This opinion piece was written by Pedro Juan Inchauspe, Argentina’s Federal Government’s Secretary for Production Simplification. For more like this, see our public private partnerships newsfeed.
Keep it simple, it is not complex.
It would be simple if the state were not fully paper-based, or if an SME owner did not need to travel 1,500 kilometres to submit documents to start a basic procedure, or if a form did not take a year to process.
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In contexts like this — in “the paper state” — firms spend more money, time and effort trying to overcome bureaucratic barriers than they do maximising benefits and generating jobs.
This scenario was, until recently, our reality in Argentina. But the government has realised now that changing the way it relates to citizens and companies is a must. If our businesses are to thrive, citizens and companies needed to be put in the spotlight, at the front and centre of every initiative to create an adequate regulatory environment.
We’ve moved to seeing government in a whole new light — as at the service of the people
This new perspective required a significant cultural change. We’ve moved to seeing government in a whole new light: a new perspective of government as at the service of the people.
Argentina is the eighth largest country in the world, covering an area of 2.78 million square kilometres. The “paper state” was a major sticking point for companies located in the hinterland. Digitisation of procedures was essential, not only for creating huge cost savings but also for the effect on equal opportunity and the ability of those outside major cities to start and run successful businesses.
After two years of tremendous effort, all national-level services for businesses have now been made available online on a single, integrated platform.
And that was just the first step on the ladder. With this new government-as-servant mindset, the Production Simplification Secretariat which I lead started work on changing the legal framework for business in a new interdisciplinary way, working with a team of engineers, technologists and lawyers.
We have been leading the charge in simplifying Argentinian regulations and effecting culture change by introducing regulatory impact analysis — something that truly ground-breaking in the Argentinian context — in line with OECD standards
The idea was to change business rules to make them clear, simple and easy to comply with, with one single interpretation. Companies should not need to hire specialists to simply work out what they need do to comply with basic regulation.
During 2018, the team implemented 120 legal simplification projects relating to the production sector, including projects in the tax agency, foreign trade department, and various other national and subnational agencies.
In one state agency alone, 600 rules were repealed
Alongside this simplification strategy, old rules and laws that had no value and were simply hindering firms’ activities were also identified and repealed. In one state agency alone, 600 rules were repealed, including some legislation that had been enforced since 1898.
During their life-cycle, companies also interact with several different government agencies. From the point of view of companies, these different departments should be seamlessly understood to be a part of the very same state. Recognising this has also brought the need to create a cross-agency team with overall responsibility for ensuring the best, most user-centred practices are implemented in each agency. That team aims to build bridges, share information and create efficient communication channels between various state agencies.
Legal simplicity must go hand in hand with straightforward processes, clear inputs and outputs and non-arbitrary requirements. That means changing from a state which controls through paper to one which trusts entrepreneurs. Driving cultural change across agencies was our challenge this year. Setting clear objectives, measurable milestones, thinking about alternatives before regulating.
As the world is going forward and evolving every minute, we do not want to be left behind again. We must create clear criteria and high standards for regulation design, monitoring schemes to detect non-compliance and risk, and we must keep the spotlight on causes, not consequences.
Keep it simple.
Complexity begins in the foundations. Now we are on the road, breaking the inertia, and there is no reverse gear. — Pedro Inchauspe
(Picture credit: Unsplash)