By Felipe Costa Paz and Valentín Olavarría
Introduction
Argentina has enormous potential for economic growth. However, in order to avoid repeating past mistakes, it is crucial to consolidate institutions that promote sustainable and equitable development. One of the keys lies in deepening the regulatory quality and evaluation of public policies, overcoming the model of extractive institutions, as stated by Nobel Prize winners Acemoglu and Robinson in "Why countries fail" (2012).
Diagnosis: The Argentine State and its challenges
Our economy is characterized by prolonged instability, reflected in recurrent recessions and high inflationary levels. Despite an increase in social investment, poverty persists (the average is over 25%, with peaks above 50%), evidencing the ineffectiveness of the policies implemented. A considerable informal sector (over 50% of employment), together with a high proportion of unregistered companies, has a negative impact on effective tax collection, which, although high as a percentage of GDP, is lower than that of other countries in the region.
In the last 70 years, Argentina was the country with the highest number of years in recession in the world.
Structural poverty remains above 25%, with peaks above 50% during crises.
Despite a steady increase in social investment, the situation has not improved significantly.
High economic informality, with more than 50% informal employment and a significant percentage of unregistered companies, affects tax collection, which, although high, is lower than in other countries in the region. Inflation also represents a considerable challenge.
The high total tax pressure on income and tax evasion rates are higher than in other countries in the region, such as Uruguay, Chile or Colombia, aggravating this problem.
Regulatory Quality and Public Policy Evaluation: Keys for Change
Regulatory quality involves the design, implementation and review of effective, efficient and coherent regulations that simplify procedures, reduce unnecessary burdens and promote innovation and economic growth.
On the other hand, public policy evaluation in a narrow sense focuses on the systematic analysis of the impact of policies already implemented, with the aim of improving their effectiveness, efficiency, impact and sustainability (or not). According to the OECD in the "OECD Recommendation on Improving the Quality of Government Regulation" good regulatory quality includes clarity, simplicity, consistency with other regulations, and cost minimization. In turn, evidence-based public policies promote trust in public institutions.
In Argentina, the concept of "reasonable regulations", based on principles of appropriateness, necessity and proportionality, provides an important legal framework. Reasonableness is a control guideline that determines the essential content of rights and is also a mechanism for arguing decisions. Other countries have made significant progress in institutionalizing the evaluation of public policies and in promoting regulatory quality, as can be seen in the examples of Mexico, Chile, the United States and the United Kingdom.
Experiences of other countries
In several countries, public policy evaluation is institutionalized and plays a key role in government management. In Mexico, the National Council for the Evaluation of Social Development Policy (CONEVAL) evaluates this type of program; in Colombia (which even has some indications in its National Constitution), the National System for the Evaluation and Management of Results (SINERGIA) measures the impact of the main government programs; In Chile, the Management Evaluation and Control System focuses on economic efficiency through the Ministry of Finance; in the United States, the Government Accountability Office (GAO) audits and evaluates public spending; and in the United Kingdom, the National Audit Office (NAO) monitors public spending and improves government services. These are some experiences (CIPPEC, 2017) that show how the stable formalization of institution-based evaluation is used to improve efficiency and accountability in public policies.
Some examples of regulatory quality implementation can be seen in countries such as the United States, the Office of Information and Regulatory Affairs (OIRA, 1980) reviews regulatory proposals from government agencies to ensure consistency with executive policies. In Peru, the Comisión Multisectorial de Calidad Regulatoria (CMCR, 2021) validates the results of regulatory improvement through tools such as the Regulatory Impact Analysis (AIR). In Mexico, the National Commission for Regulatory Improvement ( CONAMER, 2018) promotes the improvement of regulations and the simplification of procedures to benefit economic development. These offices evaluate procedures and propose improvements to optimize the regulatory framework and transparency in their respective countries.
On January 31, 2022, the British government, through the Department for Business, Energy and Industrial Strategy, published the "Economic Regulation Policy Paper", a legal framework that aims to provide focus, stability, predictability and transparency. In stricto sensu, the principles framed were: responsibility, suitability, predictability, coherence, adaptability and efficiency.
Recommendations for Argentina
To promote a prosperous Argentina, development-oriented political and economic institutions are needed. To this end, a regulatory framework that establishes a standardized procedure for Regulatory Impact Analysis (RIA) and the evaluation of public policies can be an important starting point. In addition, an open government should be promoted, using data science and with clear consensus not only among policy makers but also with other actors in society (private sector and civil society).
To be clear about what the State should do and that this should work properly, is a consequence of the universal national task of consenting an Argentine present with a sense and thirst for the future.
Conclusion
Regulatory quality and public policy evaluation are essential pillars for a more prosperous and sustainable future for Argentina. The opportunities presented by our country in the development of industries such as energy, technology or agribusiness -among others- will only be seized if we move towards an agenda of modernization of the State and its institutional robustness. Implementing the necessary reforms, strengthening collaboration between sectors and encouraging citizen participation, will allow for inclusive and lasting growth.
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