World experience in assessing the effectiveness of regulatory policy in the national economy

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World experience in assessing the effectiveness of regulatory policy in the national economy

Kostiantyn Shaposhnykov

Doctor of Economic Sciences, Professor, Honored Worker of Science and Technology of Ukraine,

Head of the Research and Certification of Scientific Personnel Department, SSI «Institute of Education Content Modernization» of the MES of Ukraine, Kyiv, Ukraine

Tamara Pustova

Researcher of the Scientific Research and Implementation of Learning Tools in a Safe Educational Space Department, SSI «Institute of Education Content Modernization» of the MES of Ukraine, Kyiv, Ukraine

The world experience of evaluating the effectiveness of regulatory policy in the national economy is studied. The relevance of the article lies in the need to synchronize the regulatory policy of Ukraine and the EU in conditions of accelerated European integration. The purpose of the article is to summarize the global experience of assessing the effectiveness of regulatory policy in the national economy. The research methodology is represented by the methods of theoretical generalization, comparative analysis, abstract-logical. As a result of the study, it was found that the effectiveness of the regulatory policy is still a debatable issue, since each author proposes to evaluate it based on key indicators of the socio-economic development of those sectors of the economy that are the objects of the study. It was determined that the interstate GIRG index determines the effectiveness of regulatory activity in the vast majority of countries of the world using a process approach. That is, compliance with all necessary procedures for communication with the public is taken into account. It is substantiated that there is a certain statistical dependence between the GIRG index and the state of socio-economic development, however, its nature in some cases is not clearly expressed. This is due to the following reasons: a significant lag between changes in the state regulatory policy model and economic development; different types of government, geographical and natural conditions, national and religious differences, etc. Attention was drawn to the fact that in 2019, the methodology for calculating the general rating indicator of the EBA was changed in order to better assess the impact of regulatory policy on the activities of agro-industrial enterprises. This makes it impossible to analyze target indicators in dynamics. In the process of research, it was found out that the best positions in Ukraine are occupied by phytosanitary legislation according to the results of the analysis. Regulatory norms regarding the registration of agricultural machinery were also noted for their high level of efficiency. As a result of the conducted research, it was concluded that the practice of perspective planning in Ukraine today is not generally accepted among state authorities that are endowed with regulatory functions. In addition, it was concluded that the basis of the strategy for ensuring effective regulatory policy in Ukraine should be deregulation.

Key words: economy; efficiency; national economy; regulatory policy; world experience.

Світовий досвід оцінювання ефективності регуляторної політики в національній економіці

Шапошников К.С.

Доктор економічних наук, професор, Заслужений діяч науки і техніки України, начальник відділу науково-дослідної роботи та атестації наукових кадрів, ДНУ «Інститут модернізації змісту освіти» МОН України, м. Київ, Україна

Пустова Т.В.

Науковий співробітник відділу наукового дослідження та впровадження засобів навчання в безпечний освітній простір, ДНУ «Інститут модернізації змісту освіти» МОН України, м. Київ, Україна

Досліджено світовий досвід оцінювання ефективності регуляторної політики в національній економіці. Актуальність статті полягає в необхідності синхронізації регуляторної політики України та ЄС в умовах прискореної євроінтеграції. Мета статті полягає в узагальненні світового досвіду оцінювання ефективності регуляторної політики в національній економіці. Методологія дослідження представлена методами теоретичного узагальнення, порівняльного аналізу, абстрактно-логічним. В результаті дослідження з'ясовано, що дискусійним питанням досі залишається ефективність регуляторної політики, оскільки кожен автор пропонує оцінювати її на основі ключових індикаторів соціально-економічного розвитку тих секторів економіки, які є об'єктами дослідження. Визначено, що міждержавний індекс GIRG визначає ефективність регуляторної діяльності в переважній більшості країн світу за процесним підхо-дом. Тобто, до розрахунку береться дотримання всіх необхідних процедур комунікації з громадськістю. Обґрунтовано, що існує певна статистична залежність між індексом GIRG та станом соціально-економічного розвитку, однак, її характер в деяких випадках не є чітко вираженим. Це зумовлено наступними причинами: значний лаг запізнення між змінами в моделі державної регуляторної політики та розвитком економіки; різні типи державного устрою, географічні та природні умови, національні та релігійні відмінності тощо. Акцентовано увагу на тому, що у 2019 році методику розрахунку узагальнюючого рейтингового показника EBA було змінено з метою кращої оцінки впливу регуляторної політики на діяльність агропромислових підприємств. Це унеможливлює проведення аналізу цільових показників в динаміці. У процесі дослідження з'ясовано, що найкращі позиції за результатами аналізу в Україні займає фіто- санітарне законодавство. Також високим рівнем ефективності відзначились регуляторні норми щодо реєстрації сільськогосподарської техніки. У результаті проведених досліджень отримано висновок про те, що практика перспективного планування в Україні сьогодні не є загальноприйнятою серед органів державної влади, які наділені регуляторними функціями. Крім того, зроблено висновок про те, що в основі стратегії забезпечення ефективної регуляторної політики в Україні має бути закладена дерегуляція. Ключові слова: економіка; ефективність; національна економіка; регуляторна політика; світовий досвід.

Statement of the problem in a general form and its connection with important scientific or practical tasks

Effective regulatory activity on the part of state bodies is impossible without the mandatory involvement of citizens and nongovernmental organizations in the planning, control and adjustment of regulatory acts. Adaptation of national legislation to these norms over time should ensure a permanent improvement in the quality of decision-making in the field of economic relations between business entities and administrative bodies and contribute to the growth of the role of the public in the development of local self-government [1]. However, the positive dynamics in this direction do not give an idea of the real state of affairs, in comparison with other highly developed countries of the world. That is why an urgent scientific task is the research of international comparison tools, which, on the basis of multifactorial analysis, make it possible to find out the country's place in the world, its strengths and weaknesses, as well as the directions of the main efforts.

Analysis of the latest studies and publications, which the author relies on, which consider this problem and approaches to its solution

regulatory policy national economy

The works of A. Zhavoronok [8], V. Krylenko [2], G. Razumova [3], A. Chub [7-9], K. Shaposhnykov [7], N. Shybaieva [4] and other are devoted to the problems of the effectiveness of the regulatory policy of the state. The authors agree that there is currently no generally accepted methodical approach to this scientific problem.

Highlighting previously unsolved parts of the general problem, to which the specified article is devoted. The effectiveness of regulatory policy is still a debatable issue, as each author proposes to evaluate it on the basis of key indicators of socio-economic development of those sectors of the economy that are the objects of research. On the other hand, the results of such an assessment can be used for retrospective analysis of changes occurring within the country and can be used only for domestic consumption.

Formulation of the goals of the article (statement of the task). The purpose of the article is to generalize the global experience of assessing the effectiveness of regulatory policy in the national economy.

Presentation of the main research material

The World Bank has developed its own methodology for international comparisons, «Global Indicators of Regulatory Governance», GIRG [5]. The relevant indicators are updated after several years and the last calculations were performed in 2018. This is due to the technical difficulties of conducting statistical studies, which are carried out by the method of expert surveys of public administration specialists from more than 180 countries of the world. For this purpose, an appropriate questionnaire was developed, which contains 14 main and about 200 clarifying questions in the following areas [5]:

1. Transparency of regulatory policy plans. The countries that have achieved the greatest success in the efficiency of public administration apply the practice of annual planning of regulatory activities, the results of which are made known to the public through electronic means of information.

2. Public consultations of regulatory bodies regarding the above plans with all interested parties. This process is of key importance for strengthening trust in the executive power.

3. Analysis of regulatory impact by socioeconomic and environmental components. Researchers note that in each country, the appropriate assessment methodology is individual in nature, which reduces the reliability of the results obtained.

4. Systematic monitoring by authorities of the relevance of the current regulatory legal field and implementation of appropriate adjustments if necessary.

5. Free and fast access to the current legal framework of all participants in economic relations on a permanent and free basis.

6. Possibilities of cancellation of regulatory norms in court, in case of their non-compliance with current legislation and violation of the principle of the rule of law. This rule is especially important for investors in cases of their discrimination and manifestations of corruption.

As you can see, the interstate GIRG index determines the effectiveness of regulatory activity in the vast majority of countries in the world using a process approach. That is, compliance with all necessary procedures for communication with the public is taken into account. However, the disadvantage of this index is that it does not assess the quality of these communications in each individual case [7-9].

The World Bank summarizes the results of expert surveys in five directions, each of which is rated from 0 to 1. The global indicator of the effectiveness of state regulatory policy is calculated as the sum of these components, where a higher value corresponds to a better result. Let us consider them on the example of Ukraine, systematizing the research of the authors [7-9]:

1. Publication of perspective plans of regulatory policy - 0.75 points. The maximum score is 1, if planning activities are carried out by all state authorities without exception, which are endowed with regulatory functions, and they are also publicly available. The current assessment indicates that the planning is not of a mass nature.

2. Conducting consultations on the proposed changes - 0.25 points. In our case, these measures are limited to the targeted explanatory work of executive authorities.

3. Publication of consultation results - 0 points. The lack of real consultations as such makes it impossible to carry out this stage.

4. Analysis of regulatory influence - 1 point. The highest rating means the conduct, publication and validation of such an analysis by a special regulatory body.

5. Adopted regulatory acts are freely available on the state web portal - 1 point.

Overall, according to the international rating of the efficiency of the state regulatory policy, from the point of view of ensuring its openness and communications with the public, Ukraine scored 3 points out of 5 possible. This is a mediocre result, at the level of less developed countries, such as: Azerbaijan, Bhutan, Bolivia and Jamaica. A similar generalized result was shown by Latvia, where the biggest problem was the lack of perspective planning in law-making.

If we carry out a multi-factor comparative analysis, taking into account each direction of assessment, then according to the minimum distance criterion, Ukraine is in the same cluster with such related countries as: the United Arab Emirates, Madagascar, Indonesia, Uganda and Albania. All of them, with the exception of the UAE, have a low level of economic development.

The highest overall score of 5 points was given to the OECD countries: Austria, Canada, Estonia, Japan, South Korea, Norway, Poland, Switzerland, Great Britain and the United States of America. The OECD association is an organization of economic cooperation and development of highly developed countries based on the principles of free market and democracy. This group also includes Bulgaria, Costa Rica, Hong Kong, Mexico and Taiwan [7-9].

In contrast to them, the worst overall assessment of regulatory activity of 0 points was characteristic of countries with different socio-economic status: Central African Republic, Guatemala, Haiti, Liberia, Qatar, Saudi Arabia, Syria and others.

As you can see, there is a certain statistical relationship between the GIRG index and the state of socio-economic development, however, its nature is not clearly expressed in some cases. This is due to the following reasons: a significant lag between changes in the state regulatory policy model and economic development; different types of government, geographical and natural conditions, national and religious differences, etc. However, general recommendations are to maximize GIRG.

Taking into account the results of the analysis, the main problems in Ukraine that require immediate resolution are:

- lack of public discussion of government regulatory initiatives. This leads, firstly, to the adoption of inefficient decisions in the interests of interested persons, and secondly, to low public trust. Accordingly, the publication of the results of such consultations is at the lowest level;

- not all state authorities, which are empowered with regulatory functions, carry out long-term planning of their activities.

These issues are regulated by law [1]. It is necessary to create effective communication channels and popularize among the population of the regions the importance of their contribution to the development of local self-government.

As for the agro-industrial complex of Ukraine, international comparisons of the effectiveness of regulatory policy are carried out according to the WorldBank's «Enabling the BusinessofAgriculture» methodology [6]. This approach differs from those proposed by domestic scientists [2 - 4; 7 - 9]. It should be recalled that Ukrainian scientists tend to evaluate the effectiveness of regulatory activity by the final result. That is, according to financial and socio-economic indicators of industry or sectoral development. This approach is based on reliable and up-to-date data of the State Statistics Service of Ukraine, which are its advantages.

At the same time, the World Bank's EBA methodology aims to assess the ease of doing business in the agricultural sector based on indicators that measure legal barriers and restrictions that hinder implementation or slow down economic activity due to ineffective regulatory policies. The following are used as input data: the results of generalizations of scientific research, consultations with industry experts, representatives of business and state apparatus, partner scientific and research institutions, etc. In total, more than 4,000 experts from more than 100 countries of the world were involved in the latest surveys. This approach significantly slows down the collection and processing of subjective data. So, to date, the last reporting period dates back to 2019. Despite this, due to the informativeness of the target indicators and the unification of approaches to the collection of input information, the results of the obtained calculations allow for a multi-factor interstate comparative analysis and the development of recommendations for the necessary changes in the regulatory field [5; 6].

The generalized rating indicator of EBA is calculated on the basis of the simple average of 8 key areas of assessment and can take values from 0 to 100 points. A higher number of points corresponds to a higher efficiency of the regulatory policy in the agro-industrial complex. In turn, each specified direction consists of a set of individual indicators that comprehensively characterize it with the help of:

- relay indicators - can take the value «Yes/ No» or «1/0» and are used to record the presence of certain regulatory norms or tools for effective business conduct. As a rule, relay indicators are used not one at a time, but in multiples for a comprehensive disclosure of the essence of the studied phenomenon. A final individual indicator is calculated for each such set;

- natural indicators - for quantitative assessment of the duration of certain mandatory procedures that accompany producers of agricultural products;

- cost indicators and relative values of intensity

- to estimate the cost of obtaining permits for various types of activities. In certain cases, the relevant assessment is carried out using relative indicators, in comparison with the average income per capita.

Each individual indicator undergoes a linear normalization procedure and is reduced to a scale from 0 to 100 points. At the next stage, on their basis, group indicators are calculated according to the formula of the average arithmetic mean. Let's consider the key areas of EBA assessment in more detail [5-6]:

1. SS seed supply (from Supplying Seed) - this group indicator measures the effectiveness of state regulatory norms regarding the timely provision of corn and cereal seeds to farms. It takes into account the necessary time and cost of registration of new varieties of seeds, as well as compliance with world experience regarding the quality of legal regulation of this process;

2. RF Fertilizer Registration (from Registering Fertilizer) - assesses the effectiveness of current regulatory standards for providing domestic farms with high-quality fertilizers. The time and cost of registering new fertilizers, as well as legal requirements regarding their quality, environmental friendliness and safety for human health, are taken into account.

3. Provision of water for agriculture for agricultural purposes SW (from Securing Water)

- regulates the legal principles regarding the possibilities of access of producers of plant products to water for the purpose of irrigation and land reclamation;

4. Registration of agricultural machinery RM (from Registering Machinery) - regulatory norms affecting the speed of mechanization of agricultural enterprises. The group indicator of this evaluation direction takes into account the time and cost of registration of tractors, as the main type of equipment;

5. Livestock keeping SL (from Sustaining Livestock) - World Bank experts consider the free access of farms to high-quality and safe industrial feed for livestock and veterinary medicines as the main criterion for the effectiveness of regulatory policy in animal husbandry. The assessment is carried out according to a set of relay indicators, which are reduced to a group indicator.

6. Protection and protection of plants PPH (from Protecting Plant Health) - the main focus is on the quality of phytosanitary legislation, in particular, on the fight against plant pests and control. The goal is to minimize phytosanitary risks for enterprises of the agro-industrial complex.

7. Trade in food products TF (from Trading Food) - this direction of assessment measures to what extent the existing regulatory field facilitates or restricts domestic farmers in selling agricultural products on international markets. The calculation takes into account the time and costs of obtaining permits, as well as the complexity of licensing procedures and phytosanitary certification of food products.

8. Free access to AF financing (from Accessing Finance) - unlike industry, agribusiness enterprises may not have real estate, which is usually used as collateral to finance core activities through loans. Modern global practice allows such enterprises to borrow funds under warehouse receipts, i.e., current contracts for the storage of stocks of agricultural raw materials or products. In addition, fair competition means free access to financial resources for each market participant. It is these main aspects that researchers pay attention to in this case.

In 2019, the methodology for calculating the general rating indicator EBA was changed in order to better assess the impact of regulatory policy on the activities of agro-industrial enterprises [5 - 6]. This makes it impossible to analyze target indicators in dynamics. At the same time, we are able to conduct interstate comparisons in order to clarify the necessary changes in the regulatory field. Each of the eight group indicators, as well as the effective EVA indicator, according to the accepted calculation methodology, can take values from 0 to 100 points. However, based on the analysis of data from all countries of the world, we determined the minimum and maximum levels that occurred. This makes it possible to compare the position of Ukraine among other countries of the world. For example, the group indicator of the effectiveness of the regulatory policy on the supply of seeds for the beginning of 2020 ranged from 3.7 points in Congo to 88.3 points in Uruguay. According to this indicator, Ukraine scored SS = 54.9 points.

Phytosanitary legislation, where PPH = 100.0 points, occupies the best position according to the analysis results in Ukraine. That is, at the formal level, the executive power has provided the most liberal legal mechanisms that can facilitate the implementation of economic activity at agribusiness enterprises. Also, regulatory norms regarding the registration of agricultural machinery, where RM = 80.7 points, were noted for their high level of efficiency. In all other areas of evaluation, Ukraine held average positions at the level of 65-70 points [7 - 9]. This means that the national regulatory field has reserves for easing administrative pressure, simplifying and speeding up mandatory procedures and needs improvement.

Among the most liberal and open for business countries, where the effective indicator exceeded 90 points, were: France, Croatia, the Czech Republic, Hungary, Spain, the Slovak Republic and the Netherlands. All of them have a highly developed market economy and are located in Europe. In the next ten countries, according to this rating, 8 are also from Western Europe. Given the fact that the EU is a strategic partner of Ukraine in the field of trade relations, domestic enterprises of the agro-industrial sector of the economy are from the very beginning under conditions of stricter regulatory restrictions, which negatively affects the competitiveness of their products not only on the foreign market, but also on the domestic market [5 - 6].

This especially applies to regulatory norms RF, SL and TF. Therefore, the primary task of the state administration is the deregulation of the legal framework to eliminate the causes of lagging behind the EU countries.

On the other hand, the countries with the most difficult conditions for doing business in the agricultural sector, where, according to the World Bank, the EBA did not exceed 30 points, include: Liberia, Haiti, Cameroon, Iraq, Togo, Angola, Sierra Leone, Sudan, Niger and Congo. The vast majority of them are located in Africa and have a low level of economic development.

Conclusions from this study and prospects for further research in this direction

Based on the results of the research, it is possible to draw conclusions about the shortcomings and priority measures of the state regulatory policy both in Ukraine as a whole and in the agricultural sector. It was found that the legal norms of the current legislation [1] are not always properly implemented. In particular, there are no real public discussions of the government's regulatory initiatives, which are replaced by explanatory work and lack the trust of society. Experts also note that the practice of perspective planning is still not generally accepted among state authorities that are empowered with regulatory functions.

As for the agro-industrial complex, urgent problems for business are: long time for registration of new varieties of cereals, fertilizers and obtaining permits for export of products; lack of free and timely access of farms to veterinary medicines; excessive complexity of procedures for licensing and phytosanitary certification of food products, as well as access to water for the purpose of irrigation and land reclamation. Thus, the strategy for ensuring effective regulatory policy should be based on deregulation.

REFERENCES:

1. Pro zasady derzhavnoi rehuliatornoi polityky u sferi hospodarskoi diialnosti. Zakon Ukrainy №1160-IV vid 01.07.2020 [About the principles of state regulatory policy in the field of economic activity. Law of Ukraine No. 1160IV dated July 1,2020]. Retrieved from https://zakon.rada.gov.ua/laws/show/1160-15#Text [in Ukrainian].

2. Krylenko, V.I. (2014). Suchasni pidkhody do otsinky efektyvnosti rehuliatornoi polityky [Modern approaches to assessing the effectiveness of regulatory policy]. Bukhhalterskyi oblik, analiz ta audyt: problemy teorii, metodolohii, orhanizatsii - Accounting, analysis and auditing: problems of theory, methodology, organization, 1, 144-151 [in Ukrainian].

3. Razumova, H. V. (2019). Pidkhid do otsinky rehuliatornoi polityky ta yii vplyvu na rozvytok ekonomiky [Approach to regulatory policy evaluation and its effects on economic development]. Ekonomichnyi prostir - Economic space, 142, 78-87. DOI: 10.30838/P.ES.2224.260219.78.380 [in Ukrainian].

4. Shybaieva, N. V. & Baban, T. O. (2017). Pokaznyky efektyvnosti rehuliatornoi polityky v ahrarnii sferi [Indicators of Effectiveness of the Regulatory Policy in the Agrarian Sphere]. Problemy ekonomiky - The Problems of Economy, 1, 146-154. Retrieved from http://nbuv.gov.ua/UJRN/Pekon_2017_1_21 [in Ukrainian].

5. The World Bank: Global Indicators of Regulatory Governance. Retrieved from https://rulemaking.worldbank. org/en/about-us.

6. The World Bank: Enabling the Business of Agriculture. Retrieved from https://eba.worldbank.org/en/eba.

7. Kosach, I., Shaposhnykov, K., Chub, A., Yakushko, I., Kotelevets, & D., Lozychenko, O. (2022). Regulatory policy in the context of effective public governance: evidence of Eastern European Countries. Cuestiones Politicas, 40(72), 456-473. DOI: https://doi.org/10.46398/cuestpol.4072.26.

8. Zhavoronok, A., Chub, A., Yakushko, I., Kotelevets, D., Lozychenko, O., & Kupchyshynа, O. (2022). Regulatory Policy: Bibliometric Analysis Using the VOSviewer Program. International Journal of Computer Science and Network Security, 22(1), 39-48. DOI: https://doi.org/10.22937/IJCSNS.2022.22.17.

9. Chub, A.V. (2022). Mizhnarodna reitynhova otsinka rehuliatornoi polityky v ahropromyslovomu sektori Ukrainy [International rating assessment of regulatory policy in the agricultural sector of Ukraine]. Upravlinnia zminamy ta innovatsii - Change management and innovation, 3, 15-18. DOI: https://doi.org/10.32782/CMI/2022-3-3 [in Ukrainian].

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