I envy the Scandinavian countries

One day, two significant international institutions, each on a different side of the Atlantic, two noteworthy publications, one common topic. Be it by chance or not, last week (on the same day) the World Bank in the USA and the Organisation for economic cooperation in Europe published their analyses evaluating the quality of regulatory policies.

Regulation often causes unnecessary problems for entrepreneurs, so it is good that this topic is being discussed on an international level. On the other hand however, not even teams of skilled analysts are a guarantee of undisputable results. Just to illustrate, here is a short thought on Slovakia’s position in the newest World Bank’s Doing Business 2016 ranking. If you remember last year’s 37th place, it will be surprising to see Slovakia in the 29th place this year with the bank claiming that our position has not changed since last year. The solution to this little mystery can be found in the notes on methodology. According to them, the way in which individual indicators are calculated was changed. Last year’s results were recalculated as well and that caused the change from the 37th to the 29th place.

Let us forget these complications though and let’s focus on one peculiar thing that will strike you if you only as much as skim through the World Bank’s new ranking. Four Scandinavian countries are in the top 10 places. Denmark reached the 3rd place and Sweden, Norway and Finland are 8th, 9th and 10th respectively. This only confirms what has been said many times in here. Countries which are still seen as strong welfare states have considerably reformed and liberalized their business environment. A look at the OECD report will give us a definite answer as to how exactly they have reformed their regulations.

Denmark has been working on reforming regulations and simplifying the rules for businesses for the past 20 years. In 2012, they established a forum for better regulation, with representatives of employers and experts. Their suggestions must be reflected in the legislation. If the government does not incorporate the suggestions, they must thoroughly explain their reasons. Sweden has an independent board for better regulation, evaluating the quality of the government’s estimation of the impact of their legislation. They created a calculator in 2014, which makes it easier to calculate these impacts. Norway is currently carrying out a program for improving the business environment which has as its goal lowering administrative costs by 25% by the year 2017. Finland makes good use of websites and social media for consulting the public and their laws are increasingly being adopted only for a fixed term.

And what is keeping Slovakia from achieving top ranks in business environment rankings? From a total of 34 OECD countries, 29 of them have a minister for regulatory reform. Slovakia is not one of them. 33 OECD countries have a permanent institution for overseeing regulatory policy. Slovakia is not one of them. This uncompromising mirror is showing us two things. Just talking about change is not enough. And that it would not hurt to follow an example that is already working somewhere else.

Author: Ján Oravec

Translation: Jakub Jablonický

Pridaj komentár