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The future of law making

– How should we make good laws and regulations today, and in the future, given the rapidly changing world around us.

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Introduction

Dear madam Chair, OECD delegates, experts and regulators.

Welcome to Oslo, and welcome to the 11th OECD conference on Measuring Regulatory Performance.

The conference is hosted jointly by the Norwegian Government Agency for Financial Management and the Norwegian Better Regulation Council, on behalf of the Norwegian government.

We will address an important challenge faced by governments all over the world:

How should we make good laws and regulations today, and in the future, given the rapidly changing world around us.

It will give us an opportunity to learn and explore important and exciting topics – for all interested in ways of regulating behaviour and products.

Good regulations, good laws, are essential in a good society. 

A law written more than a thousand years ago in Norway, in the time of the Vikings, describes it aptly:

"With law the land shall be built, and it shall not be ruined by unlawfulness.

[From the law of Frostating from ca 950) «Med lov skal landet bygges - og ikke med ulov ødes”]

Laws have been formed over time and each law has been developed based on the problems and technology of that time.

With different problems and different technology today, it may be time to make laws and regulations in new ways.

I am glad that this conference here in Norway gives us a good opportunity to reflect on the important work of making sure our laws and regulations are fit for the future.

Elements of the Norwegian Regulatory System

Please allow me first to introduce you to some elements of the Norwegian regulatory system.

In Norway, we have a long tradition for making rules about how to make new rules.

Our aim is that regulations are adequately studied before they are enacted.

We have formulated these requirements as an obligation to answer six basic questions:

  1. What is the problem, and what do we want to achieve?
  2. Which measures are relevant?
  3. Which fundamental questions are raised by the measures?
  4. What are the positive and negative effects of the measures, how permanent are these, and who will be affected?
  5. Which measure is recommended, and why?
  6. What are the prerequisites for successful implementation?

I believe several OECD countries have similar frameworks.

We have found these questions a good and catchy tool for communicating our duties to carefully consider public measures.

To avoid wasting both public and private money, we truly must ask ourselves “what is the problem we want to solve?” in a given case, and “what do we really want to achieve?”

The Norwegian Government Agency for Financial Management, our co-host today, plays an important part in providing guidance and managing our Instructions for official studies.

Consulting the public about a proposed regulation is also a central building block of the Norwegian regulatory system.

Moreover, we have established an independent oversight body that scrutinizes the basis for proposals of business regulation and the regulatory impact assessments accompanying them.

That is the Norwegian Better Regulation Council, also co-hosting the conference.

Preserve what is valuable in the old standards

This conference will address evidence-based policy making in a rapidly changing world.

You will be discussing how to use data to do reality checks for laws.

You will debate the possible need to adjust traditional regulatory tools. For instance, how to better suit regulatory impact assessments for the new technological realities?  

The traditional way of developing regulation is to assess the possible consequences of different measures, consult with the affected public and then decide and enact regulations.

Is this still a valid and relevant procedure?

How well can we assess the effects on innovation?

How should we collect data that makes it possible to learn and adjust rules over time?

These are important questions to ask. In doing so, we must not lose sight of the qualities and strengths of our current systems.

Rather, we must keep our basic values for good regulations and laws.

These should still be based on good and inclusive processes and on sound knowledge and principles.

Transparency and the rule of law is as important as ever.

The challenges:

Because, as you all know, the challenges are many and large.

New technology changes society fast and in fundamental ways. New products, and new ways of delivering these products, are constantly developed.

Governments may lack experience and knowledge when they consider whether there is a need for regulations.

It is difficult to make sure that current regulations are adapted to the advances in technologies.

One the other hand, the same technologies may provide new data that gives us better possibilities to regulate and to evaluate how regulations actually work.

With data, however, comes challenges of digital privacy and security.

One example of transformative technologies is the emergence of net-based platforms (such as Google, Facebook and Amazon).

They play increasingly important social and economic roles. They could represent a huge potential for better lives for many, and for economic growth.

However, the sheer size of these platforms give them dominant positions. They will be able to strongly influence the conditions for other service providers.

This situation poses challenges for regulatory authorities, as does the fact that these platforms are used all over the world.

Our societies are more complex and interconnected than before.

Something happening on one side of our globe may also affect countries on the other side, literally in a matter of seconds. 

New products are evolving much faster than before.

Suddenly, this spring for example, hundreds of electric scooters filled the streets here in Oslo, taking us by surprise.

Soon people asked- was there a need for new regulations? In fact – my colleague in the Ministry of Transportation had already decided that these scooters should be regulated as bicycles.

And maybe that is it – no further problems to be solved?

An example with more far-reaching consequences is also worth mentioning;

some of the problems of the financial crisis ten years ago were caused by new techniques for spreading risks.

But the regulatory regime lagged behind and a crisis followed. 

Faced with these challenges, how can we develop regulations that make our societies better for all?

What have we done and achieved in Norway?

Let me express some efforts and challenges from a Norwegian perspective.

Many of the challenges of transformative technologies relate to the development of information and communication technology.

In addition to regulating this technology in a prudent way, we must make wise public investments in technology to improve public services.

We have high ambitions in this field. This year we appointed a Minister of digitalisation.

Just a few days ago, he launched the new Digital Strategy for the Norwegian public sector, following our digital agenda for Norway three years ago.

Information and communication technology is important for innovation and productivity in the Norwegian economy, and is essential for the further development of public services. 

In addition to emphasising that public services must be user-centric and seamlessly integrated, a priority in our digital strategy agenda is digital-friendly regulations.

We aim to support innovation and development of digital solutions in the private and public sector bearing in mind that digitalisation also will lead to increased data sharing.

That will require alertness in regulating  data protection and information security.

A successful example of user-centric services is our tax administration.

My generation used to spend hours filling in numbers in the annual tax return, searching for the correct figures in letters filed neatly away.

Now, the tax administration fills in our annual tax return for us, collecting data digitally from employers and banks.

This is easier for all – and it gives us possibilities for reducing public budgets.

We have better services in many areas, and I believe we have achieved a lot and transformed the way we communicate with our citizens.

However, as a minister for budget I notice that it is difficult to see this progress reflected in reduced public spending.

I see few examples of budget reductions caused by new technology.

Norway, as most OECD countries, will face huge challenges in meeting health care needs for an aging population in the years to come.

The abilities new technology offers to monitor the health of each individual, may create a large market over time.

Can we regulate this market in a way that eases the burden on the public health care system?

Alternatively, will this new expansion of health information rather increase the pressure on the traditional public health care?

I have a hope that transformative technologies will not only give us useful services, but also ease the burden on public finances.

Welfare technologies can prove to be a good example of this. However, to reach that goal, it demands of us that we take care when regulating the technology.

The role of OECD

Most countries face the same kind of challenges, and this calls for international cooperation.

Based on expertise from various fields, we need to be ahead of the curve and regulate smarter and possibly also more flexibly in the future.

Our aim should not be more regulations, but smarter regulations.  In this work, we need to learn from each other.

The OECD is an important vehicle for such learning.

Let me also add; some rules will only work as intended if they are a part of an international set of rules.

I think the OECD has an important role to play here.

This conference is a part of a broader agenda from the OECD Regulatory Policy Committee.

There is a plan to deepen its work related to the impacts of emerging technologies over the coming two years.

The effect of digitalisation is one important aspect, and at the centre for this conference.

However, there are also other areas to investigate.

I note that the committee plans to work with how to regulate ride-sharing services, artificial intelligence in autonomous transportation, drones and even gene editing related both to human medicine and agriculture.

These are all examples of emerging technologies that evolve so fast and are so complex that no country on its own may handle them in a prudent way.

As a minister of Finance, I am particularly interested and engaged in how to meet the tax challenges arising from digitalisation.  

It is not a part of the work of this committee, but the OECD has an important role as promoter of a global consensus-based solution, and to provide direction in the ongoing work.

Conclusion

Law-making and regulation is an important task, and a key element of our economic policy.

Let me round off by mentioning a few key challenges that are ahead of us in this area, where I believe the OECD can contribute:

Regulations should give more benefits than costs. This is a simple principle, but not necessarily as easy to live by.

In some instances, small, but vocal groups, may demand a specific kind of regulation that will benefit their group.

Often the costs of these rules may be larger for the society in general than the benefits for the little group.

These issues are at the core of politics.

Sound advice from the OECD may contribute to allow us to live up to the principle more clearly.

One challenge I hope can be addressed by OECD, is how transforming technologies can contribute to ease the challenges of an aging population – also on public budgets.

Another challenge I think all of us face:
How should we find the right balance between the need to act quickly and be flexible, and at the same time carefully  consider the consequences of the measures we enact.

We value specific advice about regulation of the many intricate and challenging technologies.

I welcome the work of the OECD and the Regulatory Policy Committee in this field over the years to come.  

I hope this conference about the future of law-making will give important input into our constant effort to make better laws and regulations.

Thank you for your attention. I hope you have fruitful and interesting discussions throughout the day.

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