1 Ex-ante impact assessment support for public policies evaluation and sector forecasting substantiation authors: Dana Plăvicheanu, Remus Carteleanu ROMANIA

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Ex-ante impact assessmentEx-ante impact assessmentsupport for public policies evaluation and support for public policies evaluation and

sector forecasting substantiationsector forecasting substantiation

authors: Dana authors: Dana PlPlăăvicheanu, vicheanu,

Remus Carteleanu Remus Carteleanu

ROMANIAROMANIANATIONAL COMMISSION FOR ECONOMIC FORECASTINGNATIONAL COMMISSION FOR ECONOMIC FORECASTING

CMTEA 2007 JUNE 14-15

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Introduction: Introduction:

RomaniaRomania continues the social and economic reforms as a continues the social and economic reforms as a new new Member StateMember State since January the 1 since January the 1stst 2007. 2007.

The main goal of the reform’s conception and promotionThe main goal of the reform’s conception and promotion is isto ensure a high economic growth which should allow to reach theto ensure a high economic growth which should allow to reach theEuropean medium standard of living within 15-20 years;European medium standard of living within 15-20 years;

The Romanian StrategyThe Romanian Strategy regarding the development of the regarding the development of the Public Policy System took into account the recommendations of Public Policy System took into account the recommendations of the Mandelkern Final Report for a better regulation to achieve a the Mandelkern Final Report for a better regulation to achieve a more efficient administration at both levels (the national and more efficient administration at both levels (the national and European level).European level).


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The reforms elaboration, implementation and monitoring The reforms elaboration, implementation and monitoring have a complex institutional and organizational work frame which have a complex institutional and organizational work frame which ensure their coordination, evaluation and efficiency;ensure their coordination, evaluation and efficiency;

Promotion of Public PoliciesPromotion of Public Policies is a necessity for the reforms is a necessity for the reforms intensification to reach the following goals:intensification to reach the following goals:

1.1. Maintaining and improving the macroeconomic equilibriums;Maintaining and improving the macroeconomic equilibriums;

2.2. Accelerating the development rate for Accelerating the development rate for reduction thereduction the socio - socio -economic gaps;economic gaps;

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Continuing reforms – Continuing reforms – a necessity for Romaniaa necessity for Romania RomaniaRomania, as a new Member State of the European Union, still has , as a new Member State of the European Union, still has

carrying on reforms (for administration and justice);carrying on reforms (for administration and justice); From the economic point of view, there still are From the economic point of view, there still are unfinished actionsunfinished actions, ,

such as the property rights situation;such as the property rights situation; The inter-regional gapsThe inter-regional gaps and also those regarding the EU and also those regarding the EU

medium level are more accentuated in comparison with other Europeanmedium level are more accentuated in comparison with other European

states;states; Romania participates at the European common budget for the first Romania participates at the European common budget for the first

time and has less experience not only in promoting projects but also in time and has less experience not only in promoting projects but also in

accession of a significant European assistance;accession of a significant European assistance; An efficient use of long term internalAn efficient use of long term internal development could not be development could not be

supported only by reformssupported only by reforms.. CMTEA 2007 JUNE 14-15

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General concept General concept of medium term reforms is already stipulated of medium term reforms is already stipulated

and configured in:and configured in:

1.1. Strategic Frame;Strategic Frame;

2.2. Convergence Program;Convergence Program;

3.3. National Plan of ReformNational Plan of Reformss;;

4.4. Post-Accession Strategy;Post-Accession Strategy;

5.5. Sectorial-Operational Programs;Sectorial-Operational Programs;

Application of the Application of the strategicstrategic reforms reforms objectives and directionsobjectives and directions

is made by Public Policiesis made by Public Policies..

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The necessity of the The necessity of the Public Policies drawing up systemPublic Policies drawing up system development is underlined also at the EU level through Lisbon development is underlined also at the EU level through Lisbon Strategy, in which the Member States are able to:Strategy, in which the Member States are able to:

1.1. use the budgetary planning of the Public Policies on use the budgetary planning of the Public Policies on medium and long term;medium and long term;

2.2. use the EU initiatives for a better regulation;use the EU initiatives for a better regulation;

3.3. use the impact assessment of the Public Policies; use the impact assessment of the Public Policies;

4.4. improve the consultations with the civil society improve the consultations with the civil society structures for drawing up the Public Policiesstructures for drawing up the Public Policies..


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The Public Policies toolsThe Public Policies tools::

1.1. a wide range of planning and forecasts methodologies;a wide range of planning and forecasts methodologies;

2.2. procedures of public policy decision making;procedures of public policy decision making;

3.3. analysis of the problems;analysis of the problems;

4.4. the development of the solving ways;the development of the solving ways;

5.5. the effects assessment due to alternative solutions;the effects assessment due to alternative solutions;

6.6. choosing thechoosing the resources;resources;

7.7. implementation planning; implementation planning;

8.8. monitoring and assessmentmonitoring and assessment..


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Performance indicatorsPerformance indicators

General objectiveGeneral objective Specific objectiveSpecific objective Operational objectiveOperational objective

Macro-impactresults

Macro-impactresults

The PublicPolicy results(Outcomes)

The PublicPolicy results(Outcomes)

The actions results(Outputs)

The actions results(Outputs)

Function of the process:•Investment indicators•Benefit indicators

Function of the process:•Investment indicators•Benefit indicators

Function of the methods used:•Economic indicators•Efficiency indicators•Effectiveness indicators•Services quality indicators

Function of the methods used:•Economic indicators•Efficiency indicators•Effectiveness indicators•Services quality indicators


Public Policy Planning ModelPublic Policy Planning Model where the macroeconomic where the macroeconomic impact plays a very important role .impact plays a very important role .

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Public Policies processPublic Policies process is highly linked by the is highly linked by the forecastforecast phenomenon and because of the economic changes, the phenomenon and because of the economic changes, the forecast has a higher level of relativity.forecast has a higher level of relativity.


The forecast methodsThe forecast methods (for example – alternative modeling) (for example – alternative modeling) are also used in the ex-ante evaluation because we can draw up are also used in the ex-ante evaluation because we can draw up only the impact or the consequences of the previously defined only the impact or the consequences of the previously defined factors – it results an anticipation exercise of the future events factors – it results an anticipation exercise of the future events which is supposed – these are the forecasts’ effects of the which is supposed – these are the forecasts’ effects of the proposed action.proposed action.

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Types of the forecasts’ methodsTypes of the forecasts’ methods

FORECAST METHODS

Facto-graphical Methods

ExpertMethods

Statistic Analogical

SurveysRegressionExtrapolationSimulationMonte-Carlo Method

HistoricalMathematic

InterviewBrainstormingDelphi Method

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Is an activity made at the beginning of the Public Policy Is an activity made at the beginning of the Public Policy formulating process.formulating process.

The key-factor is represented by establishing of what The key-factor is represented by establishing of what has to be estimated or evaluated.has to be estimated or evaluated.

It has a direct link with the forecast methods through It has a direct link with the forecast methods through the modeling exercise.the modeling exercise.


Ex-ante impact assessment Ex-ante impact assessment

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The place of the The place of the ex-anteex-ante impact assessment impact assessment in the decision in the decision making cycle of the Public Policies.making cycle of the Public Policies.


Public PolicyPublic PolicyEvaluation Evaluation

Public PolicyPublic PolicyEvaluation Evaluation

Public PolicyPublic PolicyMonitoring Monitoring

Public PolicyPublic PolicyMonitoring Monitoring

Public PolicyPublic PolicyImplementation Implementation

Public PolicyPublic PolicyImplementation Implementation

Issue identificationIssue identificationIssue identificationIssue identification

Public PolicyPublic PolicyApproval Approval

Public PolicyPublic PolicyApproval Approval

Public Policy Public Policy FormulationFormulation

Public Policy Public Policy FormulationFormulation

Ex-post Ex-post evaluation of evaluation of Public PolicyPublic Policy

Preparing the regulation projectsPreparing the regulation projectsPreparing the regulation projectsPreparing the regulation projects

Ex-anteEx-anteImpact assessmentImpact assessment

of Public Policyof Public Policy

Ex-anteEx-anteImpact assessmentImpact assessment

of regulationsof regulations

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Ex-ante impact assessmentEx-ante impact assessment of the Public Policies is a collection of the Public Policies is a collection of tools and methods used in the planning level during the of tools and methods used in the planning level during the preparation of the Public Policies documents.preparation of the Public Policies documents.

The goalThe goal is to identify the main social-economical is to identify the main social-economical consequences which could come after the implementation of a consequences which could come after the implementation of a public policy and also to the society reaction in this way.public policy and also to the society reaction in this way.

Ex-ante impact assessmentEx-ante impact assessment could be divided in more stages could be divided in more stages..


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1.1. Defining the resources and the results for the Defining the resources and the results for the alternative solutions;alternative solutions;

2.2. Analyzing the resources and results;Analyzing the resources and results;3.3. Impact assessment for alternative solutions;Impact assessment for alternative solutions;4.4. Analyzing the beneficiaries;Analyzing the beneficiaries;5.5. Identifying the criteria of decisions making;Identifying the criteria of decisions making;6.6. Setting the weight of every criteria;Setting the weight of every criteria;7.7. Drawing up of the alternatives in compliance with the Drawing up of the alternatives in compliance with the

identified criteria;identified criteria;8.8. Identifying the best alternatives;Identifying the best alternatives;

The main stages:The main stages:

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Concerning the area of the approached problem within theConcerning the area of the approached problem within thepublic policy, there is the possibility to make a public policy, there is the possibility to make a generalgeneral or or detaileddetailedex-ante impact assessment. ex-ante impact assessment.

1.1. General ex-ante impact assessment General ex-ante impact assessment is an estimationis an estimation procedure procedure which used the approach through the which used the approach through the qualitativequalitative evaluationevaluation method. method.

2.2. Detailed ex-ante impact assessment Detailed ex-ante impact assessment use the approach through use the approach through the the quantitative evaluationquantitative evaluation method for identifying the possible method for identifying the possible socio-economic consequences.socio-economic consequences.


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Quantitative evaluation methodsQuantitative evaluation methods are used for the are used for the detailed impact assessment (in exceptional cases):detailed impact assessment (in exceptional cases):

1.1. Cost-Benefit Analysis; Cost-Benefit Analysis; 2.2. Cost-Effectiveness Analysis.Cost-Effectiveness Analysis.

Cost-benefit analysisCost-benefit analysis is used just for the drawing up of: is used just for the drawing up of:

1.1. Large and expensive policies;Large and expensive policies;2.2. Investments projects on long term;Investments projects on long term;3.3. Governmental interventions in the commercial Governmental interventions in the commercial

activities;activities;4.4. Privatization of the goods which are in the public Privatization of the goods which are in the public

property.property.

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Setting up of the Public Policy Units within the General Setting up of the Public Policy Units within the General Secretary of the Government.Secretary of the Government.

Setting up of the Public Policy Units within every ministry of Setting up of the Public Policy Units within every ministry of the public administration. the public administration.

Adoption of the 775/2005 Government Decision for the approval Adoption of the 775/2005 Government Decision for the approval of the Regulatory regarding the procedures of decision making, of the Regulatory regarding the procedures of decision making, monitoring and drawing up the public policies at the central level monitoring and drawing up the public policies at the central level by which the ministries are asked to make public policies proposals by which the ministries are asked to make public policies proposals in a specific format for all the important legal documents before in a specific format for all the important legal documents before their evaluation.their evaluation.


The Romanian experience in the Public Policy fieldThe Romanian experience in the Public Policy field

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Strategy for Public Policies evaluationStrategy for Public Policies evaluation


StrategyStrategyStrategyStrategy

ProgramProgramProgramProgram

PlanPlanPlanPlan

Existing PPPExisting PPPExisting PPPExisting PPP

MemorandumMemorandumMemorandumMemorandum

Informative NoteInformative NoteInformative NoteInformative Note

StrategyStrategyStrategyStrategy

Medium term/ Medium term/ Short termShort term

Plan Plan

Medium term/ Medium term/ Short termShort term

Plan Plan

PublicPublicPoliciesPolicies

ProposalsProposals (PPP) (PPP)

PublicPublicPoliciesPolicies

ProposalsProposals (PPP) (PPP)

Reasons exposal/Reasons exposal/Informative Note of the projectsInformative Note of the projects

Reasons exposal/Reasons exposal/Informative Note of the projectsInformative Note of the projects

Existing Informative NoteExisting Informative Noteof the rules projectsof the rules projects

Existing Informative NoteExisting Informative Noteof the rules projectsof the rules projects

Memorandum only for adopting Memorandum only for adopting decisions which comedecisions which come

from international treaties/from international treaties/Negotiations mandate of different Negotiations mandate of different

kinds of international treatieskinds of international treaties

Memorandum only for adopting Memorandum only for adopting decisions which comedecisions which come

from international treaties/from international treaties/Negotiations mandate of different Negotiations mandate of different

kinds of international treatieskinds of international treaties

Informative NoteInformative NoteInformative NoteInformative Note

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Within Within NCEF, NCEF, there is a Unit for analyzing and evaluating thethere is a Unit for analyzing and evaluating themacroeconomic implications of the public policies which releases macroeconomic implications of the public policies which releases impact studies (study cases) of the effects evaluation of the public impact studies (study cases) of the effects evaluation of the public policies and also for the ex-ante and ex-post impact assessments.policies and also for the ex-ante and ex-post impact assessments.


National Commission for Economic ForecastingNational Commission for Economic Forecasting (NCEF)(NCEF) which is a governmental body with competence in macroeconomic which is a governmental body with competence in macroeconomic prognosis according to the “prognosis according to the “Government Decision regarding the Government Decision regarding the CNP functioningCNP functioning””, is also charged with the impact assessment on , is also charged with the impact assessment on the economic field, among many others tasks.the economic field, among many others tasks.

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There is an important connection between the impact There is an important connection between the impact analysis referring to the public policies and the macroeconomic analysis referring to the public policies and the macroeconomic forecasting (prognosis).forecasting (prognosis).

Being a complex institution, Being a complex institution, NCEFNCEF plays an important role plays an important role in analyzing and drawing up the impacts (study cases, etc) by in analyzing and drawing up the impacts (study cases, etc) by using using its sectorial forecastsits sectorial forecasts which have a significant role in which have a significant role in the the expert analyses.expert analyses.

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InterdependenceInterdependence between the ex-ante assessment between the ex-ante assessment and NCEF prognosisand NCEF prognosis

Introduction of the Introduction of the private pension systemprivate pension system

• By diversifying the social securityBy diversifying the social securitysystem give the citizen the possibilitysystem give the citizen the possibilityto extend the insurance over theto extend the insurance over thecompulsory one;compulsory one;• Ensuring an additional income overEnsuring an additional income overthe receiving one through the publicthe receiving one through the publicpension system;pension system;• Ensuring an in-flow capital on the Ensuring an in-flow capital on the internal market;internal market;• Increasing the citizen’s saving rate.Increasing the citizen’s saving rate.

• GDPGDP• Gross Capital Formation Gross Capital Formation through the increase in through the increase in population saving;population saving;• Reduction the pressure of the Reduction the pressure of the population’s disposable population’s disposable incomes on the consumption incomes on the consumption demand (with implications on demand (with implications on inflation and external demand).inflation and external demand).

Real study cases:Real study cases: The main policies and effects:The main policies and effects: Influenced macro indicators:Influenced macro indicators:

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Reduction of the Reduction of the social security social security contributioncontribution

• Reducing labor costs means Reducing labor costs means competitiveness increasing;competitiveness increasing;• Increasing the profits allocated forIncreasing the profits allocated forinvestments;investments;• Reducing the quota paid by Reducing the quota paid by employees leads to the increase in employees leads to the increase in purchasing power (real wages);purchasing power (real wages);

•Reduction of both the labor Reduction of both the labor cost and the total cost withcost and the total cost withimpact on the production andimpact on the production andconsumption prices;consumption prices;• GDP;GDP;• Employment increase;Employment increase;• Real wages increase;Real wages increase;• Reduction of the budgetaryReduction of the budgetaryincomes;incomes;

Increasing of the grossIncreasing of the grossminimum wage perminimum wage percountrycountry

• Dimensioning the monthly Dimensioning the monthly complete minimum consumer basketcomplete minimum consumer basketof goods and services provided for a of goods and services provided for a good living accepted by society;good living accepted by society;• Dimensioning the social Dimensioning the social performances and others which areperformances and others which arebased on the minimum wage level.based on the minimum wage level.

• Wage gain;Wage gain;• Inflation;Inflation;• Employment rate;Employment rate;• Population consumption;Population consumption;• Unit Labor Cost.Unit Labor Cost.


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Environmental taxesEnvironmental taxes • Increasing the funds in order Increasing the funds in order to access more European funds;to access more European funds;• Ecological reasons;Ecological reasons;

• GDP;GDP;• Inflation;Inflation;• Increasing of budgetary Increasing of budgetary incomes.incomes.


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Thank you very much for your attention!Thank you very much for your attention!


Documents

1 Ex-ante impact assessment support for public policies evaluation and sector forecasting substantiation authors: Dana Plăvicheanu, Remus Carteleanu ROMANIA