A Postcard From Abroad on Regulatory Simplification

Key Takeaways

• 53% of firms see rising costs from content‑obligation compliance.
• 65% of governments require regulatory impact analysis for major laws.
• Over 90% report data and resource limits hindering cost‑benefit assessments.
• AI and digital tool adoption stays below 50% due to interoperability issues.
• Australia’s RegValue tool offers a low‑cost health‑check for regulatory systems.

Pulse Analysis

The OECD has long championed evidence‑based regulation, tracing its modern roots to Reagan’s 1981 executive order on cost‑benefit analysis. By 2012 the organization codified best‑practice principles for regulatory quality, and its 2025 high‑level symposium aimed to assess whether member states were translating those principles into tangible simplification. The survey of 28 economies painted a mixed picture: while 65% of governments now mandate regulatory impact analysis for major statutes, more than half of businesses still perceive rising compliance costs and fragmented rule‑making, signaling that the mere presence of analytical tools does not guarantee streamlined outcomes.

A deeper dive reveals structural bottlenecks that blunt the effectiveness of simplification efforts. Over 90% of respondents flagged insufficient data and limited staff capacity as barriers to robust cost‑benefit assessments, and less than half have embraced AI‑driven digital platforms, largely due to interoperability challenges. Moreover, ex‑post reviews remain rare—only 31% of jurisdictions require them—leaving the majority of regulations unchecked after implementation. This “creeping regulatory complexity” undermines the promise of smart regulation and fuels the perception of red‑tape, even as governments roll out burden‑reduction bills.

Australia offers a contrasting case study with its RegValue diagnostic tool and the 2025 Regulatory Reform Omnibus Bill, both designed to provide low‑cost, whole‑system health checks of regulatory value. By consolidating data collection and focusing on user‑centric outcomes, these initiatives aim to boost productivity and attract foreign investment—key priorities highlighted by the Economic Reform Roundtable. The OECD’s findings suggest that scaling such pragmatic, evidence‑driven approaches could bridge the gap between policy intent and business reality, turning regulatory simplification from a rhetorical goal into a measurable driver of economic competitiveness.