CUTTING RED TAPE

Abstract

9 Summary Administrative burden reduction policies are a priority on the political agenda. The removal of measures of direct state control constitutes the main source of regulatory improvement between 1998 and 2003. Now the emphasis falls on measures to remove barriers to trade, investment and entrepreneurship. This puts administrative simplification in the broader context of policies to enhance performance and productivity. There is a risk that administrative regulations that are outdated or poorly designed could impede innovation and establish barriers to entry, creating unnecessary barriers to trade, investment and economic efficiency. Administrative burdens refer to regulatory costs in the form of asking for permits, filling out forms, and reporting and notification requirements for the government. Red tape is particularly burdensome to smaller businesses and may act as a disincentive to new business start-ups. These effects are more costly in global markets, where business competitiveness can be affected by the efficiency of the domestic regulatory and administrative environment. A complete halt to regulation is not a viable option. The solution lies in the adoption of rigorous regulatory quality programmes, to create regulations that meet quality standards.