Regulatory reforms: studying the public official’s point of view
Ekaterina Zhuravskaya
(New Economic School, Professor)
REF: For the session organized by V. Polterovich on reforms.
Summary
In the fall of 2008 the Center of Economic and Financial Research conducted a survey of 1,430 officials in twenty regions of Russia. The goal of the survey was to understand how federal level legislation, which has constituted the core of the debureaucratization and deregulation reform package of 2001-2007, translates on the level of day-to-day implementation and why reform progress differs across regions and agencies. The representatives of six federal agencies (Labor, Tax and Fire Inspection, Rospotrebnadzor, Rostekhnadzor and Roszdravnadzor) and Local Administrations were surveyed. Six questionnaires were designed for control, registration and tax inspections and two levels of subordinates (supervisors and inspectors).
While the majority of respondents indicate positive attitudes toward deregulation reforms they are still not ready for the more radical changes and alterations in the nature of regulation.
The data from this survey were matched with the database from the sixth round of Monitoring of Administrative Barriers Survey (MABS) in Russia implemented by CEFIR in the second half of 2006 which provided an independent measure of regulatory performance. Matching the MABS data from a survey of businesses in 18 regions in Russia with the averages of the responses in the survey of officials from those same regions, we uncover the important role played by human and managerial capital in the regulatory branches of the authorities.
Culture and Subjective Attitudes
We found that the subjective attitudes of individual bureaucrats toward the deregulation reform package can explain some cross-regional variation in how the laws are implemented and enforced. We report that agencies whose representatives indicate wider support toward more liberal regulation also demonstrate better compliance with the legislation of the reform package. While this obstacle to reform progress is not directly policy related, better explanation of the purpose of the reform to inspectors could be beneficial.
Human capital
We found that the quality of regulatory personnel is a very important determinant of the enforcement of deregulation reform. By the quality of personnel we are referring to the level of human capital of that personnel. The most striking result is that up to one half of respondents in some agencies and regions demonstrated poor knowledge of the major provisions of regulatory laws. It is, therefore, not surprising that the inspectors who do not know the exact provisions of the law, for example, on the duration of regulatory procedure or on its exact requirements, enforce this law with violations. We confirmed this conclusion by documenting a positive association between knowledge of the law and law enforcement.
These results emphasize the need for better personnel training programs and special advance courses for the agencies’ staff. While we also report that there is little effect from course participation on the reduction of the prevalence of violations of the law, we find that high quality refreshment courses do have a positive effect on law enforcement.
Outside interests and influences
We find that higher pressure from the representatives of federal branches of the agencies, by representatives of federal, regional and local governments on the inspectors a have positive effect on law enforcement. These results also emphasize the need for more scrutiny of control from the higher authorities over the activities of local offices in regulatory agencies.
We find some evidence of a positive effect from the precision in defining rules of handling the disputes between business representatives and regulatory officials on the law compliance on behalf of government officials. We also find that in the regions where the procedures of reviewing complaints are more effective (irrespective of what the level of authority in charge of dispute resolution is), the regulatory performance is improved. This result could be used as an indication for the need for a better clarification of the dispute procedures and efficient revisions dispute resolutions, as precisely defined dispute rules is an effective vehicle for better compliancy with the law.
Turnover and Personnel Background
We find worse law enforcement in those regions with a higher frequency of new employees coming from the regional government and better law enforcement when the higher share of new employees comes from the federal branches of agencies.
Overall, summarizing our main findings, we can tentatively recommend the following: better control of the knowledge of legislation by government officials and regular evaluations of staff; more rigorous control of the activities of local representatives by higher-level authorities; more precise regulation of conflict resolution between business and regulatory agencies and better revisions of those resolutions by enforcement agencies. Changes in these areas would constitute important additions to the overall package of reforms aimed at the debureaucratization and lowering of administrative barriers in Russia.