Risk and Regulatory Policy

1
Risk and Regulatory Policy

• How do systems of regulatory governance reduce
  societal risk?
• Greg Bounds, Administrator
• Regulatory Policy Division

2
Introduction - outline

• Elements of risk policy
• Why use risk assessment?
• Benefits of a risk based approach
• Problems with risk assessment
• Conclusions
• Further work

3
Elements of risk policy

• Risk assessment
• framing and forecasting
• Risk management action and remedies
• avoidance, reduction, retention, transfer
• Risk review
• critical to effective governance processes
• Risk communication and consultation
• creating transparency

4
Why use risk assessment?

• Allocation of scarce resources
• Improving welfare in a zero sum game
• Costs of the irregular treatment of risk
• Failure to set priorities
• Over regulating
• Unequal treatment
• Trade barriers
• Sources of policy problems
• Interrelated nature of risks
• Risk and the policy cycle
• Timing of risk assessment
• Subjective perceptions of risk
• Communication with the public

5
Benefits of a risk based approach

• More efficient regulatory agencies
• Allocate limited resources to highest risk
• Accountability and performance
• Decision processes reveal sources of success and
  failure
• More responsible societies
• Manage risks at the most effective level of
  society

6
Problems with risk assessment

• Data availability
• Costly, time consuming and rare.
• Public criticism
• Technical complexity
• Spurious accuracy
• Failure in the authorising environment
• Legislative authority and political will
• Timing and co-ordination issues
• Ex post evaluation

7
Conclusion

• Risk assessment can assist in overcoming
  regulatory tensions
• Institutional and practical arrangements
• Political authority gatekeeper role
• Guidance and support
• Monitoring and review arrangements
• Government responses to broader risks
• Lessons from the Canadian proposal

8
Further work

• Workshop is timely
• OECD interest in how Governments are extending
  risk policy tools?
• Role of different agents
• Co-ordination by centralised decision makers
• Legislative directives
• Role of the media
• Obstacles to reform lessons from other areas
• Case studies
• Development of guidance material