Regulatory Reform and Regulatory Impact Analysis (RIA) Capacity Building for the Standing Conference of Towns and Municipalities in Serbia

The Republic of Serbia increasingly recognises that high-quality regulation at the sub-national level is an essential precondition for effectively responding to a range of fundamental trends in the country: legislative harmonisation with the EU’s acquis communautaire, increased competition, decreased state aid transfers, increased global trade, domestic private sector development, SME promotion, regional and environmental policies, enhancement of social and labour market policies, improving the investment climate etc. An important element of evaluating the quality of regulatory policies within the state consists of differentiating between inputs, outputs and outcomes of the policy. From the input perspective, the state needs to elaborate and adopt new policies and normative acts, as well as creating a new institutional framework based on its activities on new efficient tools. However, this is insufficient, as new capacities need to be implemented, enforced and, ultimately, need to deliver results deemed successful. Political will needs to be tested in the face of opposition from public, and especially private interests. Institutions need to have personnel and budgetary resources necessary to apply the policies, as well as created tools.

The second array of tests focuses on the outputs of the policy and the question of whether the inputs have produced better quality regulations. Finally, the institutional framework needs to implement and enforce the tools necessary to achieve tangible results for individuals and businesses. These would lead to positive consequences related – as has been mentioned – to higher investments, economic growth, better quality natural environment, increased social welfare, etc. Taking into consideration the realities of the Republic of Serbia, the main objective of regulatory reform is to substantially lessen entrepreneurial dependence on excessive administrative regulations; minimise financial costs and time constraints with the support of entrepreneurs to open and maintain businesses which require the obtaining of licences, authorisations and permissions. The ultimate goal of the regulatory reform is to elaborate new state policies. It includes the elaboration of new norms, as well as the creation of new regulatory mechanisms based on the regulatory impact analysis. The new legal and institutional framework should be subject to an efficient state supervision for the fruition of expected results. The motivation of public authorities is also of major importance in this respect, as is the trend to modify their approach to dealing with entrepreneurs.

The goal of the IFC Sub-national Competitiveness Project in the Republic of Serbia is to increase the competitiveness of selected localities and help increase the levels of private investment. The Project focuses on:

• reducing the cost and time required to comply with business formalities, including licenses and permits in order to reduce the cost and risk of doing business;
• improving the capacity of governments to manage administrative and licensing procedures related to business operations and deliver services to businesses and
• establishing a transparent and legally secure Registry of formalities and related information for businesses and the general public.

The Project moves beyond traditional diagnostics by implementing systems for reviewing and systematically improving the stock and flow of regulations as well as simplifying administrative processes at the local level.

The project activities are designed to achieve the following objectives:

• streamlining regulations related to business inspections, permits and licenses; and
• increasing the transparency of the implementation of related regulations by streamlining internal activities of public authorities.