OECD urges Chile to adopt better regulation practices

26 Apr 16

Chile is missing out on potential economic growth and social wellbeing as a result of weak regulation, the OECD has warned.

 

The think-tank identified a lack of good practice in Chilean rule-making that shows the country is not making the most of regulation as a key lever of growth and wellbeing.

“High quality regulation leads to better productivity and more inclusive growth,” explained OECD secretary general Angel Gurría. “Chile should make it a priority to improve its regulatory framework to help achieve its economic and social goals.”

The OECD’s report found that currently Chile lags behind the OECD average in assessing the impact of regulations, consulting with outside parties on their design, and evaluating them over time.

Most regulators in Chile work without having any clear evidence that regulation is the best way for government to intervene, the report said, and good practice in rule-making is “limited”.

The OECD said one of the most substantial weaknesses in the country’s regulatory framework is the lack of a regulatory oversight body, with the rule-making process currently managed by different government departments with no overall supervision.

Chile would “benefit significantly” from the creation of an agency to oversee this, and ensure regulation is made within a formal, binding and consistent whole-of-government approach, with clear objectives and quality standards for the preparation of laws.

This should include compulsory consultations, forward planning, plain language drafting and provisions for transparency and accountability, it said. 

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