Analytical Techniques (such as cost-benefit analysis)
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Chris Nixon and John Yeabsley “Voyage of Discovery: How do we Bring Analytical Techniques to State Driven Behaviour Change?” (Cross-cutting theme paper prepared for the NZ Law Foundation Regulatory Reform Project, 2013). Different types of modelling approaches can assist in understanding the strength of the relationship between each factor and economic growth. Computable general equilibrium (CGE) and cost benefit analysis (CBA) have the capacity to examine the wider system and show how a change in the regulatory environment impacts on economic growth or the various costs and benefits of a policy change. An econometrically estimated Vector Autoregressive model (VAR) model can also be used to examine the macroeconomic impacts. Cost utility analysis (CUA), choice modelling, and contingent valuation methodologies can also indicate society's willingness to pay (or willingness to accept) approach(es) in specific cases where market prices and stakeholders' revealed preferences are not directly observable. Choice modelling and contingent valuation can also be used as part of CBA. Cost effectiveness analysis (CEA) sets out the most cost effective way of delivering a project or regulatory change. Econometric analysis uses statistical methods for estimating the strength of economic relationships (the strength of the arrows in Figure 2). It is therefore a useful tool that can be used to test various economic theories and evaluate the effectiveness of policies.
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Kate Tokeley “Consumer Law and Paternalism: A framework for policy decision making - Further Analysis” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). This suggested framework for working through the issues about the legitimacy of paternalism is not the same as applying a traditional economic cost-benefit analysis to the problem.[24] An economic cost-benefit analysis assesses the costs and benefits of a given proposal and determines whether the benefits outweigh the costs. It usually calculates the costs and benefits into a single scale value (often a monetary value). It can also be a useful tool for comparing the costs and benefits of various different factual and counterfactual scenarios. For example, a cost-benefit analysis could be used to compare a factual case that a particular consumer problem should be dealt with by using only a specific soft paternalistic legislative intervention (a nudge) with a counter-factual case that advocates a specific hard paternalistic measure (some form of coercion). A cost-benefit analysis might indicate that the factual has the advantages of having lower implementation and enforcement costs and retains a higher degree of consumer responsibility and choice. It may also show that the counter-factual has the benefits of more effectively reducing harm to consumer health but that the implementation and enforcement costs are higher. Nevertheless, it is difficult to use a cost-benefit analysis to answer the baseline philosophical question about the legitimacy of using any kind of legislative intervention that has the goal of paternalistically interfering with consumer freedom of choice.[25]
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Susy Frankel, Meredith Kolsky Lewis, Chris Nixon and John Yeabsley “The Web of Trade Agreements and Alliances, and Impacts on Regulatory Autonomy” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). In this chapter we cannot say which type of agreement is "better" for New Zealand as a conclusive rule applicable in all circumstances. That can only be determined with a detailed analysis of the costs and benefits associated with each issue within a trade agreement. Also, New Zealand is involved in a variety of both types of agreements and many trade agreements have elements of both top-down and bottom-up characteristics, for example, Closer Economic Relations (CER) occurred because the Australians had had enough of the transaction costs and lack of progress associated with New Zealand Australia Free Trade Agreement (NAFTA) – the prescribed top-down element. Consequently the final agreement and subsequent agreements under the umbrella of CER have been collaborative arrangements with many characteristics of bottom-up processes.[20]
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Susy Frankel, Meredith Kolsky Lewis, Chris Nixon and John Yeabsley “The Web of Trade Agreements and Alliances, and Impacts on Regulatory Autonomy” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). To explore these costs and benefits further we have undertaken a detailed analysis, as an illustrative example, of the regulation of patents that have had or might have their term extended from the standard term. This example is used to illustrate the pitfalls of the top-down FTA approach in circumstances where New Zealand arguably has a distinct national interest (different from its trading partners).[21] We emphasise that patent term extension is an illustrative example. We have chosen patent term extension, and where appropriate also discuss other aspects of patent protection, to provide an example of the competing effects of top-down FTAs compared to the bottom-up regulatory cooperation process.
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Susy Frankel, Chris Nixon, Megan Richardson and John Yeabsley “The Challenges of Trans-Tasman Intellectual Property Coordination” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). To assist in judging whether harmonisation or coordination will be beneficial we have adapted decision criteria from Nixon and Yeabsley.[6] The key judgments that need to be made for trade marks, patent examination and parallel importing are: (a) How simple are the arrangements? (b) How much certainty is required? (c) How much influence on the decision making is required? (d) How much flexibility is required to accommodate one-offs and unique situations? (e) How feasible is the option?