Regulatory Impact Assessment and the Economic Transition to Markets

In most developing and transition economies, far-reaching legal and regulatory reforms are essential for a successful transition to market-led economic development. One of the most important capacities of a market regulator is the ability to assess the market impacts of a regulation before it is adopted. Regulatory impact analysis (RIA) is a tool now used in most developed countries to improve understanding of the economic and social welfare impacts of a law and other forms of regulation. This article argues that institutional reforms aimed at good governance are at the core of the development process, that RIA can contribute to the quality of legal reforms and support other good governance goals, and that RIA can be implemented step-by-step by building on existing practices and investing in skills and training.