There is no generally accepted definition of regulation. More often than not the term denotes a diverse set of tools used by the Governments to set the rules affecting businesses, citizens or other groups. Apart from laws, it embraces both formal and informal decisions and other rules and regulations, generated by different levels of government, but it also includes those rules as introduced by non-governmental or self-regulatory bodies, to which the Government has delegated a portion of its regulatory prerogatives. Regulation as such shall be regarded as the basic area of the state action. Despite a trend toward deregulation, recent developments and needs have reinforced the function of State as regulator. The “Regulatory State” introduces quite a number of regulations, regulating, in particular, environmental protection, consumers’ rights, property rights, integration into the global economic community, or control of new technologies. The regulatory reform itself denotes changes leading to the improvement of the quality of regulation. Regulatory reform may denote the review of individual clauses, amendments, alteration and updating of existing regulations and its associated institutions. It may mean improvements in the regulatory process. It may also mean deregulation, which entirely or partially abrogates regulation in certain sectors.
The decision to introduce a new regulation or amend an existing one should be based on appropriate analysis and the use of quality data. However, decisions are not always based on unbiased information providing adequate evidence in favor of or against such an amendment or new regulation, and the introduction of inadequate solutions and unnecessary regulations may result. The basic objective of regulatory impact assessments is the reduction of unnecessary regulation by taking a number of possible alternatives into consideration. Regulatory impact assessments are used in many countries to improve the quality of new regulations and prevent the introduction of unnecessary regulations (the “flow” problem). However it is important to consider the new regulation within the context of the existing stock of regulations. If RIA is used for the “new” regulation, only, solutions to the existing problem could be rather restricted and depend on to what extent such new regulations to which RIA is applied should remove current obstacles.