Implementation

   

To what extent is government enforcing regulations in an effective and unbiased way, also against vested interests?

EUOECD
 
Government agencies enforce regulations effectively and without bias.
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Finland
In general, powerful vested interests are not favored in Finland. To a certain extent, this can be explained by the fact that Finnish governments tend to be coalition governments, often made up of parties from both the left and right.
Germany
Laws and other regulations are usually enforced in an effective and unbiased way. However, law enforcement against vested interest depends on the structure of the respective acts. Detailed and strict laws are difficult to thwart, and administrators and courts are able to enforce them. By contrast, vague and lax laws may be more easily circumvented by vested interests. In general, government and courts are willing and able to enforce their respective regulations, and prevail against vested interests.

A current example concerns the enforcement of air quality protection regulation. This is a highly contested issue with vested interests on both sides of the debate (on the one hand, the powerful automotive industry and, on the other hand, influential environmental pressure groups). The fact that driving limits for diesel cars have been enforced in a rigorous way (also compared to other EU member states with identical air quality standards) indicates a largely unbiased implementation process.
Sweden
Much of modern regulation is responsive regulation: it is designed and implemented through a dialog with the targets of the regulation rather than forcefully imposed. Often, regulatory agencies prefer to use incentives rather than formal rules to elicit the desired behavioral changes among the targets of the regulation. Given that changing behavior is the overarching objective, regulators may use a combination of rules, bargaining and incentives toward that objective. There is no evidence of a systematic bias in this respect among Swedish regulatory agencies.
 
Government agencies, for the most part, enforce regulations effectively and without bias.
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Belgium
Belgium’s system of proportional representation easily falls prey to lobbying. Belgium is actually recognized as a neo-corporatist system. When a strategic decision involves key socioeconomic issues, representatives of the social partners (i.e., the powerful and well-structured employers’ organizations, and trade unions) systematically negotiate a bilateral agreement, which is then passed to the executive.

For this reason, the design of regulations may tend to be biased and at times ineffective, as it is based on a temporary and uneasy compromise between the social partners.

When it comes to the enforcement of regulations that have been agreed upon and then confirmed by the executive, however, public administration and government agencies tend to be fair and effective.
Denmark
The government is fairly effective in enforcing regulations. It is difficult for the government to protect resourceful interests, and any such effort would most likely be noticed by the media and thus potentially exploited by the opposition in the parliament.
The tradition of coalition and minority governments, and tripartite consultations are further mechanisms that ensure the effective and relatively unbiased enforcement of regulations. Moreover, there are a number of formal checks and balances in the Danish system that also ensure the effective and unbiased enforcement of regulations.
Estonia
Regulations are generally enforced in an impartial way without discriminating between the political and social status of organizations and enterprises. Some non-governmental foundations – which operate on a non-profit and non-political basis, and act in the public interest – may be tax-exempt. The list of income tax exempt foundations is issued annually by the Tax and Customs Board in accordance with the Income Tax Act.

Equal enforcement applies also for businesses in terms of complying with tax obligations, technical and sanitary standards. However, such strict enforcement of regulations is sometimes criticized for penalizing SMEs (e.g., small shops, tourist farms and food providers), which struggle to meet the government’s high standards.
Ireland
Government agencies do attempt to enforce regulations effectively and without bias. This was borne out recently by the fact that Denis Naughten, the minister of communications, was asked to resign in October 2018 for having met a stakeholder of a company that was bidding for the National Broadband Plan contract.

There has been a significant growth in political lobbying in Ireland. In general, lobbyists claim that they are simply providing advice about how the process works, but – given that many lobby firms hire ex-ministers, members of parliament and some journalists – transparency advocates believe it is important to have a statutory register of lobbying to guard against corruption. The Regulation of Lobbying Act was passed in 2015. The act provides for an extensive web-based register of lobbying. In its first year of operation 1,100 people registered and there were also almost 1,500 returns by lobbyists. The database is searchable and provides a lot of information on who the lobbyist was, whom they lobbied, what was the content of their lobbying and what the intended outcome of their lobbying was. “All this is radically new in the Irish context. The lobbying register clearly provides citizens with far more information on the lobbying process than ever before – an important step in the promotion of open and transparent policymaking” (Murphy 2018, 290).

An Office of Lobbying Regulation was also set up (within the Standards of Public Office Commission). Its job is to ensure that the Lobbying Act is enforced. It is independent of government, industry and the other sectional interests.
Citations:
Gary Murphy (2018) ‘The Policymaking Process,’ in John Coakley and Michael Gallagher (eds) Politics in the Republic of Ireland.
Norway
Governance in Norway is closely linked to consultative processes. Consequently, such consultations might limit government autonomy. In a small and open economy, the government also seeks to ensure policies that will enable important industries to continue. Historically, various interest groups associated with agriculture and shipping have been particularly influential. During the last decade or so, the interests of the petroleum business and the seafood industry have become more powerful. The key non-governmental actors that shape public policymaking are trade unions, the confederation of businesses and industry, and environmental groups.
UK
The implementation, execution and control of regulations in the United Kingdom is the task of the civil service and statutory regulatory bodies. Many of the latter are set up on a statutory basis, either as non-departmental public bodies that report to parliament or as non-ministerial government departments, ensuring that they are at arms-length from government and ministers. There are also a number of non-governmental regulators for different industry sectors, some of which are voluntary and some of which are placed on a statutory footing either through legislation or a Royal Charter.

The civil service (also known as “Whitehall” for its historic location in London) is a highly centralized and powerful bureaucratic body that abides by very strict codes of conduct, and generally provides an indispensable and loyal service to the UK government.

To uphold or extend the government’s regulatory efficiency, parliament can launch an inquiry into a defined part of society or national business to assess possible interferences with political decision-making. For example, a Commons Select Committee in 2011 notably reported on the unethical and unlawful practices of journalists, which resulted in stricter regulation of powerful media conglomerates in the United Kingdom.

Like many other countries, key industries in the United Kingdom, namely the financial and insurance industry in the City of London, are able to lobby against unwelcome regulation more forcefully than other businesses or civil society.
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Canada
The quality of regulatory enforcement in Canada is generally high. While regulatory agencies occasionally face resource constraints, these are not usually the result of interest group lobbying. Interest groups in Canada tend to focus on obtaining leniencies during the creation of regulations rather than after regulations are promulgated.

One notable exception is the regulatory oversight and environmental assessment review of major industrial projects, where final decisions are in the hands of the ministry or cabinet. In many instances, stakeholders have complained that government approval did not follow the rules and regulations set out by law. Two recent high-profile cases highlight the issue: both the Enbridge west coast oil-port proposal (under former prime minister Harper) and the Trans Mountain pipeline expansion (under current prime minister Trudeau) obtained positive recommendations from the National Energy Board, all required federal and provincial environmental assessment certificates, and final ministerial approval. Yet, federal courts ultimately struck down both approvals. In the most recent case, the Federal Court of Appeal determined that the National Energy Board’s assessment of the project was so flawed that it should not have been relied on by the federal cabinet when it gave final approval.

The government has recently introduced legislation to undo a series of controversial changes to the environmental assessment process adopted by the former Harper government in 2012. The bill includes the introduction of a brand new Impact Assessment Agency to centralize federal evaluations of major projects, as well as a new Canadian Energy Regulator to oversee Canada’s interprovincial and international pipelines and powerlines. These would replace the Canadian Environmental Assessment Agency and the National Energy Board.
France
The willingness of French governments to adopt rules and regulations applicable across the country encounters resistance due to the diversity of situations and the relative strength of vested interests. The difficult exercise of balancing conflicting goals has characterized France since the time of the monarchy.
During the Fifth Republic, there have been limited cases of political bias or clientelistic behavior within the central administrative apparatus. It is not so clear at the local level where mayors can be more lenient vis-à-vis individuals or groups, for instance in the field of urban planning or in the management of procurement contracts (favoring local providers). The main distortions in policy implementation derive from a well-rooted tradition of ignoring the incomplete implementation or non-application of excessive regulations. Governments often lack the courage to enforce regulations when they fear substantial protests. Successive governments have either failed to regulate or withdrawn a planned regulation when protests proved powerful and won widespread public support. Since 2017, President Macron has been more courageous in this respect.
Latvia
When it comes to effective regulatory enforcement in the private sector, there have been concerns regarding bribery, including a few high-profile corruption scandals (e.g., the so-called Oligarchs Case, which involved charges of bribery, money laundering and other crimes in 2011). In addition, there have been tensions around the banking sector and suspicions of “state capture.” These three factors have raised concerns about the state’s ability to take a strong stance. The OECD has noted that many of these issues are linked with the fact that Latvia’s financial sector provides bridging services between the East and West .

Following these scandals, Latvia has made substantial steps to improve the situation and has followed OECD recommendations closely. Latvia has fully or partially implemented 39 out of 44 OECD recommendations. For example, efforts have been made to prevent corruption, raise awareness about corruption, and increase the independence and capacity of the Corruption Prevention and Combating Bureau (Korupcijas novēršanas un apkarošanas birojs, KNAB).

Although the effects of these improvements are yet to be fully observed, Latvia has consistently attempted to tackle corruption since gaining independence (e.g., the creation of KNAB, and the development of several national anti-corruption strategies and programs). In terms of implementation and governance, Latvia has received positive reviews in global ranking reports.
Citations:
1. OECD (2015), Phase 2 Report on Implementing the OECD Anti-bribery Convention in Latvia, Available at:http://www.oecd.org/corruption/anti-bribery/Latvia-Phase-2-Report-ENG.pdf, Last assessed: 05.01.2019

2. OECD (2017), Latvia: Follow-up to the Phase 2 Report & Recommendations, Available at: https://www.oecd.org/corruption/anti-bribery/Latvia-Phase-2-Written-Follow-up-Report-ENG.pdf, Last assessed: 05.01.2019.
Lithuania
In the World Bank’s 2017 Worldwide Governance Indicators, Lithuania scored 83 out of 100 for regulatory quality, down from 85 in 2016. A 2017 OECD report indicated mixed effectiveness in regulatory delivery efforts in Lithuania. Although food safety inspections were effective and in line with best practices, compliance with occupational safety rules was problematic, and the regulation of fire safety was of concern. To improve the enforcement system in Lithuania, the report recommended gathering better data and conducting more analysis, paying more political attention to enforcement, improving risk assessment in enforcement activities, rethinking priorities, reallocating resources, and paying more attention to education and outreach.

The better regulation policy of the Lithuanian government seeks to reduce administrative burden, manage risks better, fight corruption and move to compliance promotion. Regulatory reform momentum was strong at first but has slowed down considerably in recent years. No regulatory institution is named on the list of the most corrupt institutions in the country, though some corruption scandals involved a few regulatory agencies. For instance, in 2016 the Special Investigation Service called on the State Food and Veterinary Service to eliminate corruption after its food safety inspections had yielded no action against any food product deemed harmful to human health. In late 2018, the Ministry of Economy released the first study of regulatory institutions’ activities, assessing the methods and instruments used by institutions that regulate businesses. The study determined that 61% of institutions (33 out of 50) assessed were performing unsatisfactorily, with grades below 5.5 out of 10. Only two institutions, State Tax Inspection and State Labor Inspection, received grades above nine. In general, those institutions that mostly deal with regulating business activities performed better than those which have business regulation as only one of their activities. On the basis of these assessments, the Ministry of Economy issued its recommendations on reducing administrative burdens for businesses. The current government also plans to merge some regulatory institutions, reducing their number from 55 to 47 by 2020.
Citations:
OECD, Regulatory Policy in Lithuania: Focusing on the Delivery Side, OECD Reviews of Regulatory Reform, OECD Publishing, Paris, 2015 http://www.oecd-ilibrary.org/governance/regulatory-policy-in-lithuania_9789264239340-en.
The Worldwide Governance Indicators of World Bank are available at http://info.worldbank.org/governance/wgi/#home
Ministry of Economy, Report of Regulatory Institutions December 2018, available so far only in Lithuania at https://ukmin.lrv.lt/lt/veiklos-sritys/verslo-aplinka/verslo-prieziuros-politika/svieslente
Spain
In recent years, the Spanish government has faced strong pressure from powerful economic groups in the banking, energy and telecommunications sectors, as well as several private groups such as pensioners and taxi drivers. Until 2015, with an absolute majority in parliament, the government was able to push unpopular legislative acts through parliament even against the opposition of vested interests. Nevertheless, the minority governments in power in 2016 through 2018 were forced to seek not only the support of other political parties, but also a broader societal consensus. This has limited the ability to push through regulations against strong opposition from powerful interest groups.
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Australia
With some notable exceptions, the enforcement of regulations is generally effective and unbiased. Exceptions arise in certain industries with large companies, such as in the banking sector, where there is clear evidence of so-called regulatory capture and the regulator does not fully enforce the regulations. More problematic in the Australian context is that the regulations themselves (particularly those specific to an industry) are heavily influenced by powerful vested interests, be they financial institutions, mining companies, property developers or other large companies.
Citations:
https://www.smh.com.au/politics/federal/watching-the-industry-watchdogs-20180601-p4zito.html
Austria
The question of “biased” and “unbiased” cannot be impartially answered by political actors. Political parties and their representatives will always tend to see the enforcement of regulations in different ways, reflecting the different perspectives of the competing parties. But, by and large, the Austrian tradition of enforcing regulations is broadly accepted as being without significant bias.
Chile
Some regulations are highly influenced by economic interest groups, especially regulations affecting the productive sectors (e.g., fishing, agriculture and the mining industry). However, once enacted, government agencies usually enforce regulations effectively and without bias. Therefore, it’s more a question of how regulations are designed than a question of their enforcement.
Iceland
Government agencies enforce regulations and are accountable to a corresponding ministry. Government agencies include the Directorate of Health, Icelandic Medicines Agency, Icelandic Competition Authority, Financial Supervisory Authority and Directorate of Fisheries. Evidence of the extent to which these authorities are able to function in an effective and unbiased way is hard to find. The Financial Supervisory Authority was heavily criticized for failing to do its job prior to the financial collapse in 2008. A 2015 master’s thesis on the Directorate of Fisheries concluded that the directorate had operated according to OECD standards. However, as state television (RÚV) has reported, fishermen have over many years complained about the significant quantities of fish illegally discarded at sea, despite the directorate’s denials.

In October 2018, the government announced a plan to merge the central bank and the Financial Supervisory Authority (FME). The planned merger would enhance trust, transparency and efficiency in financial administration, according to the Prime Minister’s Office. In the past, the FME was less effective as a department within the central bank than as an independent institution.
Citations:
Margrét Kristín Helgadóttir (2015), Eftirlitsstofnanir á Íslandi. Fiskistofa. MPA thesis from the University of Iceland.

RÚV (2017), Brottkast, ís-svindl og uppgjöf Fiskistofu (Discarding, ice-fraud, and the capitulation of the Directorate of Fisheries), http://www.ruv.is/frett/brottkast-is-svindl-og-uppgjof-fiskistofu. Accessed 21 December 2018.
Israel
In general, Israel has a good record in dealing with powerful interest groups and enforcing regulation – the prime example being the Encouragement of Competition and Restriction of Centralism Act of 2013. The law was enacted after a public interministerial committee found that one of the most prevalent structural market failures was the presence of a small group of tycoons that used large pyramidical corporations to controll the market. Therefore, it recommended several affirmative actions to regulate the corporative structure of large businesses and ensure the public interest. The government accepted the recommendations and legislated the aforementioned law.

The law itself differentiates between two main types of businesses – a financial company and a real corporation – and imposes limitations and regulations on the control and purchase of both. The law also dictates that pyramidical corporations are allowed to be only two layers tall (excluding taller corporations that existed at the time of the law’s enactment, which are regulated by a different set of limitations), and defines when and under what conditions a company is considered a big corporation. Moreover, the law ordered the establishment of a professional interministerial committee whose role is to oversee the market and prevent the rising of centralist business structures. The committee is still active and in January 2018 it published two updates to the law.

Another example of the ability of the government to withstand interest groups can be found in the latest developments regarding the dairy products market. In Israel, the authorities monitor and dictate the pricing of basic milk products while taking into account the costs of manufacture. In May 2018, a professional committee recommended that the Ministry of Agriculture and the Ministry of Finance raise the prices of monitored products due to the rise in the price of crude milk, but the minister of finance, Moshe Kahlon, refused to approve the move, supposedly on grounds of public interest. After allegedly failing to reach an agreement, Tnuva, the largest dairy products company in Israel, appealed to the Supreme Court to enforce this raise. Up to now, Kahlon has remained adamant in his refusal and in fact in late October 2018 he came to an agreement with the farmers to gradually lower the price of crude milk. Still, it is unclear whether or not it would make Tnuva’s appeal redundant and at the time of writing the case is still in litigation.
Citations:
Bz, Itamar. “The Ministry of Health in the Service of the Tobacco Industry.” In the Seventh Eye website. October 18th, 2018. (Hebrew). https://www.the7eye.org.il/306434.

HCJ 5124/18 Tnuva Cooperative Center for the Marketing of Farm Produce in Israel Ltd. V The Minister of Finances (Hebrew) (Ongoing)

Israel. “Announcement Regarding the Update of Values [lit., sums] According to the Encouragement of Competition and Restriction of Centralism Act, 2013,”
Publications Digest Records [transliteration: Reshumot], 7671, Jerusalem: The
Governmental Press, 2018, p. 4194. (Hebrew). (Full text: https://www.nevo.co.il/law_word/law10/yalkut-7671.pdf)

Israel. “Announcement Regarding the Update of Values [lit., sums] According to the Encouragement of Competition and Restriction of Centralism Act, 2013,” Publications Digest Records [transliteration: Reshumot], 7679, Jerusalem: The Governmental Press, 2018, p. 4459. (Hebrew). (Full text: https://www.nevo.co.il/law_word/law10/yalkut-7679.pdf)

Israel. The Government. “Bill of the Encouragement of Competition and Restriction of Centralism Act, 2012,” Government Bills Records [transliteration: Reshumot], 706, Jerusalem: The Governmental Press, 2012, pp. 1084-1159. (Hebrew). (Full text: https://www.nevo.co.il/Law_word/law15/memshala-706.pdf)

Israel. The State Comptroller. “Ministry of Health – the Actions of State Authorities to Limit Smoking and its Harms,” Annual Report, 68(3), 2018, vol. 1, pp. 603-665. (Hebrew) (Also available here: http://www.mevaker.gov.il/he/Reports/Report_627/ec2bf97b-92ee-418a-905f-cc3c0eafdac8/208-tabak.pdf)

Koren, Ora. “Tnuva in the HCJ VS the Minister of Finances: Raise the Monitored Dairy Products’ Prices in 3.4%.” In TheMarker website. July 3rd, 2018. (Hebrew). https://www.themarker.com/law/1.6241634.

Senior, Eli. “Netanyahu, Elovitch and the Secret Meeting in the House in Balfour.” In Ynet website. August 7th, 2018. (Hebrew). https://www.ynet.co.il/articles/0,7340,L-5323968,00.html.

The Encouragement of Competition and Restriction of Centralism Act, 2013. (Hebrew). (Full text: https://www.nevo.co.il/law_html/Law01/500_957.htm)

Vaxman, Avi. “Kahlon: ‘The Milk’s Prices Will Decrease. It Is the First Time that Quotas are Reduced Comprehensively.” In TheMarker website. October 29th, 2018. (Hebrew). https://www.themarker.com/news/macro/1.6602506.

Vaxman, Avi. “The Ministry of Finances Signed a Deal with the Dairy Farmers – But What Will the Dairy Plants Do?,” TheMarker, October 30th, 2018, p. 10. (Hebrew)

Wittman, Ariel. “The Ministry of Finances and the Farmers Signed the Milk Agreement,” Israel Today, October 30th, 2018, p. 39. (Hebrew)
Japan
During the early postwar period, the operations of the so-called iron triangle between LDP politicians, the ministerial bureaucracy and big business served to promote overall economic growth, with a bias in favor of large enterprise groups. At the same time, this system ensured that policymaking was not captured by selective industry interests. Following the collapse of the bubble economy around 1990, the iron triangle declined, but a bias in favor of larger enterprises can still be noted.

In some specific policy fields, however, the role of vested interests is much more conspicuous today. A notable example is energy policy, where the relationship between bureaucrats in the industry ministry, politicians with competence in this area, and the nuclear-power industry – basically the major regional energy providers – is considered to be rather close (creating the so-called nuclear village). Another prime example is agriculture, which has received particularly favorable treatment and protection for decades as governments have sought to secure rural votes. In some fields, the government has made efforts to secure its supremacy through institutional reforms. In agriculture, for example, the Abe government curtailed the role of the once-powerful agricultural cooperatives (JA). However, the results are still mixed, for instance in light of the significant protection afforded to agricultural production still contained in recent trade agreements such as the Japan-EU FTA.
Citations:
Jeff Kingston, Japan’s nuclear village. Power and resilience, in: Jeff Kingston (ed.), Critical Issues in Contemporary Japan, Abingdon: Routledge 2013, pp. 107-119

Masayoshi Honma and Aurelia George Mulgan, Political Economy of Agricultural Reform in Japan under Abe’s Administration, Asian Economic Policy Review, Volume13, Issue1, January 2018, pp. 128-144
Luxembourg
Powerful interest groups which the government is unable to govern exist in Luxembourg. One such group are civil servants (Beamte) who are affiliated with the CGFP union. Civil servants represent a large part of the electorate in national elections (foreigners are not allowed to vote). Therefore, it is almost impossible for a government to make decisions against the will of the trade union CGFP, as the respective political opposition would immediately take the CGFP’s side. As a result, civil servants earn very high salaries, much higher than comparable positions in the private sector. In addition, civil servants receive so-called jetons, premium payments which are granted for participation in working groups (despite the fact that this takes place during working hours).

A subgroup of civil servants are teachers who are able to prevent reforms. In recent years, the government has relocated many teachers from schools to training institutes (a separate “campus” has been specifically created for them in Walferdange). This reform led to protests concerned that the number of school teachers had decreased. Other powerful interest groups include foresters, business associations, insurance companies and the construction industry. Interest groups’ links to politics are significant, especially with the CSV and DP parties.
Citations:
Schroen, Michael (2012): Luxemburg. Interessenvermittlung in einem Kleinstaat, in: Werner Reutter (ed.): Vergleichende Interessengruppen- und Verbändeforschung, 2nd edition, Springer VS Verlag, pp. 417 – 444.

“Luxemburg und sein Finanzplatz: Die Osmose zwischen Staat und Unternehmen.” Luxemburger Wort, 24 November 2017. https://www.wort.lu/de/business/luxemburg-und-sein-finanzplatz-die-osmose-zwischen-staat-und-unternehmen-5a170a57c1097cee25b77bed. Accessed 24 Oct. 2018.
New Zealand
The enforcement of regulations is generally effective and unbiased. As in other democracies, regulations themselves (particularly those specific to an industry) are heavily influenced by powerful vested interests. Regulatory capture – a situation in which an industry has the power to determine the activity of a government agency tasked with regulating the industry certainly occurs and can result in the weak enforcement of regulations. Examples include the fishing and mining industries. The conclusions of the Pike River inquiry show that the regulation of occupational health and safety in mining had in effect been subject to regulatory capture by employers. Critics argue that the state of the electricity sector displays many symptoms of regulatory capture. There was also widespread criticism of the Securities Commission for its failure to control unacceptable behavior among investors and companies, contributing to a lack of confidence in the share market and other forms of investment. There was continuing opposition to greater regulation from some powerful and vocal parties, such as the Business Roundtable. It is difficult to distinguish the effects of weak legislation, weak regulator and regulatory capture, but the outcome of feeble standards and enforcement certainly suited some interests despite being to New Zealand’s long-term detriment.
Citations:
OECD Regulatory Policy Outlook 2015 Country profile New Zealand. https://www.oecd.org/gov/regulatory-policy/New%20Zealand-web.pdf.
New Zealand Council of Trade Unions. 2013. Submission of theNewZealandCouncil of Trade UnionsTe Kauae Kaimahito theNew Zealand Productivity Commissionon its inquiry intoRegulatory Institutions and Practices. https://www.union.org.nz/wp-content/uploads/2017/10/131025-Productivity-Commission-Regulatory-Institutions-Practices.pdf
Slovenia
Ministries and government agencies largely succeed in enforcing regulations effectively and without bias. However, there have been some cases in which they succumbed to pressure from interest groups. In the period under review, a case in point was the investment of Magna in Maribor in which a number of legal requirements were ignored by state agencies due to the threat that Magna would move its investment to another country and pressure from the Cerar government, which blindly supported the project.
Switzerland
In Switzerland, there is a very limited likelihood that regulations contradict the interests of powerful groups, considering the numerous opportunities to articulate private interests in policy development. A case in point is agricultural policy: farmers are very effective in impeding regulations given their political power in parliament. For example, in 2018 farmers frustrated the government by rejecting free-trade and competition policies which were against their interests.

In addition, implementation – even of federal regulations – is almost exclusively done by cantonal and local administrations. Frequently, they apply federal law in a very pragmatic way, tailored to the needs of local and cantonal interests. Hence, if federal rules are in direct conflict with powerful vested interests, they are likely to be implemented in a way that minimizes the disadvantages for the powerful vested interests on the cantonal or local level.

Moreover, vested economic interests are very powerful in the implementation process of public policy. Obvious examples are federal rules which were agreed upon in popular votes but violated major economic interests. In 2017, the government and parliament avoided implementing a constitutional rule constraining the inflow of foreign workers. The government and parliament feared that the rule would entail massive economic disadvantages and were supported in their view by economic interest organizations – ranging from trade unions to employers’ associations – and individual firms. Likewise, the strict implementation of a constitutional rule limiting the construction of vacation homes was considerably modified due to powerful cantonal and local economic interests.

Discretion is a necessary condition for implementation, be it by interest groups or cantons. The main goal of federal legislation is the formulation of policy proposals that are accepted in a referendum. This is only possible by granting discretion in the implementation of policies: allowing implementing agents to adjust federal policy. As the federal government depends on implementing agents for basically all policies, there are strong reservations against strict enforcement of compliance. This is a deliberate consequence of the Swiss institutionalized emphasis on policy acceptance rather than outcomes.
Netherlands
In the Netherlands, not legal prosecution by legal authorities, but effective regulatory enforcement by administrative bodies is “undermining” (“ondermijnen,” in a criminological sense) the efforts of “underworld” criminal organizations to penetrate formal and legal action channels of the “upper world.” Attention is focused on illegal drug production, transportation and trade, and human trafficking (women, refugees). Special police teams, mayors of larger cities, national and local public prosecutors, and fiscal detectives collaborate in detecting drug and human trafficking gangs – or, through the use of ordinary administrative laws, to “harass” drug and human traffickers to such an extent that they close or, more frequently, relocate. It is in connection to illegal drugs and human trafficking, that mayors of larger cities and sometimes small, rural villages become “crime fighters.” Another attention area is the integrity of political and administrative bodies. In the recent local elections, some municipalities and political parties screened aspiring new council members’ civic conduct status to a hitherto unusual extent. Integrity screening for police and customs officers, and sometimes high-level civil servants has also been strengthened. The narrowing of the criminological definition of “undermining” has been criticized by those who examine big corporations and financial institutions who abuse regulations and lax oversight, commit fraud and corruption, or do not comply with environmental regulations, especially regarding agriculture and chemistry. It is claimed that in the case of “white collar” crimes, regulations are not strictly enforced, as in class justice. However, overall, the Dutch government enforces rules effectively and fairly.
Citations:
P. Tops and J. Tromp, De achterkant van Nederland,

NRC-Handelsblad, Wie nog weet wat ondermijning precies is, mag het zeggen, 15 February 2018

Follow the Money, Door echo undermining moet je op de Zuidas zijn, 28 August, 2018 (ftm.nl, accessed 1 November 2018)

J. Brouwer, in NRC-Handelsblad, “Ondermijning” is een loos begrip, 1 October 2018
 
Government agencies enforce regulations, but ineffectively and with bias.
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Czechia
The accumulation of wealth and business power has been significantly facilitated from 1990 onwards first by lax regulatory environments and subsequently by political favors and contacts with politicians. Prime Minister Andrej Babiš exemplifies the phenomenon at national level, building his business empire from a starting capital of unclear origins. Once established, state and EU subsidies ensured that Andrej Babiš did not remain just another entrepreneur selling fertilizers and fuel additives. Instead, thanks to the state, he is one of the richest men in Europe, with a business empire worth $4 billion. The European Anti-Fraud Office (OLAF)’s preliminary report on EU subsidy fraud that was leaked in October 2017 before the parliamentary elections found that Andrej Babiš had defrauded EU subsidies and the Czech state, thus confirming the Czech police’s earlier claim.
Italy
The ability of the government to effectively enforce regulations against resourceful interest groups has received renewed attention after the collapse of the Genova bridge. It has become clear, for instance, that the Ministry of Transport and Infrastructures inadequately monitored (particularly in the field of investments and security controls) the implementation of the motorway concession agreements by the private companies who were the concessionaires. A review of what happens in other fields would likely show similar problems.
Malta
For the most part, government agencies in Malta enforce regulations effectively and without bias. This said, the close personal relationships inevitable on a small island have undoubtedly greased the cogs of the administrative machine in order to facilitate positive outcomes in many cases. Certain powerful interests such as the construction lobby also wield influence over the decision-making process. Finally, the government’s reliance on direct orders for large purchases, along with allegations of mismanagement in tendering processes, has left it open to accusations of favoritism. For example, the EU Commission has been asked to investigate a government concession to a private consortium seeking to develop on public land, on the basis that the concession was awarded in a biased and irregular manner. In 2013, the government strengthened the fight against corruption by reducing elected political figures’ ability to evade corruption charges, and introduced a more effective Whistleblower Act. To further address these issues, additional changes have been proposed, including a shift a full-time parliament, with members no longer allowed to maintain private interests or sit on government boards. The 2017 ombudsman’s report cited the need for legislation to regulate lobbying, a practice that can distort fair competition and has been linked to allegations of corruption, as well as the need for individuals to receive correct and timely information on the government’s activities in order to ensure transparency and equal treatment before the law.
Citations:
https://www.timesofmalta.com/articles/view/20181020/local/possibility-of-state-aid-rules-breach-in-db-groups-its-project-raised.692024
https://www.timesofmalta.com/articles/view/20181020/local/possibility-of-state-aid-rules-breach-in-db-groups-its-project-raised.692024
https://www.timesofmalta.com/articles/view/20181027/local/we-have-nothing-to-hide-nothing-to-fear-on-pembroke-project.692678
https://www.timesofmalta.com/articles/view/20180828/local/274-million-svdp-deal-was-never-appealed.687770
Poland
Decision-making and the enforcement of decisions generally follow lines of political affiliation within the current Polish government. As government agencies do not act independently, but rather follow line with the responsible ministry and the party line, it is difficult for outside interests opposing the government to win a hearing. Thus, their attempts to influence government agencies are rarely fruitful, while economic interest groups that are close to the government have more success. For this reason, while government agencies do not act in a strictly unbiased manner, they can be effective in implementing the decisions the government wants enforced.
Portugal
On the whole, government agencies enforce regulations on powerful vested interests largely without bias. While the level of effectiveness is low, this is a general problem in Portugal, particularly when faced by powerful vested interests that are more adept at finding loopholes in Portugal’s complex legal structure.

At the same time, these vested interests may well have the ability to capture and shape regulation toward their interests. As such, government agencies may to some extent be enforcing regulations that are already designed to serve the interests of these interests.
South Korea
Government agencies enforce regulation, but are usually biased in favor of certain groups and vested interests. The big business conglomerates are naturally the most powerful vested interests, and most policies take the interests of the big business sector into account. SMEs have similarly emerged as a powerful interest group. For example, SMEs have managed to obtain very generous exclusions, even from the very modest reduction of maximum allowed weekly work times from 68 to 52 hours. Collusion between management and labor unions has also led to circumvention or exploitation of government regulations. For example, by excluding regular (non-performance-based) bonuses from the calculation of the minimum wage, even workers with relatively high total wages were able to benefit from the minimum-wage increase.
Citations:
Rhyu Sang Young, Moon Jae-in and the Politics of Reform in South Korea, Global Asia 2018, https://www.globalasia.org/v13no3/cover/moon-jae-in-and-the-politics-of-reform-in-south-korea_sang-young-rhyu
USA
In general, the United States has invested quite heavily in regulatory enforcement. A substantial amount of investment reflects the frequent, substantial legal resistance to enforcement actions on the part of the targeted firms or other entities. U.S. regulatory agencies are highly subject to judicial review, and their enforcement actions are often appealed, raising the costs of enforcement and reducing its effectiveness. In general, however, enforcement efforts have been sufficiently energetic that most regulations are taken seriously by the targeted firms.

During the Trump presidency, however, many of the regulatory agencies have been headed by appointees with extremely strong and direct ties to the regulated industries, or with strong ideological opposition to their agencies’ programs. In certain areas, such as environmental and workplace safety regulations, the Trump administration has largely ceased enforcement activity.
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Croatia
Ensuring impartial enforcement of the law and implementation of regulations by public administration bodies independently of the political, economic or social interests of those subject to regulation is a significant problem in Croatia. The underlying reasons lie in the existence of interest groups that enjoy strong protection through political patronage and in the corruptive tendencies of a part of the street-level bureaucracies dealing with the enforcement of regulation (i.e., inspectorates, tax administration, land registry administration, etc.) The politicization of the civil service and weak governance structures have led to the prevalence of institutions of clientelism and regulatory capture.
Mexico
Insufficient funding, corruption and inefficiency inhibit effective regulation in many sectors. Additionally, fragmented responsibilities due to deficiencies in the federal Mexican system are prevalent. Vested interests often manage to block reforms or policy implementation. While this is a cross-sector phenomenon, it has been particularly visible in the education sector, where an ambitious reform was initiated by President Peña Nieto, but protests by and resistance from teachers and unions prevented the reforms implementation. The new president, Andrés Manuel López Obrador, has announced that he will end the educational reform process.
Turkey
A state of emergency was declared by the government after the averted coup attempt of 2016, which lasted until shortly after the June 2018 elections. Under the state of emergency, the government used all its capacities and competences to impose its rule over many areas of public policymaking (e.g., security, justice, economy, media and civil society) by tightening its control over human resources and legal practices, as well as by restricting human and civil rights. According to the World Justice Project’s Rule of Law Index 2017, Turkey ranked 88 out of 113 countries, with a score of 0.44 for regulatory enforcement.

In other words, during the review period, the AKP and the president followed a biased and polarizing strategy in government, which undermined sustainable, democratic public policymaking.
Citations:
World Justice Project, Rule of Law Index 2017-2018, https://worldjusticeproject.org/sites/default/files/documents/WJP-ROLI-2018-June -Online-Edition_0.pdf (accessed 1 November 2018)
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Cyprus
Government policies and practices point to a bias toward serving the interests of powerful economic groups and individuals as well as bowing to the demands of strong trade unions. Also, both the government and political parties often act on the basis of political expediency: they attempt to find ways to avoid “harming” the interests of informal groups by adopting rules that are either ineffective or unrelated or simply by not taking decisions. As a result, the public good is not fairly served and lingering challenges persist.

The most glaring examples are the citizenship granting “investment program” that neutralizes regulation on city planning and the favoring of land development – including new golf courses – within Natura 2000 protected sites while ignoring water scarcity. In the financial sector, the laws on foreclosures and non-performing loans and the accompanied ESTIA scheme were amended after the EU and IMF considered them inadequate for the task. Little or no progress on reforms is also indicative of a policy bias that enables the government and parties to avoid possible political costs.
Citations:
1. Environmental decisions placing Cyprus on path to self-destruction, Etek says, Cyprus Mail, 29 March 2018, https://cyprus-mail.com/2018/03/29/environmental-decisions-placing-cyprus-path-self-destruction-etek-says/
Greece
In Greece, it is difficult to argue that enforcement of regulations is effective. On the one hand, enforcement does indeed depend on the technical capacities and propensities of Greek governments to employ pro-government individuals rather than skilled managers to head government agencies. In turn, this has dampened efficient and unbiased enforcement. Owing to pressure from Greece’s lenders, who have linked the country’s fiscal derailment to maladministration, there has been some effort to streamline regulation and law enforcement. On the other hand, in various sectors (e.g., commercial shipping, mass media, and construction) there have always been resourceful interest groups and influential businessmen. Governments have been and remain unwilling or unable to deal with them. Government agencies and the judiciary have been selective with regard to who should be consistently controlled and prosecuted for penal code violations, including for corruption.
Hungary
The Hungarian government can enforce regulations quickly and drastically. However, given the capture of the Hungarian state, agencies have acted ineffectively and with bias when the interests of important oligarchs have been involved.
Romania
Generally speaking, government agencies possess the technical capacity to enforce regulations against vested interests. In practice, however, regulations are mostly enforced only to the extent to which they benefit powerful lobbies and politicians’ clients.
Slovakia
A core weakness of the Slovak public administration system is the politicization of public decision-making and the influence of economic lobbies and other organized interest groups on policymaking. Thus, government agencies tend to enforce regulations ineffectively and demonstrate bias in their activity.
 
Government agencies enforce regulations ineffectively, inconsistently and with bias.
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Bulgaria
Government regulatory enforcement in Bulgaria is biased and uneven. On numerous occasions over recent years, government agencies have enforced regulations inconsistently for different actors, favoring specific vested interests and penalizing potential competitors to these vested interests. Examples include biases in the implementation of the competition protection framework in banking and non-bank financial supervision, public procurement, and post-privatization control. The most recent example of inconsistent and biased enforcement involved two decisions by the Competition Protection Commission in 2018, which blocked two private sector acquisitions (one in the energy sector and another in the media sector). In one case, the commission criticized the acquiring company for being too small relative to the acquired one. In the second instance, the commission criticized the acquiring company for being too big. In both cases, the decisions were motivated by considerations of political control.
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