Regulatory Impact Assessment (RIA)
(From Welch, 2004)

What is it?
Regulatory Impact Assessment is a tool developed by the Cabinet Office, which aims to improve the chain of causality between evidence and advice. It is a methodology for designing precise, targeted regulations that achieve legitimate policy aims with the minimum burden on those affected.

When is it used?
RIAs must be completed for all policy changes, whether European or domestic, which could affect the public or private sectors, charities, the voluntary sector or small businesses. It is for use throughout the policymaking process, although it is particularly important that it is used at the beginning as it will help you to develop better policy.

How does it work?
It provides users with a guide designed to address the main stages of the development of a good quality policy. These stages include a thorough analysis of the full range of options available to government for addressing a policy problem, and a calculation of the costs and benefits to ensure that new measures are fully justified. The box below shows the typical RIA steps.

What are the benefits of using the RIA?
Among the benefits of using a methodology such as RIA, the following can be highlighted:

• Improving the quality and efficiency of government interventions
  
• Enhancing competitiveness
  
• Increasing transparency and accountability
  
• Reducing opportunities for corruption
  
• Producing a tool for policy monitoring and evaluation

What are the challenges attached to using the RIA?
Some of the challenges that might be encountered when implementing an RIA are:

• Lack of awareness and acceptance of RIA within government and civil society
  
• Institutional capacity within developing country governments (lack of staff with the requisite training, overall lack of resources)
  
• Problems of data availability
  
• More generally, a lack of a coherent, evidence-based and participatory policy process within developing countries - policies are often made by the minister, after consultation with one or two advisors

The RIA and changes in the policy environment
Although a RIA is a tool, its correct implementation requires and will lead to important changes in the institutional and policy environment - in addition to resource and capacity/skills issues. The introduction of a formal RIA system in any country usually involves a shift in the balances of power along three dimensions, i.e. between:

• Institutions at the centre of government - as a consequence, its use needs to be coordinated across the central ministries of government
  
• The centre of government and line ministries - the RIA can act as a break on the regulatory activities of line ministries, which could result in resentment; it is therefore important that it is managed carefully
  
• Ministers and officials - the RIA can act as a break on the governing activities of ministers and force them to use a more creative approach than they are used to; it is therefore important that it is managed carefully

Example
Using the RIA methodology in Uganda, a DFID-funded project has had to deal with the challenges mentioned above. The project team is working closely with various actors in the Ugandan government to ensure that RIAs are accepted by and useful to Ugandan policymakers and officials.

The RIA implemented in Uganda is considerably simpler than those carried out in the UK or other developed counties. It takes into account the lack of resources and data and the existence of institutional and private barriers to change. However, RIAs, like other evidence-based policymaking tools, cannot address the entire policy process. Also needing to be addressed are: setting the agenda and initiating the policy process; identifying key policy problems and prioritising expenditure as well as policy approval by political actors; and the monitoring and evaluation of implemented policies.

For more information

• Cabinet Office's Regulatory Impact Assessment Guidance [external website], updated in 2005. This provides background information on the meaning and purpose of RIAs, and step-by-step guidance on the procedure for preparing and presenting them.

Sources

• Cabinet Office Regulatory Impact Assessment Guidance website [external website]
  
• Court, J., E. Mendizabal and J. Young 'Structured Policymaking on M/SMEs in Egypt', ODI Background Paper for IDRC.
  
• Shaxson, L. (2005) 'Is your Evidence Robust Enough? Questions for Policymakers and Practitioners', Evidence and Policy: A Journal of Research, Debate and Practice, Vol. 1, No. 1, pp101-11.
  
• Welch, D. (2004) Introducing Regulatory Impact Assessment (RIA) in Developing Countries: The Case of Uganda, London: Bannock Consulting.
  

• View this tool as pdf ( 45kb)

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