Release or Capture: How to Make State Simplification Work for Everyone
State simplification has the potential to make it easier for people to work with the government. But simplifying government processes can also pose a risk, tilting the playing field in favor of the few. How can we make sure simplification helps everyone?
By Joseph Foti
As countries around the world seek to cut costs, raise revenue, and encourage business growth, many are taking an approach of “state simplification.” Anyone who has ever modified a house, dealt with family changes (death, marriage, or adoption), run a non-profit, or started a small business might agree that government processes could be easier.
Complicated processes create a number of problems for people:
- Average citizens and their employers lose hours dealing with administrative steps, whether at work or at leisure.
- Start-ups can be more difficult to establish when only big companies have the ability to file paperwork and comply with regulations.
- Each complicated process creates an opportunity for middlemen to make a profit off of an inefficient system.
- In many cases, complicated processes may open up opportunities for abuse of power and corruption when officials have discretionary power with little oversight. This is particularly common, for example, in building inspection or service billing.
- Complicated processes lock in old, heavily-polluting industries in favor of newer, more efficient ones, as we explored in a previous Horizons post.
This type of reform has been front and center in Germany in particular, where Chancellor Olaf Scholz and his party ran on a platform of making the government easier to work with. This is captured in a few new regulations that make up the “simplification agenda,” principally the Fourth Bureaucracy Reduction Act (BEG IV) and the Online Access Amendment Act (OZG 2.0).
Simplification is not without its controversies. It can also be a way of weakening key environmental, social, and health protections. It can be a means of favoring certain businesses or industries over others, result in market concentration, and create uncertainty for investors. Indeed, European organizations have rallied to slow the pace of state simplification in the name of efficiency, arguing that it is being done either sloppily or, worse, in a potentially deceptive way that overly favors well-connected business interests — what is essentially deregulation in disguise.
In Europe, the EU’s simplification packages are not neutral. Rather, they target specific forms of reporting including corporate sustainability reporting, chemical safety, agricultural impacts reporting, and industrial and waste emissions reporting. Arguably it is not about finding efficiencies broadly, but rather is more targeted toward rolling back environmental legislation.
So much of simplification requires doing it right. That means, in part, applying the open government principles of transparency, participation, and public accountability. This helps ensure reforms are trusted, fair, and evidence-based. Critically, many of the current European state simplification bills specifically target the open government principles of transparency (to reduce the reporting burden), participation (in the interest of speeding up permitting), and public accountability (limiting liabilities and review processes for potential and actual harms). This, too, requires a watchful eye.
This blog has not been “absolutist” in its appeal to sometimes simplify or modify open government approaches (more is not always better), but limiting public oversight without carrying out a proper cost-benefit analysis is reckless.
Simplification Done Right: A Menu of Options
OGP members have a long history of administrative simplification through open data initiatives and the creation of one-stop portals. And regulatory governance is ripe as a business and people-friendly reform across the membership. Lessons from what works in these fields can be taken forward as governments try to cut what is unnecessary and protect what is essential.
Co-Design and Participation
Which regulations are targeted and prioritized needs to be transparent and accountable. This can take two forms:
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Private sector voices: Use public consultation or stakeholder panels in “better regulation” reviews. Ensure a mix of business sizes and types as well as public interest groups.
Civil society: Involve civil society groups early when simplifying regulations to identify hidden burdens and safeguard rights.
Simplification of Performance Data
Simplification needs to be data-driven, not lobbyist-driven. That means building decisions and review processes on a solid bedrock of data before, during, and after the simplification process.
Agency performance data: Publish open data on permit processing times, regional disparities, and burden-relief outcomes, both before and after simplification. Ensure that data is maintained by neutral, professional specialists.
Progress reporting: Create public dashboards (such as Gantt charts with raw data) showing progress on acceleration measures and digital uptake.
Metrics development: Embed measurable open metrics such as time saved, cost reductions, and inclusion outcomes. Ideally data on simplification should be interoperable with data from environment, health, and social sectors to ensure that simplification enhances quality of life.
Independent assessments: Involve the regulators, business associations, professional organizations and civil society partners in publishing independent assessments.
Competition measurement: Develop public indicators on competition and market concentration, especially among service providers to government, to ensure that simplification increases competition.
Accountable Data Reuse
Simplification may often mean the centralization of state functions. In many cases, what once required data sharing agreements and oversight may be more centralized as agencies combine staff and digital assets. This requires care, as firewalls between agencies may have been in place for a particular reason.
Privacy and confidentiality protections: Apply transparency and oversight to ensure privacy and competition protection for one stop data systems like UBRegG and BundID. Ensure citizens know what data is used, by whom, and for what purposes. This may include introducing traceability uses for different data.
Protecting Public Oversight
As argued elsewhere (including this blog), there are places where changing the process for public participation, reporting, and legal review can be additive. But if the aim of simplification is to reduce opportunities for public oversight, then it is essential to do so in a way that is transparent and accountable.
Balancing tests: Governments carrying out simplification should include balancing tests to make sure that changes to a regulation balance competing objectives and rights. This needs to include the public’s right to know and to voice their proposals, support, or concerns with individual decisions.
Corruption risk assessment: Changing rules needs to include, among other things, an analysis of whether simplifying and concentrating decisions changes the nature of corruption. For example, digitizing services may lessen the opportunity for petty bribe taking, but may increase the incentive for would-be corrupt bodies to capture upstream decision-making.
From Efficiency to Accountability
The push for state simplification is often framed as a technical necessity to reduce friction and accelerate business growth. But simplification is not a neutral process. Removing processes creates winners and losers. That, in and of itself, is not a problem. But without transparency, data, and a clear weighing of values, simplification may benefit only the well-connected.
The goal should be a state that is not only efficient. Rather, it should be more legible, predictable, and fundamentally accountable to the real people it serves.
