05 Dec 2019

Feasibility Study: Introducing “One-In-One-Out” in the European Commission

Final Report for the German Ministry for Economic Affairs and Energy

Andrea Renda / Moritz Laurer / Ada Modzelewska / Antonella Zarra

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The need to consolidate and streamline the stock of legislation and reduce the unnecessary costs associated with legal rules has been increasingly felt by regulated stakeholders and governments in many developed and emerging economies. In many OECD countries, including many EU Member States and Canada, Korea, Mexico, the United States, this has led governments of various political orientations to introduce forms of regulatory budgeting, in which administrations are asked to identify, whenever new provisions introduce regulatory costs, existing provisions that could be repealed or revised, thereby offsetting the cost increase. In some countries these rules have implied a one-to-one offset, whereas in other countries the provisions imposed also a reduction, as in the case of UK’s one-in-two-out and one-in-three-out rules, and the US one-in-two-out rule. This is why we generically refer to these rules as “One-In-X-Out”, or OIXO.

Overall, national experiences with OIXO rules have led to positive results: hence, many EU member states have started to advocate the adoption of a similar strategy also at the EU level. Most recently, the new President of the European Commission, Ursula von der Leyen, announced that the institution will apply the “‘One-In, One-Out’ (OIOO) principle “to cut red tape”, making it now officially part of its better regulation agenda. However, its contours and modus operandi must still be defined. Based on the results of our analysis, we developed a proposed system, which would be likely to achieve the positive results observed in member states and other OECD countries, while at the same time mitigating or fully addressing the concerns expressed by the previous Commission.

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