There are some good examples across government of alternatives to regulation being used to achieve policy objectives. However more needs to done to share these examples to highlight when alternatives are most likely to work and how they should be designed.

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Government can achieve its policy objectives by using taxpayer’s money, or through a range of non-spending interventions, including regulation. Regulations aims to set rules to protect and benefit people, businesses and the environment, stabilising markets and addressing market failures to support economic growth. Regulation can also create costs for businesses, the third and the public sectors. It can, if overused or poorly designed/implemented, stifle competitiveness and growth. The government’s Principles of Regulation encourage departments to consider alternatives to regulation, and say that rule-based approaches should be a last resort.

This paper builds on our work to understand the government’s actions to reduce rule-based regulation when it needs to intervene in markets to meet policy goals. We sought to understand what effects Departments’ use of alternatives to regulation and to learn lessons that can enhance their use across government. These include information and education, market-based structures, self-regulation, co-regulation, and behavioural insights.

June 2014




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