Moving Away From Total Control in Former Communist Countries – the RRR in Inspections, and Lessons Learned from Reforming them

Abstract

Former Soviet republics and other countries of the ex-Communist “block” may seem unlikely places to look for inspiration in “better regulation”. In fact, their experience in moving away (with varying degrees of success) from an approach based on “total control” and complete risk-aversion (an absolute RRR, as it were) may be an opportunity to get many insights. Data from surveys conducted by the World Bank Group allows to shed light on trends in regulatory delivery, and in particular in inspections, which is the primary way in which the RRR is felt by businesses. This paper describes the starting situation, analyses the reform processes and their outcomes, and attempts to draw some lessons – as well as some comparisons with situations and experiences in EU and OECD countries. Tentative conclusions suggest both that addressing the inspections and control issue (and not just regulations themselves) is crucial to success in reform, and that reducing the “pressure” from total control through a “risk-focused” approach leads to real improvements in the business climate without negatively affecting public safety.