Imrecon has developed and pioneered policy simulation tools suitable for Impact Assessments (IAs).

IAs are now an embedded feature of policy-making in much of the world and acknowledged as a key policy tool by regulatory reform programmes in bodies such as the EU and OECD.

IA is a systematic policy tool used to examine and measure the likely benefits, costs and effects of new or existing regulation to assist policy decision makers (OECD), a continuous, evidence-based process to help the policy-maker fully think through and understand the consequences of policy throughout the policy-making cycle (UK BERR, Impact assessment guidance).

Conceptually, of course IA is a good thing - who wouldn't check that the policy has the intended effects?  And the words "systematic", "continuous" and "evidence-based" resonate with the intentions of all good policy-makers, who may always have been doing IA quite naturally.

A formal IA requirement signals that a high standard of regulatory practice should be the norm.

How Imrecon helps

The ideas behind IA lie at the heart of what Imrecon does.  The purpose of its policy analysis and policy modelling is to inform good policy-making in a structured, systematic, evidenced way, continuously throughout the process.

Imrecon identifies strongly with the principles of IA, but believes the IA requirements do not always translate well for economic regulators.  Indeed, not all regulators formally report IAs for their core policy decisions.

Assessing the costs and benefits of an incentive regime requires monetised predictions of behavioural responses, which is not straightforward.  Instead, Imrecon believes IA can be more effective if it first focuses on optimising metrics of incentive effectiveness before translating into overall costs and benefits.  If incentive effectiveness of Regime A is greater than Regime B, the policy maker would have a reasoned basis for concluding that the net benefit of Regime A will be greater too.

Imrecon has developed and pioneered policy simulation tools to measure incentive effectiveness for this kind of purpose.