First, since the early 2000s, the government became aware that the of social regulations with strong economic characteristics, prevailed in agriculture, medical and welfare, education and jurisdiction areas was essential to revitalize the markets. However, they did not simply intend to deregulate or abolish the regulation but to transform the regulations, which were arbitrary in nature, to Ex-post facto regulation or rule-based regulation. Second, regulatory reforms of the Abe Cabinet focus mainly on three sectors: medical and health care, employment and agriculture which followed up on reforms of the Koizumi cabinet. The government strived to several areas in each sector, for example, expanding the scope of mixed medical treatments (kongoshinryou: A combination of insured and uninsured medical treatments) and allowing retail and online sales of OTC (Over-the-Counter) drugs in the medical sector, improving worker dispatch system in the employment sector, and allowing enterprises to buy farmland in the agricultural sector. Third, the regulatory presented in Abenomics has promoted the regional and enterprise levels of regulatory reforms as social experimentation. The National Strategic Special Zone system has been introduced as a regional-level to make up for the weaknesses of the general regulatory such as difficulties in reaching a consensus among stakeholders. And in the enterprise-level reform, the government promoted the Corporate Special Regulatory Exemption system (Kigyouzissyoutokurei seido) which introduces special ordinances and enforcement acts rather than a full revision of the law, in order to effectively support the companies’ new business plans.

The Impact of the Regulatory Reform Process on the R&D Investment of European Electricity Utilities

AbstractThe aim of this paper is to provide deeper insights into the impact of regulatory reforms and privatization on the R&D spending of electricity utilities. Building on a novel panel data set including the biggest European utilities from eight EU countries over a period from 1985 to 2010, we find that the overall influence of the European regulatory reform process on R&D investment is ambiguous. The empirical evidence indicates that the approaching liberalization process, i.e., nearing competition, has a dampening effect on R&D spending. Utilities reduce their expenses due to increased uncertainties and additional risks. However, once the market and regulatory framework conditions have been set up and firms have become used to the new situation, higher levels of competition positively influence R&D and former incumbents invest more in order to “escape” from the competition. Moreover, we find no indication that (ownership) unbundling and incentive regulation directly affect the research expenditures of the utilities. In contrast, the privatization of utilities seems to have strong negative consequences for their amount of R&D spending.

Measuring and Explaining Regulatory Reform in the EU: A Time Series Analysis of Eight Sectors, 1984-2012

Over the last three decades, EU regulation of the internal market has become highly pervasive, affecting practically all the domains of European citizens’ lives. Many studies have focused on understanding the process and causes of regulatory reform. However, these have typically been small-scale or small-n studies, with no or limited attempts to analyse the more general sources of regulatory reform. In this paper, we focus on the determinants of stability and change in EU regulation. We develop an original dataset of 169 pieces of legislation (regulations, directives and decisions) across eight different sectors, and analyse the dynamics of regulatory reform in the EU. Using time series analysis of count data, we find evidence that the number of winning coalitions in the Council and the size of EU membership have a significant impact on regulatory reform in the EU. However, the political (left-right) composition of EU’s legislative bodies has no significant impact on the process of regulatory reform.

Regulating finance after the crisis: Unveiling the different dynamics of the regulatory process

AbstractIt is now widely recognized that regulatory failures contributed to the onset of the global financial crisis. Redressing such failures has, thus, been a key policy priority in the post‐crisis reform agenda at both the domestic and international levels. This special issue investigates the process of post‐crisis financial regulatory reform in a number of crucial issue areas, including the rules and arrangements that govern financial supervision, offshore financial centers and shadow banking, the financial industry's involvement in global regulatory processes, and macroeconomic modeling. In so doing, the main purpose of this special issue is to shed light on an often understudied aspect in regulation literature: the variation in the dynamics of regulatory change. Contributors examine the different dynamics of regulatory change observed post‐crisis and explain variations by accounting for the interaction between institutional factors, on the one hand, and the activity of change agents and veto players involved in the regulatory reform process, on the other.

Using covenants in loan agreements to promote tariff reform

This paper evaluates efforts made by development banks to promote tariff reform using covenants in infrastructure loan agreements. These covenants are evaluated within the broader context of tariff regulation in the water supply and sanitation sector. The paper outlines prerequisites for effective tariff regulation and reviews the experience with tariff regulation in developing countries and the current thinking regarding regulatory reform. Efforts by development banks to promote tariff regulation using loan covenants are often misdirected in light of the complexity of tariff regulation and the regulatory reform process.

The Mortgage Foreclosure Rage: A Behavioral Perspective

Residential real estate foreclosures reached historic records since the 2008 recession in the United States. While other studies on mortgage defaults and foreclosures focus primarily on individual causal factors leading to the outcome, this paper explores the nature and origins underlying these factors from a behavioral perspective. We argue that: (i) failures in mortgage risk management were due to overconfidence, anchoring, and reference-dependence given constraints in quantitative measurements in inter-temporal terms in a reductionist system; (ii) mortgage derivatives with outsized volume made the lending system dependent on a wider range of externalities with significant ramifications, and thereby more fragile given its misleading assumptions of uncorrelated rather than correlated market behavior; (iii) residential mortgage-backedsecurities (MBS) created illusions of control among market participants due to mental framing, myopia, and other limitations of human cognition; (iv) psychological biases were influenced by product design and lending procedures that promote short-term profits unsuited for a home mortgage; (v) product complexity reduces transparency, intensifies ambiguity aversion, self-serving biases, and default contagion that ultimately led to market breakdown and massive foreclosures. This study contributes to the theories in finance and economics through applications of behavioral measures to current market dynamics. It aims to reveal an idealized but biased system given human characteristics leading to failures in the financial and related industries and to inform policymakers on involuntary consequences in the development of home mortgage products that demand more profound reflections in the regulatory reform process.

Three Years and Counting

“Giving regulators the tools to foresee and prevent another crisis will require more vision and ingenuity than we’ve witnessed thus far in this long, drawn-out regulatory reform process.”

A Critical Juncture in the Regulatory Reform Process

“The importance of these regulatory initiatives was brought sharply into focus by the market turbulence witnessed in May.”

The Implications of Solvency II for U.S. Insurance Regulation

Much work has been done in recent years on the subject of insurance regulation and capital requirements, and the process of regulatory reform will continue. It behooves insurance supervisors to take a step back, revisit the underlying assumptions that have driven supervisory reform in the various sectors, and assess what implications, if any, their conclusions have for future work. The use of internal models to establish regulatory capital requirements cannot and should not disappear. However, they must be used appropriately, with recognition of their significant limitations. The optimal structure of insurance supervision is likely to be a combination of a rules-based and a principles-based approach. That is, internal models should be an adjunct to a rules-based capital requirement that establishes a floor for regulatory capital. Capital regulation is a necessary, but not sufficient, additional requirement for effective financial regulation. On-site examinations, offsite analysis of financial performance and trends, and frequent interaction with the regulated entity are equally important. Finally, current developments have demonstrated that market discipline cannot be relied on as a substitute for regulation and supervision. The optimal regulatory structure is one that encourages supervisors to take action when it is appropriate, and a system that incorporates duplicative regulatory oversight may advance that objective. About the Author: Therese M. Vaughan is the Chief Executive Officer of the National Association of Insurance Commissioners (NAIC). As CEO, Vaughan oversees the operations of the NAIC, including offices in Kansas City, Washington, D.C. and New York City. She also serves as the Association's primary representative and chief spokesperson in Washington, D.C. Formed in 1871, the NAIC is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. Vaughan previously served as Robb B. Kelley distinguished professor of insurance and actuarial science at Drake University. Vaughan holds a Ph.D. in managerial science and applied economics from The Wharton School at the University of Pennsylvania.

Regulatory Failures and Regulatory Solutions: A Characteristic Analysis of the Aftermath of Disaster

This article analyzes the regulatory reform and implementation process in Australia following three event clusters: an industrial explosion, recent terrorist attacks, and a corporate collapse. The research employed a characteristic analysis where the compliance challenge on the ground is understood as affected not only by the enforcement efforts of the regulator, but also the reform process and the structure of the industry concerned. In each of the cases studied, preferred reforms could be understood as “metaregulatory” and framed around outcomes, principles, and processes rather than a preoccupation with adherence to prescriptive rules. Metaregulation was seen as the most appropriate regulatory framework to maintain the integrity between regulatory goal, regulatory regime, and compliance behavior. Yet, reform pressures that shaped the causal narrative associated with the particular risk, the emotional work involved in compliance, and success strategies of sites all affected what risks were actually reduced and hence the likelihood of a repeat disaster.

The Essence And Role Of Regulatory Reform

This paper presents the essence and the role of regulatory reform in the processof regulations in economy doing by government. The article analyses the theoretical aspectsaccording to the stages of regulatory reform, such as: deregulation, regulatory qualityimprovement, regulatory management. Regulatory reform can help address regulatorydeficiencies that negatively affect the overall competitiveness of firm on the national orinternational place. We consider, that the complex approach of the regulatory reform process,with the involvement of public authorities and the representatives of the private sector, willcontribute substantially at the reduction of the barriers in the lasting development and willcreate real premises of the economic increase of the country.

Labour use efficiency in the Indian and Pakistani commercial banks

The Indian and Pakistani banking industry is said to have an excessive use of labour due to the significant market share of government owned banks. Both countries have undertaken a process of regulatory reform to bring about market discipline in the usage of inputs and to increase the labour use efficiency and productivity. The focus of this paper is the estimation of productivity and efficiency of labour use in the banking sectors of the Indian sub-continent. The results show that the efficiency of labour use across the Indian sub-continent is improving over time and that foreign banks are more efficient compared to domestically owned banks in their usage of labour.