Regulatory improvement is a public policy that promotes higher quality of the regulatory framework in order to generate more benefits than costs and maximize social welfare. Albeit regulation is just one of the various mechanisms used by governments to intervene in economy and efficiently allocate resources when markets themselves cannot, the way which regulators design these mechanisms occasionally generates costs that can be excessive and unnecessary.
Therefore the 2007-2012 National Development Plan established the strategy to reduce costs for business opening and operation through regulatory improvement, to enhance productivity and growth of the Mexican economy, and thus accelerate the creation of better payed jobs.
Under the proposed strategy and the powers granted by the Federal Administrative Procedure Law, since its creation in 2000, the Federal Commission
on Regulatory Improvement (COFEMER) has striven to improve the regulatory framework of the economy. To do this, COFEMER performs exhaustive reviews of the regulation proposed by the federal government agencies, to promote transparency in the process of making and implementing regulation and to ensure that the benefits outweigh costs. COFEMER also performs diagnosis and provides technical assistance to states and municipalities with the purpose of institutional arrangements designed to ensure better regulation.
In recent years, economies worldwide have changed the regulatory framework ruling its markets. Rapid technological changes, the new role of government in economy and the deep globalization process experienced in recent years have led to a significant increase in regulatory activity of almost all countries. Also during 2009, the economies worldwide experienced an adverse environment, including Mexico. In this context, regulatory reform policy has been a valuable tool useful to strengthening key sectors of the economy. Regulatory intervention requires mechanisms and agencies to ensure that regulations promote the best possible functioning of markets.
Regulatory improvement was endorsed strongly under the Third Address to the Nation. President Felipe Calderón announced a list of measures to change Mexico structurally, one of them consists in conducting a substantive regulatory reform. The President was very clear about its goal: making life easier to citizens, simplifying procedures performed by companies and bringing the Government to the needs of the people.
This stressed that the regulatory improvement policy is at the center of the Federal Government's strategy to benefit the performance of markets, promote economic growth and foster job creation. In COFEMER we are convinced that regulatory reform is one of the most effective public policies to promote economic growth.