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Reducing the administrative burden in the European Union

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  • Paul Tang
  • Gerard Verweij

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    Abstract

    The Netherlands wants to reduce the administrative burden for businesses between 2003 and 2007 with a quarter. With the aid of the so called Standard Cost Model, the burden is estimated to amount to 16.4 billion euro in 2002. This is about 3.6 % of the Dutch gross domestic product (GDP). However, a significant part of the administrative burden, over 40% of the total, is the direct result of international, mainly European legislation. This makes the reduction of the administrative burden a European issue. Besides, a reduction in one member state may affect the economies in other member states. This memorandum considers the direct and indirect effects of reducing the administrative burden on firms. Reducing the burden is expected among other things to boost investment, adding to the increase in production and labour productivity. For an individual country a unilateral reduction probably has different effects than a reduction that is part of a co-ordinated, European effort to scale down the administrative burden of government regulations. To assess the indirect effects, within the economy of the European Union and between European economies, we employ the CPBÂ’s general-equilibrium model WorldScan, which simultaneously takes account of the different product and factor markets in the world economy and which models many European economies in detail. The Netherlands is one of the very few countries, which currently has detailed information on the administrative burden of government regulations. Therefore, we assume that the key figures for the Netherlands also hold for the other member states of the European Union. This assumption implies that for the whole European Union an administrative burden exists of 340 billion euro in 2002. Better data for other member states are needed to arrive at a complete assessment of direct and indirect effects.

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    Bibliographic Info

    Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memorandum with number 93.

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    Date of creation: Aug 2004
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    Handle: RePEc:cpb:memodm:93

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    Cited by:
    1. Gelauff, George & Lejour, Arjan, 2006. "The new Lisbon Strategy: An estiamtion of the impact of reaching 5 Lisbon targets," MPRA Paper 16168, University Library of Munich, Germany.
    2. Christian Dreger & Manuel Art�s & Rosina Moreno & Raúl Ramos & Jordi Suri�ach, 2007. "Study on the feasibility of a tool to measure the macroeconomic impact of structural reforms," European Economy - Economic Papers 272, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
    3. Frank A.G. den Butter & Marc de Graaf & Andr� Nijsen, 2009. "The Transaction Costs Perspective on Costs And Benefits of Government Regulation," Tinbergen Institute Discussion Papers 09-013/3, Tinbergen Institute.

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