The possible role of RIA inSwedish transport planning
Lena Nerhagen, VTI
Sara Forsstedt, the Swedish Transport Agency
Roundtable on “Assessing regulatory changes in the transport sector”
on 6-7 October 2016 in Stockholm, Sweden

Purpose
To describe:- the present use of RIA and CBA in the Swedish planning context- the consequences of current practices using the Swedishtransport regulator as a case study
Based on the findings give recommendations for institutionalchanges if the full RIA process is to be implemented in Swedishtransport policy and planning (alignment of incentives at all levelsand across agencies)

Background - the role and use of RIA“Full” RIA process not implemented in Sweden (Radaelli, 2010)
OECD (2009): RIA - a tool to achieve good governance
RIA is a tool (structure) and a decision process (transparency)
Introduced in the US in 1981 and in the EU in 2002 – part of workwith “Better regulation” (including administrative simplification)• Practice of RIA systems vary widely cross-nationally• Implementation not straightforward and may be controversial• Wegrich (2011): “Economic analysis difficult to reconcile withsystem of negotiated policy-making … in consensus democracies”••••

Theory – RIA, CBA and regulatory governance•Microeconomic theory one basis for discussion about regulatory policy
and design of policy instruments (Ruffing, 2011)•In the US, RIA accepted but the role of economic analysis (CBA) muchdebated => change from benefits exceed cost to justify cost and more
focus how to perform CBA (Shapiro, 2011)•In other social sciences, distinction was made between regulatory (US)versus welfare state (Europe and social-democratic parties ) – now
welfare the aim, regulation the instrument (Levi-Faur, 2011)•“Regulatory governance” new area of research but until recently little
focus on policy formulation and tools for such purposes•“Regulation” however has different meanings in different contexts

The Swedish policy-making context•

Government ministries only employ a few percent of civil servants•

Bureaucracy built on semi-autonomous government agencies•

Traditionally, strong emphasis of the preparatory stages of policy
making process - committees of inquiry and referral process =>assessments of pros and cons and “rationalistic” decision making•

Member of the EU in 1995 – new ways of policy making influencing therole of government agencies (Pettersson, 2016)•End of 1990s, social-democratic government – New Public Management=> Vision Zero and Environmental Quality Objectives•

2006 – new centre-right government “Alliansen” => business focus andorganizational changes in the governance system

CBA in Sweden• Used since 1960s to assess investments in transport infrastructure• Overriding goal for transport policy:
To ensure economic efficiency and long-term sustainability of transport provision forcitizens and enterprise throughout Sweden• 1997 – interagency group ASEK established at agency SIKA
(researchers, 4 transport agencies, SIKA and Swedish EPA)
• ASEK establish values and principles for CBA in transport• 2010 – Swedish Transport Administration established, “new” ASEK
and other planning tools such as “four step principle”• 2010 – Economic analysis in the EQO system, Swedish EPA
responsible and establishment of Interagency platform

RIA in Sweden – Ordinance 2007:1244• Adopted by “Alliansen” following a commission of inquiry• Only relevant for regulatory agencies -§6 general RIA
practices, §7 influence on business, §10 ex post analysis• Swedish Agency for Economic and Regional Growth
responsible for implementation with support from Swedish
National Management Authority• Quality controls on effects for business made by “ The Swedish
Better Regulation Council” (in 2007 a separate body)• In 2015 guide issued by Swedish National Management
Authority on RIA, but not much information about CBAThe Swedish Transport Agency• About us (in terms of RIA and CBA):• The Swedish transport regulator (rail, air, sea and road transport).
• Established January 1st 2009.
• Overall responsibility: designing regulations and ensuring thatauthorities, companies, organizations and citizens abide by them.
• Responsible for about 469 rules.
• Perform RIA when designing and/or changing rules (according toOrdinance 2007:1244), government commissions and proposals tochanges in different types of regulations (about 50 per year).
• Introduced CBA in 2013 (guideline and template), first RIAs including
CBA in 2014.

Case study• Aim: to analyze the RIAs made since CBA was introduced
through new template and guideline (t = 2014-2016).
• Scorecard method by Hahn and Dudley (2007) adjusted to ourcontext.
• We also considered :• The Swedish context; the RIA ordinance (2007:1244) andTransport Policy Goals => partially included in guideline andtemplate. (Environmental Quality Objectives and Vision Zero are
not included since they are not included in the template/guideline).
• Agency guidelines and routines.
• 1-22 changes made per RIA => N=142.

Large variety of the questions addressed in the RIAs
• The range of the problems analyzed illustrates that the rules
designed and administered at the Swedish Agency influences
many different parts of society; the business sector as well as
individuals.
• Examples:• medical requirements, requirements for air traffic controllers, traffic
safety and environmental effects of introducing longer and heavier
freight vehicles, market monitoring of driving schools and drivereducation.

Headlines in guidelines

Qualitative description

Quantified effects

Monetary valuation

Problem definition*

11-

Status quo (reference alternative)

38--

Objective of proposal

38--

Alternatives (no regulation)

10Alternatives (regulation)

31-Enterprises

46

41*Consumers

51

41

Government finances

32

66

Other society (externalities)

31

41

Agencies and other public adm.

40

158

Synthesis of costs and benefits

56

-

-

Distributional consequences

28--

Transport policy goal (economic 5efficiency)
N=142

Concerned parties areevenly distributed…
-

Few cases-…focus is on effects
for enterprises --Main results – a brief summary• Few cases where the effects on the proposals made in the RIA
are quantified and/or given an economic value in terms of abenefit or a cost•

Except for enterprises and business.

• The RIA is often produced after a policy decision is made,which implies that it serves more to justify a regulatory
decision than to inform it.
•A need to consider the acting space and adjust the analysis.

• Risk with a (too) strong focus on enterprises: other (relevant)social effects are not assessed.

Possible explanations to the results:• The Swedish context•

The RIA-ordinance (2007:1244) and the Better Regulation Council => focus
on enterprises and businesses.

• Current focus on CBA and transport•

Investments in infrastructure – input to the analysis is developed since the1960’s with elaborate system for calculation of NPV (net present value).

• The variety and breadth in the questions addressed in RIA••

Complex situations to be assessed.
Hence it is difficult to quantify and place monetary values on effects.

Conclusions•

The Swedish governance system is highly fragmented. Division ofresponsibilities is unclear.

•Policy making today is faster => more important role for government
agencies in regulatory preparations.

•No “demand” for RIA at the political level but current institutional
design influence the work done by government agencies.

•RIA and CBA are not implemented by an independent agency but
rather by agencies responsible for specific policy areas (growth,environment including EQO, infrastructure and Vision Zero)•

Difficult for a single agency to implement “full” RIA process when
dependent on other agencies for relevant inputs.

Recommendations
1. RIA ordinance – revised.
- To shift the focus away from regulation and provide incentive forassessments of different types of policy instruments.
- To clarify the role and establish independence for this policy making tool.

2. The role of the better regulation council- To widen the analysis on impacts on SMEs from ease of administrative
burden to analysis of industrial organization and competition policy.

3. The role of ASEK
- To secure an “objective” analysis, tools and inputs to be used in CBA should
be developed by autonomous institutions.