JC&A designed and helped to implement the national Regulatory GuillotineTM reform in Armenia 2012-2015. The goal of the reform was to cut the cost of doing business, broadly understood (that is, regulatory costs that go beyond the Doing Business indicators), in Armenia by at least 50%, which would set into a series of beneficial reactions in the business and investment communities.
To do this, the government of the Republic of Armenia (GoA), with support from multi-donor consortia, launched a program of systemic reform to improve national competitiveness by updating its regulatory policies and policy instruments to stimulate market-driven growth. On October 13, 2011, with the establishment of the National Centre for Legislative Regulation (NCLR), the government of Armenia launched a broad regulatory reform based on the Regulatory GuillotineTM method. As recommended by JC&A, the scope of the reform was set broadly: the review was designed to cover “all legal norms that are broadly defined as any requirement placed on the businesses or citizens” and to include legal norms implemented by the following agencies:
- Sixteen ministries at the national level.
- Ten regulatory bodies at the national level.
- The city government of Yerevan.
The reform was carried out the NCLR, reporting to the Council of Legal Acts Reforms Regulating the Economic Sphere of the Republic of Armenia, which is chaired by the Prime Minister of the Republic of Armenia.
A particular goal of this reform was to boost foreign investment. Armenia is highly regulated, with over 25,000 legal norms on the books at the national level, and more are added every week. Many of these legal norms are sensible and well-designed. Still, there were contradictions, inconsistencies, and complexities in the legal framework that were burdensome for citizens and businesses and discouraged investment in Armenia.
JC&A supported the design and implementation of the Reform process, mentored reform efforts, provided strategic guidance on reform benchmarks, facilitated reform debates, and provided customized training for the Client’s staff. This included establishing the scope and process of the reform and comprising a comprehensive Operational Plan for the reform.
The final results were monetized using the cost impact assessment calculator developed by JC&A, which monetizes both the cost of the baseline before reform and the cost savings resulting from the reforms. The reforms recommended by the NCLR would have eliminated about 400 regulations and simplified around 500, reducing costs to businesses and citizens by about $50 million per annum.
This reform was sustained. The NCLR became the new RIA unit of the Government, and the registry developed through our software was used as the online licensing registry of Armenia, found at http://www.investinarmenia.am/en/permits-and-licenses-other-state-regulations.
Armenia, The World Bank/OSCE, 2012-2015.