Risk and Regulatory Policy
Improving the Governance of Risk
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- Table of Contents
- List of Abbreviations
- Executive Summary
Chapter 1. Challenges to Designing Regulatory Policy Frameworks to Manage Risks
- + Introduction
- + 1.1. Challenges to a coherent risk policy
- + 1.2. Steps towards the development of better risk assessment processes
- + 1.3. Challenges to the co-ordination of risk-based regulation
- + 1.4. Improving the design of risk-based approaches: implications for regulatory policy
- + Annex A.A1. Framing Risk in the Public Sector
- Annex 1.A2. Risk Policy in Practice
Chapter 2. Risk Regulatory Concepts and the Law
- + 2.1. Risk regulatory concepts and the regulating of public administration
- + 2.2. The different areas in which risk regulatory concepts are being used
- + 2.3. Defining risk regulatory concepts
2.4. Why have risk regulatory concepts been criticised?
- Risk regulatory concepts are technically inaccurate
- Risk regulatory concepts distort decision making
- Risk regulatory concepts are open to abuse
- Risk regulatory concepts do not effectively regulate administrative power or hold decision makers to account
- Risk regulatory concepts are normatively objectionable
- Reflecting on these criticisms
- + 2.5. Risk regulatory concepts and the role of law: a descriptive account
- + 2.6. Law is a form of legal culture
- + 2.7. Law and the constituting and limiting of public administration
- + 2.8. Accountability mechanisms and the challenging of decisions
2.9. A framework for a critical and contextual approach to risk regulatory concepts
- Why are risk regulatory concepts being deployed or promoted?
- What models of good public administration are being promoted by risk regulatory concepts?
- What disciplines are needed for the operation of risk regulatory concepts?
- What is the role of law in the operation of risk regulatory concepts?
- What does experience with risk regulatory concepts tell us?
Chapter 3. Strategic Issues in Risk Regulation and Risk Management
- + Introduction
- + 3.1. The implications of regulatory science for risk management
- + 3.2. Regulatory science and trans-science: scientific analysis versus popular perception
- 3.3. Towards procedural rationality when facing uncertainty
- 3.4. The core concepts of risk analysis and management: risk, uncertainty, and probability
- + 3.5. Decision rules when deciding under uncertainty
- 3.6. The precautionary approach: an idea in search of a definition
- + 3.7. The precautionary principle: policy implications
- + 3.8. The lessons for risk analysis and management
- 3.9. Institutional implications: avoiding separating risk assessment and risk management
3.10. Differences in risk perceptions and in regulatory regimes
- The risk from overestimation of low-probability events: Distorting the public policy agenda and the public policy responses
- Addressing political tradeoffs
- Towards a more coherent approach to risk regulation and management: International co-operation, regulatory impact assessment and education and training
- + Conclusion
- Annex 3.A1. Recent Trends in the Theory of Decision Making: Towards Procedural Rationality
Chapter 4. Risk Regulation and Governance Institutions
Chapter 5. Management-based Regulation: Implications for Public Policy
- + 5.1. Management-based regulation in the regulatory toolkit
- + 5.2. Conditions for the use of management-based regulation
- 5.3. Does management-based regulation work – and why?
- 5.4. Designing effective management-based regulation
- 5.5. Regulatory impact analysis and management-based regulation
- 5.6. Implementing management-based regulation: a changing government role?
Chapter 6. Risk-based Regulation: Choices, Practices and Lessons Being Learnt
- + Introduction
6.1. What is risk-based regulation?
- The key motivations for adopting risk-based approaches
The main elements of risk-based approaches to regulation
- Table 6.1. Financial services: comparison of the risk-based frameworks of FSA, APRA and DNB
- Table 6.2. Environment: comparison of the risk-based frameworks of EA, EPA and IGAOT
- Table 6.3. Food: comparisons of the risk-based frameworks of the UK Food Standard Agency and the Food Safety Authority of Ireland
- Table 6.4. Health and safety: the UK Health and Safety Executive’s Field Operations Directorate framework for non-hazardous activities
- + 6.2. Designing risk-based frameworks
6.3. Risk assessment in practice
- Collecting and managing data
- Performing risk assessments
- Internal governance of the risk-based system
- What do regulators use their risk-based frameworks for?
- Performing inspections in risk-based frameworks
- + Compliance/enforcement policies and risk-based frameworks
- + 6.4. Evaluation of risk-based frameworks
- Annex 6.A1. Methodology
- Annex 6.A2. Questionnaire Used for Semi-structured Interviews
- Annex 6.A3. Outline of the Different Risk-based Inspection Systems Included in the Research
Chapter 7. Why Governments Need Guidelines for Risk Assessment and Management
- 7.1. Zero risk is not an option: toward an optimal portfolio of risks
- 7.2. Making risk assessment formal and explicit
- 7.3. Consideration of full distribution of outcomes, and of controversies on evidence
- 7.4. Addressing gaps in knowledge
- 7.5. Weighing costs and benefits of risk management
- 7.6. Transparent decisions, based on consultation
- 7.7. A whole-of-government approach
- 7.8. Open government builds trust
- 7.9. Stakeholder participation, especially to cope with innovation
- 7.10. Improving the capacities of governments for the systematic assessment, management, and communication of risk
We expect governments to protect citizens from the adverse consequences of hazardous events. At the same time it is not possible or necessarily in the best interest of citizens for all risks to be removed. A risk-based approach to the design and implementation of regulation can help to ensure that regulatory approaches are efficient, effective and account for risk/risk tradeoffs across policy objectives. Risk-based approaches to the design of regulation and compliance strategies can improve the welfare of citizens by providing better protection, more efficient government services and reduced costs for business. Across the OECD there is great potential to improve the operation of risk policy as few governments have taken steps to develop a coherent risk governance policy for managing regulation.
This publication presents recent OECD research and analysis on risk and regulatory policy. The chapters discuss core challenges today. They offer measures for developing, or improving, coherent risk governance policies. Topics include: challenges in designing regulatory policy frameworks to manage risks; different cultural and legal dimensions of risk regulatory concepts across OECD; analytical models and principles for decision making in uncertain situations; key elements of risk regulation and governance institutions; the use of management-based regulation to help firms make risk-related behavioural changes; an analysis of the risk-based frameworks of regulators in five OECD countries (Australia, Ireland, Netherlands, Portugal, United Kingdom) and across four sectors: environment, food safety, financial markets and health and safety; and the elements for designing formal guidelines for risk prioritisation, assessment, management and communication.