1. Introduction
Various organisations survey the impact of regulation in different countries and publish their results. These surveys are undertaken for different reasons. For instance, the Organisation for Economic Co-operation and Development’s (OECD’s) survey is undertaken on behalf of its member states to enable them to make better policy decisions. On the other hand, the World Competitiveness Yearbook is a product of the Institute for Management Development (IMD) supplied in response to perceived demand from business, academics and policy-makers. The mission of the “think-tank”, the Heritage Foundation, is to “formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defence”.[1] Their index can be seen as an instrument used in pursuit of their goals.[2]
These various indices have been used in the empirical literature to study the relationship between regulation and a range of key macroeconomic variables, such as productivity growth, innovation and entry and exit of firms. The findings of these studies generally confirm that regulatory settings do impact on economic growth.
Frequent references are made in political and business circles, and then picked up by the media, to New Zealand’s standing in international comparisons of regulatory cost and quality. These surveys are then used to justify or discredit calls for regulatory change. Responding to these references in a consistent manner with regard to policy advice is difficult due to the variations in the nature of the questions posed by such surveys, the quality of the data used, and differences in underlying regimes and other country-specific factors not captured by the surveys. Knowing the methods used and how the results were produced will help us to interpret their findings and inform policy decisions.
The aim of this paper is to use these international regulatory surveys to inform meaningful comparisons of the impacts of regulation in New Zealand and elsewhere.
Section 2 gives a basic inventory of the international surveys and a discussion of the results from each one, with emphasis on New Zealand’s standing relative to other countries. Section 3 details the methods used in the surveys, discussing data collection methods and data integrity, and any analytical methods used in the construction of the indices. Section 4 provides an overview of how these surveys have been used in the literature to investigate empirical relationships. Finally, section 5 contains some concluding remarks.
