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More Rigorous Policy-Making through Regulatory Impact Assessment (RIA) Improves Responsiveness to Citizens in Vietnam’s Legal System
Law-making in Vietnam typically lacks sufficient public policy-making, adequate public consultation and rigorous policy analysis to ensure that laws are responsive to the needs of citizens. Drafting Committees often prepare dozens of draft laws without fully understanding the problem definition, the policy options, the benefit-cost trade-off of each option, and the best policy alternative to address a specific problem. At the request of the Ministry of Justice in January 2008, USAID’s Vietnam Competitiveness Initiative (VNCI), working closely with USAID’s Support for Trade Acceleration (STAR) project, implemented a Regulatory Impact Assessment of the key issues in the proposed revised Law on the Promulgation of Legal Normative Documents (Law on Laws), which is the guiding law for all laws in Vietnam. VNCI advisors worked with the drafting committee to apply RIA to identify the problem, explore the key issues and alternative policy options, and conduct benefit-cost analysis to assess the optimal policies to guide the law. The RIA methodology was applied to six proposed policy issues: 1) pre-RIA consultations with civil society and business groups; 2) codification of legal documents to reduce public complaints and research costs; 3) use of omnibus law to reduce inconsistencies in legal text and the costs of drafting and revising laws; 4) RIA with public consultation required on all legal norms; 5) reduction in number of legal instruments to simplify the legal system; and 6) mandatory public consultations to ensure more effective law policy making. There was considerable disagreement among members of the Law Committee of the National Assembly and the drafting committee chaired by the Ministry of Justice about these six issues and whether or not to include them in the proposed revisions to the law. The RIA analysis provided economic impact analysis for key issues that demonstrated that this law has major economic consequences. For example, public consultation is critical to effective law policy making with an estimated benefit of $349 million per year, total cost compliance savings for the business sector estimated at $6.8 billion per year, and an estimated 1.1 million additional new jobs that can be added to the economy through greater economic efficiency of the law. For the first time, lawmakers had analysis to assess the economic impact of the proposed reforms that incorporated greater safeguards for citizen and business interests. At the conclusion of the analytical work, a workshop to present the RIA results was organized by the Ministry of Justice and VNCI on May 8, 2008, with a high level of participation from Ministries, the National Assembly, and research institutes due to the importance of this proposed revised law and the interest in RIA, which is new to Vietnam and will be a new requirement for all legal normative documents in Vietnam under the Law on Laws, which takes effect on January 1, 2009. The Minister of Justice distributed 450 copies of the RIA report on the Law on Laws prepared by the Ministry of Justice, incorporating the methodology and technical inputs contributed by VNCI, to all Deputies of the National Assembly. The National Assembly adopted the new Law on Laws in May 2008. The RIA work on the Law on Laws was fully conducted by Vietnamese legal drafters, who were advised by VNCI technical advisors on how to incorporate new practices for policy-making into a critical law using evidence-based, rigorous analysis techniques applied to policy choices in legal drafting. Vice-Minister Lien, Ministry of Justice, noted that “this was the first time that RIA has ever been implemented for a proposed law to the National Assembly. It was very well received by the Deputies in the National Assembly because it provided an innovative, evidence-based analysis of the Law on Laws.” VNCI is now working with the Ministry of Justice and STAR Project and the United Nations Development Programme to introduce a full RIA system, quality control mechanisms and capacity building into the implementing decree which will require RIAs for new laws and other legal normative documents as of January 1, 2009. VNCI will provide under Phase II a full-time Senior Regulatory Advisor to assist the Ministry of Justice and other Ministries and the National Assembly to apply pre-RIA requirements to establish the legislative agenda for the next year, to develop the capacity and skills across central government Ministries to conduct at least one full RIA pilot on a key law or decree, and to conduct shorter RIA on all other proposed legal normative documents. VNCI is now supporting a second pilot RIA with the drafting committee on the Law on Civil Service, chaired by the Ministry of Home Affairs, to conduct policy analysis on four key issues: create a sound legal foundation to build a civil service to meet the new requirements of Vietnam in future; improve the effectiveness and efficiency of public agencies in designing and carrying out public policies so as to get better policy results; improve the flexibility of the civil service in adjusting to new needs and requirements of Vietnam by bringing replaced unneeded skills; and improve accountability for ethics, performance, and results. These pilot RIA projects demonstrate the power of more rigorous policy-making to improve governance and democratic principles to ensure greater responsiveness to the needs of Vietnam’s citizens and enterprises.