Regulatory reform

Regulators act as 'market referees', balancing often competing interests of stakeholders in the sector, including governments, current and future actors in the markets, and consumers. At the same time, markets are changing at an unprecedented pace due to new technologies, the international drive toward carbon-neutral economies, shifts in consumer needs and preferences, and, most recently, the profound changes brought by the coronavirus pandemic. Assessing the performance of economic regulators must therefore be a continuous process. This progress review evaluates the changes put in place by Latvia’s Public Utilities Commission since the previous OECD performance assessment review in 2016, in the interest of increasing the effectiveness of its regulatory activities and improving final outcomes for consumers and the economy.

The Impact of Regulation on International Investment in Finland examines what drives FDI into Finland and which domestic regulatory aspects may discourage foreign investment. The report analyses trends in FDI flows towards Finland and other Nordic-Baltic countries and discusses the benefits of foreign investment for the Finnish economy. It provides a comparative overview of the regulatory frameworks in force in Finland and its Nordic-Baltic peers, outlining both economy-wide and sector-specific findings, and explores how changes in these regulatory frameworks are linked to changes in FDI inflows in the region. Foreign investors’ views on Finland’s business environment complement these findings. The report underlines potential areas for reform and suggests policy actions that could further improve Finland’s investment climate and contribute to attracting and retaining more FDI, while also strengthening its positive impact.

Regulators are proactive referees of the sectors they regulate, contributing to the delivery of essential public utilities for citizens. To fulfill this function, they need to be constantly alert, checking sectoral trends as well as assessing the impact of their decisions. However, while measuring regulators’ performance is essential, it is also challenging, from defininig what should be measured to attributing impacts to regulators' decisions. To address these challenges, the OECD has developed an innovative framework that looks at the institutions, processes and practices that help regulators assess their performance. The framework has been applied to Latvia's Public Utilities Commission, which is responsible for regulating energy, communications, water and waste. The review offers unique insights into the work of a multi-sector regulator, identifying the organisational features that allow lessons and experiences to be shared across sectors and contribute to good performance. It  highlights the importance of clarifying the role and functions of the regulator and its relationship with other public institutions, setting long-term strategic objectives for the regulator's activities, and having the right regulatory tools with appropriate incentives for the efficient and effective provision of public utility services.