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 dialogue 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.
Citations:
OECD (2019), Indicators of regulatory policy and governance. Europe 2019. Sweden (Paris: OECD).
 
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 favor specific interest groups, and any such effort would most likely be noticed by the media and thus potentially exploited by the opposition in the parliament.
The clearest example of effective grassroots pressure has been the change in environmental policies, which has led to changes in viewpoints across all political parties.
The tradition of coalition and minority governments, and tripartite consultations are further mechanisms that ensure the effective and relatively unbiased enforcement of regulations.
It should also be noted that many regulations are based on EU legislation. When it comes to the implementation of EU directives, the Danish record is quite good compared to other EU member states.
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.

The government recently reformed its impact assessment legislation, creating a new Impact Assessment Agency to centralize federal evaluations of major projects. It additionally created a new Canadian Energy Regulator to oversee Canada’s interprovincial and international pipelines and powerlines. These bodies have respectively replaced the Canadian Environmental Assessment Agency and the National Energy Board.
France
The French government’s efforts to adopt rules and regulations applicable across the country encounters resistance due to the diversity of local 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. This is less evident 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 planned regulations when protests have proved powerful and won widespread public support. Macron’s insistence on the need to fully implement policy decisions helped trigger a social revolt during the winter of 2018 – 2019. Like his predecessors, he too has been forced to withdraw or postpone some of his unpopular decisions.
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. That said, the Phase 3 report by the OECD (2019) noted stronger enforcement of the reforms is needed, which should be reflected in an increased conviction rate.
Citations:
1. OECD (2019) Implementing the OECD Anti-Bribery Convention, Phase 3 report: Latvia, Availble at: http://www.oecd.org/corruption/anti-bribery/OECD-Latvia-Phase-3-Report-ENG.pdf, Last assessed: 05.11.2019.

2. 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

3. 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: 05.11.2019.
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 and Innovation 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 and Innovation 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.

In October 2019, a major fire broke out in a tire-recycling facility in Alytus, leading the town’s authorities to declare a state of emergency. This case demonstrated the inadequacy of legislation and the lack of effective enforcement in the fields of pollution control and fire safety; as a consequence, substantial damage was done to the environment. Lithuanian authorities said they would investigate the case in order to make necessary legislative, policy and administrative changes.
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. Non-compliance with the law results in either administrative or criminal sanctions. However, regulators seek to encourage preventive action. 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 that have held power since 2015 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. This has not changed between 2017 and 2019.
On a political level, it is not so much the “enforcement” of regulation that may be biased, but rather the legislation (or regulations) that are sometimes biased. There is a rather strong tendency in Austrian politics to avoid legislating against the vested interests of powerful (economic or political) actors. As the conservative party is generally considered to have closer ties to (powerful) economic actors, any government led by the ÖVP will not be motivated to legislate against vested business interests.
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. The merger will take effect on 1 January 2020.
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 control 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 raw milk. However, 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 a raise. Despite the appeal, Kahlon remained adamant in his refusal and, in late October 2018, even secured an agreement with the farmers to gradually lower the price of raw milk. Nevertheless, on 4 March 2019, the Supreme Court ruled in favor of the petition and ordered that the price of raw milk should be increased according to the committee’s recommendations.

On the other hand, there are many examples according to which the government does not operate with the public interest in mind. For example, in its report from 8 May 2018, the State Comptroller surveyed the Ministry of Health’s policy on reducing smoking and tobacco consumption, and reproached the ministry for its policy discrepancies and close relationship with tobacco companies. One indicative example from that report is that the deputy minister for health, Ya’acov Litzman, and senior officials from his office met twice with representatives of tobacco companies in undisclosed and unreported meetings. Since then, several media reports about Litzman’s favorable treatment of the tobacco companies have surfaced.

A separate example regarding the government’s lack of resistance to vested interests concerns the Israel Securities Authority. In mid-2017, the authority started investigating Shaul Elovitch, owner of Bezeq, an Israeli telecom giant conglomerate, due to suspicions surrounding the company’s purchase of Yes, a satellite TV company, in 2018. This led to the so-called Case 4000 grand investigation, which includes among its suspects the prime minister, Benjamin Netanyahu, and his family. According to the attorney general’s document of suspicions, during Netanyahu’s time as prime minister and minister for communications, Netanyahu led a favorable policy toward Bezeq, including the approval of the purchase of Yes; in return, Elovitch and his subordinates ensured that Walla, a news website owned by Bezeq, provided positive coverage about Netanyahu while discouraging negative coverage. The investigation is still ongoing.
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 policy areas, however, the role of vested interests is conspicuous. A notable example is energy policy, where the relationship between ministerial bureaucrats, specialized politicians and the nuclear-power industry – basically the major regional energy providers – has remained rather close. Another example is agriculture, which has received particularly favorable treatment and protection for decades as governments have sought to secure rural votes. Whereas the government has stepped up the liberalization of agriculture in recent times, trade agreements such as the Japan-EU FTA and even the 2019 Japan-U.S. trade pact have reflected this to only a limited degree.
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

Xiaochen Su, The Toxic Influence of Japan’s Rural Political Interest Groups, The Diplomat, 5 January 2019, https://thediplomat.com/2019/01/the-toxic-influence-of-japans-rural-political-interest-groups/
Luxembourg
There are a number of powerful interest groups in Luxembourg. Civil servants (Beamte) affiliated with the CGFP union constitute one such group. Civil servants represent a large part of the electorate in national elections (foreigners are not allowed to vote). Therefore, it is not easy for a government to make decisions that go against the positions of the CGFP trade union, for fear that the political opposition would immediately take the CGFP’s side. As one result, civil servants earn much higher salaries than are paid in comparable private sector positions. In addition, civil servants receive so-called jetons, premium payments that are granted for participation in working groups (although this activity takes place during working hours).

One influential subgroup of civil servants are the teachers, who must be involved in all educational reforms. In recent years, the government has relocated many teachers from schools to training institutes (with a separate “campus” created specifically for them in Walferdange). This reform led to protests by groups worried that the number of school teachers had decreased. Other powerful interest groups include foresters, business associations, insurance companies and the construction industry.
Citations:
Schroen, Michael (2012): Luxemburg. Interessenvermittlung in einem Kleinstaat, in: Werner Reutter (ed.): Vergleichende Interessengruppen- und Verbändeforschung, 2nd edition, Springer VS, Wiesbaden, pp. 417 – 444.
Wolf, Sebastian (ed.) (2016): State Size Matters. Politik und Recht im Kontext von Kleinstaatlichkeit und Monarchie, Springer VS, Wiesbaden.
“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 19 Oct. 2019.
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 the limited standards and enforcement has 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 have succumbed to pressure from interest groups. A good case in point in the period of review have been the protracted conflicts over the enforcement of public procurement rules which have delayed the construction of the second Karavanke tunnel tube on the highway to Austria and have led to the resignation in April 2019 of Borut Smrdel, the head of the National Review Commission (DKOM), a review body for procurement-related disputes.
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.
 
Government agencies enforce regulations, but ineffectively and with bias.
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Czechia
In the post-1990 environment, the accumulation of wealth and business power was facilitated first by lax regulatory environments, and later by political favors and contacts with politicians. Prime Minister Andrej Babiš exemplifies this phenomenon at national level, having built his business empire by starting with 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. In 2019, the media reported that in the absence of state subsidies, the Babiš business empire would be operating in the red.
Italy
The ability of the government to effectively enforce regulations against resourceful interest groups received renewed attention after the 2018 collapse of the Genova motorway bridge. It has become clear, for instance, that the Ministry of Transport and Infrastructures did not adequately monitor the implementation of the motorway concession agreements by the private companies who were the concessionaires (particularly in the field of investments and security controls). A review of other fields would likely reveal similar problems. The second Conte government is trying to introduce more independent monitoring mechanisms.
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. A number of protests in 2019 expressed civil society anger against government support for development proposals running counter to the vision of a sustainable economy. 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. 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. 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. In the 2018 report, the Commissioner for the Environment, probably the ministry overseeing the largest number of controversial issues, stated that 62% of the cases opened that year had been closed during the same year. This was mainly due to the fact that during this year, the majority of government entities reduced their response times to an acceptable level, while also improving the quality of replies to queries made by the Commissioner. In addition, all government entities replied positively to the rational recommendations issued by Ombudsman’s Office. Furthermore, the Commissioner for Standards in Public Life has ruled against the practice of members of parliament sitting on government boards. Judicial reviews and EU Commission investigations have frequently given the lie to accusations of bias or wrongdoing, and the government has strengthened its efforts on several scores. However, as in Iceland and Luxembourg, the country’s small size impacts negatively on efforts to ensure bias-free governance.
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
Times of Malta 26/06/19 Our quarrel is not with Sandro Chetcuti
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 and foreign investors are naturally the most powerful vested interests, and most policies take the interests of the big business sector and foreign investors into account. For example, environmental and safety regulations imposed on large businesses such as carmakers or domestic and foreign humidifier makers have been very lenient. SMEs have similarly emerged as a powerful interest group. Here, 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
Netherlands
In the Netherlands, regulatory enforcement by administrative bodies rather than legal prosecution by legal authorities is used to counter the efforts of criminal organizations to penetrate the formal economy and government administrations. Attention has been focused on illegal-drug production, traffic (notably in harbor cities, but also in the relatively empty rural areas of the country’s south and east), transportation and trade, as well as on 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. Studies trying to estimate the effectiveness of such methods have been methodologically contested and are thus inconclusive. 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. Recently, two aldermen in The Hague were accused by public prosecutors of accepting bribes by local entrepreneurs. 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 often claimed that regulations are not strictly enforced with regard to white-collar crimes, the implication being one of a classist justice system. However, it seems that the Dutch government overall tries to enforce rules effectively and fairly but increasingly appears to fail.
Citations:
P. Tops and J. Tromp, 2019. De achterkant van Amsterdam

Trouw, 31 August 2019. Niet alleen in Amsterdam zijn drugs een probleem.

Follow the Money, Voor echte 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

Joop BNNVARA, 4 September 2019 Deskundige serveert Amsterdams drugsrapport Tops en Tromp af (joop.bnn.vara.nl, accesses 28 October 2019)

NRC Handelsblad,1 October 2019. Haagse wethouders beschuldigd van corruptie, college vraagt om terugtreding.
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. As a result, the targeted firms generally take regulations seriously.

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. The introduction of the State Inspectorate in 2018, which encompasses 17 previously independent inspectorates, has failed to ensure compliance.
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.

In the past, including in the term of the previous government (2015 – 2019), government agencies and the judiciary were selective with regard to who should be consistently reviewed and prosecuted for penal-code violations, including for corruption. However, after the government turnover of July 2019, the new government launched a drive to nominate non-politicized appointees to management posts within law enforcement and regulatory agencies. In November 2019, the staff of the Competition Committee paid a visit to the central headquarters of Greece’s four major banks, making a sudden inspection of documents.
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. It remains to be seen whether the new government with its populist approach and its stronger relations to NGOs will be capable of overcoming traditional vested interest barriers.
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. The World Justice Project’s Rule of Law Index 2019 ranked Turkey 106th out of 126 countries, with a score of 0.42 for regulatory enforcement. Turkey’s score on effective regulatory enforcement (0.41) lies the global/regional average. Delay in enforcement without an acceptable reason is on par with the global/regional average (0.47), while improper influence is high (0.63) and respect for due process is very low (0.14), particularly with respect to the global/regional average.

In the first half of 2019, TRL14.6 billion of public tenders were tendered by calling specific persons/companies (mainly partisan companies) or through a direct supply procedure. In the January-June period, a tender of TRL 50.7 million was made for hospitality activities.

In other words, during the review period, the AKP and the president followed a biased and polarizing strategy in government that undermined sustainable, democratic public policymaking and implementation. The governing party also accepted that the new system has some failures in practice.
Citations:
European Commission, Turkey 2019 Report, Brussels, 29.5.2019, https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20190529-turkey- report.pdf (accessed 1 November 2019)

World Justice Project, Rule of Law Index 2019, https://worldjusticeproject.org/sites/default/files/documents/ROLI-2019-Reduced. pdf (accessed 1 November 2019)

“Yeni sisteme ‘uyum’ paketi: Sorunun % 80’i uygulama kaynaklı,” Hürriyet dailynewspaper, 5 September 2019, http://www.hurriyet.com.tr/gundem/yeni-sisteme-uyum-paketi-sorunun-80i-uygulama-kaynakli-41321763 (accessed 1 November 2019)

“14.6 milyarlık ihale yine yandaşa,” Birgün dailynewspaper, 7 September 2019, https://www.birgun.net/haber/14-6-milyarlik-ihale-yine-yandasa-267643 (accessed 1 November 2019)
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Cyprus
General government policies and practices appear fair. However, a bias toward serving the interests of powerful economic groups and individuals as well as bowing to the demands of strong trade unions becomes evident when the stakes are high. Also, both the government and political parties often act on the basis of political expediency: to avoid confrontation with strong formal or informal interest groups, they resort to procrastination, adopt rules that are either ineffective, or simply avoid decision-making. The public good is, thus, not fairly served and lingering governance challenges persist.

A glaring example is the citizenship granting investment scheme. In addition to raising potential ethical issues, corruption and money laundering, it neutralizes laws on town planning. Instead, it favors land developers, upsets the housing market and risks environmental damage. Land development – including for new golf courses – has been allowed within Natura 2000 protected sites, ignoring existing water scarcity challenges. In the financial sector, some argue the ESTIA scheme on foreclosures and non-performing loans was further amended by the parliament in ways “serving the strategic defaulters.”

The general lack of substantial progress on reforms is indicative of a policy bias among the government and parties of avoiding any possible political costs.
Citations:
1. Developers defend passport scheme, Cyprus Mail, 2 October 2019, https://cyprus-mail.com/2019/10/26/developers-defend-passport-scheme/
2. Most hotels didn’t have operating licences renewed in 2018, Cyprus Mail, 4 October 2019, https://cyprus-mail.com/2019/10/04/most-hotels-didnt-have-operating-licences-renewed-in-2018/
3. Estia scheme rewards strategic defaulters, Cyprus Mail, 3 September 2019,
https://cyprus-mail.com/2019/09/03/our-view-estia-scheme-rewards-strategic-defaulters/
Hungary
In general, the Hungarian government can enforce regulations quickly and in some cases 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, post-privatization monitoring, and the energy and media sectors. In 2019, scandals involving prominent political figures’ real-estate deals made it clear that building-permit regulations in Sofia are implemented very unevenly.
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