World Bank Report Dutch Administrative Burdens 2008
Review of the
and Peter Ladegaard
The World Bank Group
This note is a progress assessment of the Dutch government’s recent regulatory reform ini-
tiatives. The assessment is carried out in light of the World Bank Group’s 2007 examination
of The Netherlands’ 2003–2007 Administrative Burdens Reduction Programme. It is based on
documentation provided by the Dutch Government’s Regulatory Reform Group as well as in-
terviews with Dutch officials in July and September 2008.
Major findings of the 2007 review 2. Broadening the regulatory reform focus from
a focus on administrative burdens towards the
The World Bank Group’s 2007 review concluded broader impacts of regulation, and building on a
that the Dutch regulatory reform programme was the strengthened system for Regulatory Impact As-
world’s leader. Based on an innovative design—a 25% sessment (RIA) to integrate assessments of newly-
target reduction in regulatory costs, a link between proposed regulations;
regulatory reforms and the budget cycle, and the es-
tablishment of ACTAL (the Dutch Advisory Board 3. Setting a new 25% target for reduction in regula-
on Administrative Burden) as an independent watch- tory costs by 2011. The new target would cover
dog of the reforms—the program was well under way both information and direct compliance costs, in
to reduce administrative burdens on businesses by the the latter addressing the major regulatory con-
targeted 4 billion Euro. The review also identified a straints faced by businesses. A new baseline mea-
number of important challenges and critical steps nec- surement of regulatory costs going beyond admin-
essary for the Dutch government to take to remain a istrative burden reductions would benefit from the
world leader in regulatory reform.1 Recommendations advanced lessons of other countries;
focused on the following areas of improvement:
4. Using business surveys as a measurement tool in
1. Institutional consolidation and strengthen- addition to the Standard Cost Model. Such sur-
ing by bringing together miscellaneous regula- veys could identify the biggest annoyance costs
tory simplification units under a single entity, perceived by businesses, as well as be used to
and by strengthening the voice of businesses in benchmark changes in perceptions as a result of
ACTAL and IPAL; reforms;
For the full report and recommendations, see http://www.doingbusiness.org/features BurdenReductionProgramme.aspx.
v Review oF the Dutch ADministRAtive simPliFicAtion PRogRAmme
5. Significantly expanding and reorienting com- isterial Steering Committee on Regulatory Pres-
munication efforts. Dedicated communications sure headed by the Prime Minister. Actal has been
staff within IPAL are needed to present messages re-established as a statutory body with both regu-
to the public and ensure that businesses know how latory review and advisory functions; the newly-
to take advantage of the reforms; as well as to learn appointed Wientjes Business Advisory Commit-
from businesses on what else can be done or needs tee of private sector representatives offers feedback
to be done differently; on the Government’s regulatory reform initiatives.
(This action, together with the action below, get
6. Improving data quality, transparency and acces- an A+ in terms of addressing the first issue identi-
sibility to compliance cost measurements. New fied by our 2007 report)
measures could include: a central database, clear
links from aggregated burdens to specific regula- • A shift towards other regulatory impacts includ-
tory obligations, and public access to cost data and ing through a systematic attention to regulatory
measurements. “annoyance costs” and separate monitoring of en-
terprise perceptions; through the review of com-
Recent Regulatory Reform Initiatives pliance costs of the 30 most problematic laws as
seen from the businesses’ perspective; and through
The release of the WBG report coincided with the po- the new focus on the quality of regulatory ser-
litical election cycle and with associated preparations of vices and transactions provided by public agencies.
a new coalition agreement. Announced on 17 February (This action gets an A- in addressing the second
2007, the Coalition Agreement of the Balkenende IV recommendation of our 2007 report)
Government set out a number of high-level priorities
for the continued efforts to reduce regulatory burdens • New administrative burden reduction targets, to be
for businesses.2 A subsequent White Paper ( July 2007) achieved by 2011: The Government has announced
expanded and elaborated on these commitments.3 Ma- a number of new 25% burden reduction targets to
jor new initiatives to-date include: be achieved for i) administrative burdens (net); and
ii) burdens associated with government inspections,
• Creation of the Regulatory Reform Group and Furthermore burdens associated with applying for
strengthening of Actal. The RRG integrates the government grants will be reduced “substantially”. In
former project unit, IPAL (Ministry of Finance), addition, the government has reached an agreement
with three separate units previously dealing with with the association of local governments on a 25%
different aspects of regulatory impacts on busi- reduction for local governments.4 (This action gets
nesses in the Ministry of Economic Affairs. Lo- an A in terms of addressing the third recommenda-
cated in Ministry of Finance, the group reports tion of our 2007 report. One caveat is that the mul-
to the Secretaries of State for Finance and for tiplicity of targets may create confusion—see below
Economic Affairs. The group reports biannually how the Regulatory Reform group has come up with
to Parliament and on an ad-hoc basis to a Min- a dashboard measure to fix this.)
“Action Plan Reduction Red tape for Businesses the netherlands 2007-2011” published by the Regulatory Reform group, see http://www.ez.nl/dsresource?
As part of the overall 25 % target on administrative burdens the Dutch government also identifies measures to be included in the eu commission target to
reduce administrative burdens at the eu level with 25%.
simeon DjAnkov AnD PeteR lADegAARD — the woRlD BAnk gRouP w
• Implementation of business surveys, to gauge dates for new business regulation (twice yearly), and
annoyance costs and identify greatest perceived on-line compliance support to businesses.
obstacles for business. (This action gets an A+ in
terms of addressing the fourth issue identified by By the end of 2007, according to official data pre-
our 2007 report. This is a difficult exercise and sented by the Dutch Government to Parliament, ad-
the speed with which it has been implemented in ministrative burdens had been reduced by 23.9% from
the Netherlands is impressive. There will likely be 2003 to 2007 as measured against the 2003 baseline.
some need to adjust the surveys once they have
been tried once.) Further Assessment of Initiatives
• New communication strategy in place. This is a Despite the new government’s enunciated commit-
welcome and much needed addition to the reform ment to the regulatory simplification agenda, the first
programme. Until recently, the communication ef- several months of the new program were character-
forts were unimaginative and with little chance to ized by some degree of uncertainty about the pro-
reach the intended audience. New channels of com- gram’ viability. This had in part to do with transitions
munication have been opened, through mass media, at the political level, with a growing feeling of reform
and the creation of business spokespeople will un- fatigue among some of the directly involved officials,
doubtedly be very valuable. A word of caution: ex- and with the practical difficulties associated with the
perience in other countries suggests that the results reorientation of the reform agenda.
of the new communication strategy are only likely to
be seen in six months to a year after implementation In the following months, however, the program gained
starts. Hence, management may exercise patience momentum and a number of critical milestones were
in seeing benefits from this significant investment. reached (see Recent Regulatory Reform Initiatives),
(This action gets an A in terms of addressing the which put the program on track for achieving the
fifth recommendation of our 2007 report.) set targets, and for continuing to be the leading and
(now) most innovative regulatory reform program in
• Improvements in data quality and method- the world. Overall, the Dutch Government has car-
ologies, including through a new baseline mea- ried through a remarkable restructuring and strength-
surement of all administrative compliance costs ening of the Regulatory Reform Program with a series
(numbers publicly available); through the gradual of bold moves to upgrade the Government’s regula-
development of a new methodology to measure tory reform agenda.
“substantive” compliance costs, and through busi-
ness surveys enabling a better mapping of busi- The most critical factors now in place include the in-
nesses’ regulatory reform concerns and priorities. stitutional consolidation and strengthening of the pro-
(Still too early to judge the success of this initia- gram through the RRG, Actal, the Wientjes Commit-
tive, which addresses the sixth recommendation in tee, and continued high level political oversight under
the 2007 report, as the benchmark measurements the Prime Minister’s auspices. The Program remains
have only recently become available.) focused on results with a number of clear targets and
strong monitoring mechanism linked to budget cycle.
In addition, a number of other reform initiatives have The first round of ministries’ identification of simpli-
been launched, such as a more systematic use of the fication measures bode well for an achievement of the
silence-is-consent rule, common commencement new reduction target.
x Review oF the Dutch ADministRAtive simPliFicAtion PRogRAmme
The gradual shift of the regulatory reform agenda to be commenced as soon as actual results have been
away from burden reduction and cost cutting towards achieved.5 Most of the communication will be chan-
annoyance factors, impacts as perceived by the pri- neled through the ‘antwoordvoorbedrijven.nl’ Web
vate sector, and a more broad-based regulatory impact site. This digital front office will become the hub of all
perspective also marks a critical turning point. This communications addressing the business community.
shift is essential for the continued development of
regulatory reforms in the Netherlands, and should be
continuously broadened towards a regulatory quality 5. Further Evolution of the
agenda with a balanced and comprehensive apprecia- Reform Program
tion of regulation as tool to achieve policy objectives.
A new feature of the program is its communication As in other broad-based Regulatory Reform Pro-
strategy. The business community, both companies grams, there will be further need to adapt and de-
and individual entrepreneurs, forms the primary tar- velop. Some of the issues that may come up for con-
get group. The communication objectives are: sideration include:
• Knowledge: Businesses should know that regula- • Multiplicity of targets. Both from a monitoring
tory burden and service levels are being addressed, and communication perspective, it can be difficult
that the government is aware of the effect they have, to follow 6-8 quantitative regulatory reform tar-
and that companies are able to complain about reg- gets. Merging and consolidating targets may not
ulations which are seen as inappropriate, irrelevant be possible due to their incompatibility (different
or having a disproportionately high regulatory bur- sources of data). Efforts under way to develop an
den. Sector organizations should be aware of the easy-to-communicate scoreboard comprising de-
ongoing process to reduce regulatory burden. velopments on all targets are a priority.
• Attitude: Businesses can acquire a positive view of • Development of RIA. One important building
the government’s efforts to reduce regulatory bur- bloc of an advanced regulatory management sys-
den and to improve service. tem, currently not fully in place in the Netherlands,
is the establishment of an integrated RIA system.
• Behavior: Businesses should cooperate with the There is little evidence that the development/evo-
government to support the efforts to reduce regu- lution of a RIA system is at a level comparable
latory burden and to improve service. with many of the other high-quality institutional
and procedural measures in place to improve regu-
The overall objective of this communication is to in- latory quality in the Netherlands.
crease the ‘visibility’ of the reduced regulatory burden.
In order to achieve the desired degree of visibility, there • Acknowledge performers. Apart from duty and
must also be a tangible message. The communication political priorities, there are currently no measures
strategy therefore provides for information activities in place to incentivize agencies and individual gov-
the communication campaign was tested in october 2008, and in november the radio commercials and advertisements in newspapers have commenced.
simeon DjAnkov AnD PeteR lADegAARD — the woRlD BAnk gRouP y
ernment officials to deliver on the reform agenda. ogy” of the reforms. A progressive reform agenda
Internalization of reform incentives through (or might be easier to keep alive over the long term
part of ) performance contracts for officials and is the message and impacts are more “positive”.
agencies could be considered. Substantially, there are clear limits to how far the
Netherlands, a highly developed and well-gov-
The Dutch tradition of a detailed and thoroughly ne- erned economy, can push regulatory cost cutting
gotiated coalition agreement guiding the entire policy as a comparative advantage. In stead there should
cycle puts limitations on the extent to which ongoing be stronger and more convincing benefits in pro-
programs can be adapted mid way through the gov- moting the Dutch Regulatory System as provid-
ernment’s tenure. With this in mind, it is important ing predictability, transparency, low risks, as well
at an early stage to consider new components and as low costs for entrepreneurs and investors.
ideas to guide considerations about the next Regula-
tory Reform Program. • When the communication initiative yields first re-
sults, likely in the spring of 2009, there needs to
Going forward, the following aspect may be consid- be an evaluation on what segments of the target
ered in the continued evolution of the Netherlands’ group are reached and with what effect. This may
Regulatory Reform Program: necessitate further innovations. The communica-
tion programme is likely to be mature by 2010, in
• Begin to gradually shift the political rhetoric and time for considering what role it can play in the
policy focus from “cost cutting” to “benefits”. This next reform cycle. n
would not only mark a useful change in “phraseol-