This project aimed to develop a framework for assessing the effectiveness of regulatory interventions in the road transport sector. Specifically it sought to determine ‘the best approach for determining and monitoring the contribution that government regulatory interventions in New Zealand make to mitigate the major risks associated with the land transport system’. Regulation includes a broad range of government actions to influence behaviour, including legislation, rules, education and social norms.2 Regulations of the transport system have developed over time and include those that address the safety of drivers and other road users, and those that reduce the environmental impacts of the transport system. It is useful to periodically examine the existing set of regulations to understand whether they are still justified and/or are still the best way to tackle existing transport risks. This is especially so in the face of significant changes in technology and in the New Zealand population. This report examines methodologies for regulatory review to address questions that include whether existing regulations should still be there and whether other regulations should be there but are not. It is not concerned primarily with evaluating the performance of regulations relative to their objectives, but in methodologies that examine whether they are still ‘fit for purpose’, an expectation that the government has set for regulation in New Zealand (NZ Treasury 2013b). The performance of existing regulations is also of interest where good regulations are performing poorly, i.e. the regulatory failure is related to implementation or performance issues. The focus is illustrated in table 1.1; the interest in methodologies that can distinguish the regulations that fall under the ‘good regulation’ category from ‘poor regulation’. In taking this wide perspective on the task, the project addressed the risks of the transport sector to the achievement of broad social objectives (community wellbeing) rather than a narrower definition of the risks of fatalities, injuries and so on. The concern was with risks both on the side of costs and benefits. Such a task involved taking a step back to re-examine the underlying problems that regulations address and what is the best way to tackle them. To evaluate the performance of existing regulations, there is an initial requirement for an ex-ante (before the event) analysis of transport problems and their solutions. It is ‘before the event’ in the sense that we first evaluate problems as though there was no regulation. This allows an existing regulation to be compared with an ideal approach. Some of these same questions are addressed in the strategic policy programme of the Ministry of Transport (MoT). The Regulation 2025 project3 considered how the need for regulation might be different in the future and what tools would be available to shape behaviour. In the same way as this research, the Regulation 2025 project considered ‘regulation’ in its broadest sense; however, it examined all transport modes (road, rail, aviation, maritime and active transport) whereas this project was limited to regulation of the road transport system. The difference between this project and Regulation 2025 is that the focus of this work was on developing evaluation methodologies. However, it also built on the research undertaken for Regulation 2025. The scope of the work was the regulation of risks associated with the land transport system as follows: • road construction impacts on the environment • road use, including safety and environmental impact risks. It did not include financial risks, which might include funding risks (eg revenues from fuel excise taxes and road user charges (RUC) being insufficient) and anti-competitive behaviour (eg market behaviour of transport companies) This report has a number of components. It first sets out the transport regulations current in New Zealand. It examines the subject of regulatory analysis and the Government’s programme of regulatory reform (chapter 3). It then addresses the rationale for regulation on the basis of market failure (chapter 4) and uses this to analyse existing regulations (chapter 5). Chapter 6 analyses the current set of risks or problems in the transport sector that are the subject of regulation, including explaining techniques for identifying the effectiveness of regulation versus the impacts of other factors. Chapter 7 sets out analytical techniques that might be used in identifying regulatory options. Chapter 8 summarises a proposed approach to ex-post evaluation of regulation that can be used to address the questions identified above regarding the fitness of purpose of the regulation and scope for improvement. (Author/publisher)
Abstract