SMART or Smart Regulation?

The ‘smart regulation’ dimension of the ‘smart economy’ has not been much discussed. Conceived of properly and implemented well smart regulation offers a way for governments to better understand and harness the different ways of mixing instruments and actors to get regulatory tasks done. It invites all stakeholders to think outside the usual boxes and then frequently re-visit institutional choices to fine tune regimes where outcomes are inappropriate.

In the Government’s White Paper Building Ireland’s Smart Economy  ‘smart regulation’ was linked to broader public sector reform. The smart regulation measures were described in the following way:
‘Reduce the administrative burdens for citizens  and improve the quality of regulation  through tools such as e-government,  regulatory impact analysis and by enhancing the accessibility of the statute book.’

In essence this usage is consistent with that of the Canadian Government’s 2004 Smart Regulation programme which adopted a business usage of the acronym SMART – Specific, Measurable, Attainable, Realistic, Timely. The best examples of SMART regulation, in this sense, involve reviewing proposed and existing regulatory rules to ensure they are proportionate to the aims sought and targeting enforcement more effectively at higher risk areas of activity. These measures are the primacy focus of Better Regulation programmes adopted in Ireland and in most OECD member states.

An alternative usage of the term smart regulation, widely associated with researchers at the Australian National University (notably Gunningham and Grabosky’s well-known Smart Regulation (OUP, 1998), transcends sterile debates about whether we need more or less regulation. Rather it involves a recognition of the limits to the knowledge and capacity of governments for controlling social and economic life, together with an acknowledgement that other actors, both economic and social have important resources and knowledge relevant to regulation. It has resonance with the ideas put forward in Thaler and Sunstein’s recent book Nudge (Yale, 2008), that in some settings gentle measures to influence choices in particular directions may be more effective than mandatory rules.

The tasks within a regulatory regime involve the setting of standards, norms or rules, feedback on compliance with the norms and some mechanism for steering deviant behaviour back towards the norms. Few regulatory regimes accord to a classical model in which legal rules are monitored and strictly enforced by a regulatory agency.  Non-state actors are frequently involved in one or more of the tasks and mechanisms involved can extend beyond legal enforcement to include controls rooted in market and social behaviour. For example whilst there is legislation governing misleading advertising, many of the norms governing behaviour of advertisers are set by the private Advertising Standards Authority of Ireland. The innovative plastic bag levy is largely enforced by retailers who collect the sum of money which has substantially contributed to reducing consumer appetites for consumption of plastic bags.

As the scale and causes of the financial crisis became apparent in September last year it was reported that President Sarkozy linked self-regulation to laissez-faire and declared that both were finished. His remarks were widely interpreted to suggest a need to ratchet up classical command and control type regulation – a response reminiscent of the US response to the Enron collapse with the Sarbanes-Oxley Act in 2002. President Obama was possible signalling a more nuanced approach (smart regulation and nudges) when he recently appointed Cass Sunstein (see above) to head the US Office of Information and Regulatory Affairs.

It is possible that, to the extent that the sources of the financial crisis were governmental, they lay in an excessive expectation of what could be achieved by regulatory authorities. (It is only half in jest to suggest that the phrase ‘Regulated by Financial Regulator’ is today taken as a warning rather than a reassurance).  In practice a significant proportion of the regulatory activity in the financial sector is and will remain non-governmental in character. Key standards for financial reporting are set by the International Accounting Standards Board. In the area of money laundering the limits to government monitoring are recognised by the imposition on banks and professional services firms to monitor and report suspicious transactions. Credit rating agencies have a key role in monitoring and reporting on the financial conditions of both firms and sovereign governments. The global financial crisis reinforces the interdependence of the state with markets. Smart regulation displaces the hubristic idea that governments can control markets with the suggestion that governments should observe and seek to understand better. There are circumstances where governments and law may be the most effective means to constitute or regulate social or market behaviour. In other circumstances it may be more appropriate to acknowledge that the capacity and knowledge lies elsewhere.

Smart regulation is simultaneously more modest in what can be achieved through legislation, government departments and agencies, but more ambitious in terms of the potential for harnessing the capacities not only of businesses but also other key stakeholders such as consumer and employee groups. It recognises that setting of norms, oversight and enforcement are not state monopolies. There are national and international non-government regimes which set stringent norms in such areas as environmental protection and employment rights, and these rules are often overseen by other businesses (through supply-chain contracts), through third party certification bodies, through gatekeepers (those with capacity but not necessarily the interest to enforce) such as banks and insurance companies, through the whistleblowing activities of employees and unions, and through the reputational effects of markets (both positive where consumers prioritise compliance with norms in areas such as fair trade or environment and negative where publicised behaviour leads to boycotts).

The balance between state, market and community in regulatory governance is not simply about effectiveness in terms of outcomes, it is also about promoting legitimacy. A key government role is to use its unique capacities to align public and private values.  As has been widely observed a good deal of the trust required to operate such smart techniques as principles-based regulation over financial markets (under which market actors develop and apply a good deal of the detailed rules) has been called into question by recent events. A greater role for business actors in setting and enforcing standards may be more appropriate where the interests of business are more-or-less aligned with some version of the public interest generally. The current financial crisis has revealed that financial institutions cannot always look after even their own interests. It has also demonstrated that the banks are, to a degree, ‘hostages of each other’ (to borrow a phrase from Joe Rees’ well known study of self-regulation of the US nuclear power industry) in the sense that the failure of one adversely affects them all.

A smart solution does not necessarily involve cracking down with detailed rules and stringent agency enforcement. Aggressive medicine can, after all, kill the patient.  Smart regulation asks who has the knowledge and capacity to promote decent standards, to monitor and to correct deviations. The role for government in this new thinking is neither total nor negligible, but it is likely to depend on the knowledge and resources of others.

Author: Colin Scott

Colin Scott is Principal, UCD College of Social Sciences and Law and Professor of EU Regulation and Governance at UCD. He is a Co-Editor of Legal Studies (Wiley-Blackwell).

16 thoughts on “SMART or Smart Regulation?”

  1. If ‘Smart Regulation’ essentially means ensuring that the decision whether to intervene and the choice of intervention (economic instrument, command and control, self regulation, etc.) yields the highest possible societal welfare, I think most will agree it is a good idea. However, I am not convinced that this is always the “primary focus of Better Regulation programmes adopted in Ireland and in most OECD member states,” as you suggest.

    Some “Regulatory Impact Analysis” (RIA) programmes are quite rigorous, with a pre-defined societal welfare standard against which measures are tested, tests for the effect on competition, strict publication requirments for impact assessments and formal ex post audit arrangements.

    However, some other countries seem less concerned with subjecting regulatory decisions to objective external standards. The Irish system, for example, places most of the responsibility for the RIA process on the department that is considering the policy measure. The RIA is clearly intended to be one input to policy among many, rather than imposing a formal test that must be satisfied before a measure may be implemented. Accordingly, the test of acceptability is more general; in principle, any objectives may be specified and any measure may be justified if it meets its stated objectives. There is (permissive rather than mandatory) scope for involving other departments or agencies in the preparation of a RIA. While the Taoiseach’s Department and the Public Expenditure Division of the Department of Finance have a loosely specified role in the RIA process, the model does not include formal external review of RIAs. Many do not seem to be published promptly.

    I am not sure a system like this can ensure regulation is “Smart”, even for the new measures it covers. And there is no systematic review of the stock of existing measures in Ireland.

  2. In my Dictator-for-a-Day schedule, I’d put aside some time to make sure Ireland got into line with the rest of the EU/OECD and embraced the concept of reducing administrative burden, measuring the hours spent filling forms etc.

    It’s been a source of bewilderment to our EU colleagues that Ireland (the Dept of an Taoiseach more specifically) has been the equivalent of a climate change skeptic at Council meetings, shooting down anything that may try and sneak ‘reducing adminstrative burden by 25%’ in the back door!

  3. re. a new Institution to ensure SMART regulation in non-financial sectors.

    One question that I wonder about is do we, 4m+ people in this Republic, need the number of regulatory bodies we now have for non-financial sectors eg. electricity, gas, taxis, airports, broadcasting, telecoms.

    To what extent would we, citizens and businesses, benefit from having one Public Utilities Commission (PUC), as is common practice in many states of the US and even at some levels below that?

    While I am sure that PUCs are not perfect, we need to ensure that we have structures in place to lessen scope for regulatory capture by the sector being regulated. Why not now provide a new institutional setting where SMART regulation can work to promote more cost-effective delivery of many regulated services by public and private bodies? There might even be some savings on the normal office overheads and back-up facilities which each regulator now has.

    If a PUC is set up, I suggest that
    1) it report to the Dáil directly just as the Ombudsman and C&AG office do;
    2) there should be a deliberate and carefully implemented policy of employing people with experience and expertise from outside Ireland. This would be no different from existing public policy and practice for changing economic and private/public sector performance by bringing in people from abroad eg. the promotion of FDI in manufacturing and services, scientific and technical skills by SFI programmes, appointing non-national as the Inspectorate of An Garda Síochána, contractors for the NRA projects, the leader of the HSE cancer strategy.

    IMO, the Competition Authority must continue to ensure that competition is not stifled by the activities of a PUC. Nor would setting up a PUC lessen, in any way whatsoever, the commitments arising from international agreements and standards.

    Setting up a PUC could also be an opportunity to reform organisations that are both service providers and regulators eg. Irish Aviation Authority, local authorities role in waste management.

  4. Shut down the Central bank and Office of the Financial Regulator. Statutary redundancy get rid of everyone. No exceptions! Burn the Central Bank building to the ground.

    We are in the single currency, we dont need them….outsource the lot to the ECB. Mandate the ECB publish a full and accurate report of all institutions under their regulation and make it available online FOC.

    It will save millions and will mean we will never hear “Fair play to you Willie” comments in response to shennagians at places like Anglo again.

    Ask the ECB for a small local presence to provide local support for for all instutions whose total value/capitalisation is less than say 100M. Adopt a policy where local regulators are never stationed in their native country and will be moved every 5 or so years. Introduce a strict ethics policy for regulators on gifts, working for other institutions etc. Pay them well.

    Any institution in places like IFSC or trading internationally must be regulated by head office regardless of size or turnover.

    Circle the wagons and protect the Euro from rogue institutions.

    Provide support for the small guys while making all big players subject to common euro wide regulation. This is the opposite to what is going on, now the big outfits do what they want while the small outfits are targetted by a lazy regulator who needs easy victories.

    It will make it easier to tie in with effective global regulation.

  5. @Donal O’Brolchain: “One question that I wonder about is do we, 4m+ people in this Republic, need the number of regulatory bodies we now have for non-financial sectors eg. electricity, gas, taxis, airports, broadcasting, telecoms.”

    Where do correct ideas come from? I’m sorry; I meant Where did regulators come from? Who decided, when and why, that we needed regulatory bodies? One day we had (a) cutthroat competition, capitalism red in tooth and claw, fierce battles between providers in unregulated markets in some industries and (b) state monopoly providers in others, like the Department of Posts and Telegraphs (of blessed memory), Aer Lingus and so on. Then suddenly, without a by-your-leave, this gang of regulators sprang up. It was at about the same time as some politicians started talking about “agencies” where, before, there were civil service departments, local authorities and state-sponsored bodies. Suddenly a new set of ideas, terms and institutions was adopted by our masters, without much in the way of consultation with the Broad Mass of the Ordinary Working People (of equally blessed memory) or indeed the Plain People of Ireland (now no longer with us). Why can’t government departments do whatever regulating is needed?

    bjg

  6. I agree with Garry. But what would happen to the IFSC? International Funds Shuffle and Cleansing)

    Sorry Garry….

    http://www.dailykos.com/storyonly/2009/6/4/738852/-Rising-interest-rates-threaten-to-cut-economy-off-at-the-knees

    This article is not as deep as some economics bumpf but is perhaps the better for it? It sets out why the NaMa will not succeed in its stated objectives, but will not take away from the success of getting the executive off of its petard.

  7. Pat, I think we are in a battle for survival rather than a short term pickle and then a return to prosperity.

    And the tactics that we should be using should be appropiate…..closer to what countries use when national security is threatened. The EUR460 guarantee is the gravest threat to national security in the history of the state, (and that includes the shinners)

  8. @Sean
    You are right that most OECD member states have had difficulties implementing the kind of technical-rational oversight of rule-making which you describe. There are very limited and blunt instruments by which one part of central government is able to control another part. Where the regulatee is a big spending then funding provides a lever (though oftenpoorly targeted). Rulemaking does not, of course, require much expenditure which is part of its attraction. Research conducted by a UCD team has found that in Australia, UK and Ireland regulatory impact analysis (RIA) tends to be conducted too late to consider properly all options (including doing nothing and promoting self-regulation) so there is a tendency to prioritise making new rules over other possible ways of addressing a policy problem.
    All these considerations lead me to argue it would be more productive to place less weight on technical regulatory impact analysis and greater emphasis on learning about the dynamics of the problem sector and to consider alternatives to classical regulation, which might include enhancing or inhibiting market forces, enhancing or inhibiting community pressures as well as the do nothing and the self-regulation options. Such learning should not be restricted to policy makers, but might engage all stakeholders within a sector. There are lots of examples of regulatory regimes which appear to command confidence but with limited government involvement, notably in the environmental protection area.

  9. @ Colin

    I agree that there tends to be a systemic bias in favour of traditional regulation vs. no action, direct exchequer spending or alternative regulatory options. Doing proper market/sectoral analyses and being openminded about alternatives would of course be a good thing. The problem is that the systemic bias makes this unlikely to happen: direct expenditures have to go through the Dept of Finance, regulations do not; ‘no action’ tends to be politically expensive when the call for regulation has been triggered by a scandal; and alternatives to regulation take time to arrange and can sound indecisive to the public.

    The government needs to find ways to constrain itself to at least consider doing the right thing. That might be via a regulatory budget (but they are administratively expensive and rather crude), a serious RIA system, a review role for the Competition Authority, or some other mechanism. But if the biases aren’t corrected, good results won’t follow.

    One other cautionary thought about alternatives to regulation: self-regulation and co-regulation have not always had good results in Ireland. Where they are considered, it is vital that consumer welfare be protected. If producer interests are given control of a process that can “inhibit market forces” (as you put it), consumers are likely to come out of it worse off.

  10. This is an important post on a topic that rarely receives the attention it deserves. This relative inattention may be due partly to the “patchwork quilt” of agencies (both governmental and NGO), directives, norms, standards, methods of enforcement, etc. that regulation encompasses in the modern economy and the enormity of the topic probably discourages forensic, detailed examination.

    It may be too ambitious to construct a taxonomy of regulation, but it is, perhaps, useful to attempt to distinguish between different types of regulation. The acromymic SMART approach seeks to impose some coherence on procedures and performance in a “top-down” manner that may ignore the complexity of what lies beneath leading to unintended, but detrimental, outcomes.

    The State has a primary role in setting and enforcing standards in terms of public health and safety in the origination and provision of goods and services. This role exists irrespective of whether or not the State is involved, directly or indirectly, in the provision of goods and services. Beyond this the State retains a vital role in “regulating” transactions and markets, as expressed succinctly in the post, “to align public and private values”. In most liberal democratic, mixed economies, this broadly corresponds to a policy desire to ensure the effective functioning of competitive markets where they exist and promoting their emergence where this is possible. In the EU this is reflected in the pro-market stance of the Lisbon Agenda – not to be confused with the Lisbon Treaty.

    However, in many countries this desire co-exists uneasily with conflicting policy imperatives. These conflicts may be observed where national governments seek to maintain some measure of policy control over what they deem to be “strategic assets” or where they seek to promote “national champions” in sectors they consider to be of strategic importance in the national interest.

    Some recent and pertinent examples are the promotion and light-handed regulation of financial services in both the US and the UK as a means of expanding the global reach and pre-eminence of these sectors and the backing provided by the German and French governments for the pan-European (and global) expansion plans of their national energy giants (GdF/Suez and EdF in the case of France and E.on and RWE in Germany). And these examples are mirrored in Ireland by the State’s promotion, and hands-off regulation, of the IFSC and by the support of successive governments for the continued integration and expansion of the ESB and Bord Gais while, at the same time, mouthing platitudes about the “promotion of competition” and “better regulation”. This has led to the energy regulator being established and empowered (in effect, captured) by government to implement these policies while, at the same time, ensuring that no direct Exchequer financing is required.

    In all cases it is clear that the interests of consumers and taxpayers have been damaged seriously and this damage is evident in all other sectors where a combination of competition policy and regulation is applied – despite the unequivocal (but increasingly empty) claims that competition policy and regulation are intended to protect consumers.

    These policy conflicts take us beyond the area of classic “economic regulation” where regulation is employed as a substitute for competition in the face of the type of market failure that commonly arises in network industries or where so-called “essential facilities” have been constructed (often with direct State involvement or the grant of exclusive rights). The locus classicus for the analysis of this type of regulation remains Prof. Alfred Kahn’s magisterial “Economics of Regulation; Principles and Institutions” and it is has continuing relevance to the regulation of all types of network industries and essential facilities.

    Most regulators internationally have been influenced by the rich and wide-ranging strand of economic theory and practice emerging from the work of Kahn and others, but it is locked within the framework of classical microeconomics. (In passing, much of the analysis underpinning competition policy is similarly locked-in.) And, despite the continuous advances being made in this area, both in theory and practice, it is becoming increasingly evident that other dimensions of the practice of regulation need to be explored – not least in the light of the policy conflicts that have emerged.

    These dimensions may be addressed by drawing on the pioneering work on transaction economics by Ronald Coase, the institutional analysis developed by Douglass North and the analysis of collective action pioneered by John R Commons and subsequently developed by Mancur Olson. The key additional insights from these bodies of work are, first, the potential to separate the ability to own and trade long term rights to the use of physical facilities from the actual ownership of these facilities and, second, the fact that effective regulatory determinations of the pricing and conditions of access to these facilities emerge from adversarial disputations between the owners of these facilities and consumers (or firms and bodies representing their interests) who ultimately pay for these facilities.

    The US gas industry provides the best example internationally of the working out of the required market and regulatory arrangements. The following is a link to a paper which succinctly describes the US experience and sets it against the ineffectual EU experience:

    http://www.nera.com/image/PUB_CESSA_May2007.pdf

    It would be easy to dismiss this as an example of US exceptionalism that draws on a long history of institutional and administrative arrangements with which most other countries are unfamiliar, but the fundamental economic insights and analysis are universal.

    The key starting point is a recognition of the extent to which consumers have been atomized, disenfranchised, over-managed and manipulated not just by dominant service providers in some sectors, but by all businesses that, by virtue of their size and reach – or lobbying skills, are able to exercise some measure of market power.

    And, once this is recognized, the key challenge is to reconfigure competition policy, consumer protection policy and regulation to ensure that final consumers who, apart from external consumers of exports, ultimately pay for everything reap an equitable share of the benefits of effective competition and regulation.

    This is a daunting challenge and it is not surprising that, among those who have the potential to initiate new thinking and reform, many choose to ignore it while others find they simply do not have the stomach for the fight. However, the alternative is continued and increasing public disaffection with the economic system and increasing public disengagement from the political system.

  11. @Paul Hunt
    Reading your valuable and informative reflection I am struck by the extent to which people from different disciplines read different things or derive different conclusions from reading the same things.
    I completely agree with your proposition that institutions are of great significance, but have derived from the new institutional economics literature insights which are more focused on the costs and benefits of delegation, rather than the structure of property rights (though I agree the latter are also important):
    1. Delegation to agencies (or within firms to managers) creates risks both of drift and shirking (Jensen & Meckling, Murray Horn)
    2. There are ways to reduce agency costs through legislative and oversight measures (McNollGast)
    3. There are good reasons to delegate regulatory tasks to agencies (nothwithstanding the costs) – chiefly linked to the credibility associated with greater expertise and a degree of insulation from the world of politics (Levy and Spiller). This credibility is important for promoting long term investment.
    In the case of Ireland the credibility argument for delegating tasks to regulatory agencies applies not only to the traditional cases of network regulation (all the the more important where the state retains some holdings in network firms) but also other policy areas where an alignment between politicians and particular regulated interests is perceived. I would argue that the Food Safety Authority of Ireland provides an example and that the the response last December to the dioxins in pork by the FSAI was probably a superior long term response to the issue than was likely had ministers been in charge of the issue.
    I shall make a separate post on the growth of regultory agencies at another time.

  12. Colin,

    Thank you for taking the time to go through my (probably excessively) long post. I fully accept your admonition about selective reading and interpretation, but the topic is so huge and the opportunies to engage on it in the Irish context so few that I brazenly took the opportunity to bend the discussion a little to focus – as I suspect you may have deduced – on the area of physical infrastructure and associated services (where I have both experience and interest – primarily from an economic and efficiency perspective).

    My interest in this area in Ireland has been fuelled by the increasing costs of infrastructure services since “independent” regulation has been introduced (with the accompanying detrimental impact on Ireland’s international competitiveness), by the inadequate and inefficient provision of infrastructure in key sectors and by the requirement for increased infrastructure investment to support future economic growth and productivity.

    By having this focus I recognise I am ignoring the overlapping impact of huge swathes of regulation in the areas of health, public safety, social welfare, education and professional services. However, I do try to ensure an accompanying consideration of the behaviour of influential or dominant firms in various industries. And this leads to some consideration of the interactions between competition and consumer protection policies and regulation.

    Despite the recent announcement of some consolidation and repeal of largely redundant administrative legislation, the Better Regulation Unit in the Department of the Taoiseach seems to have run out of puff. A review of the economic regulatory environment was commissioned from EIU and Compecon in May 2007 (to report by end 2007), but seems to have disappeared without trace. I have enquired about this, but received no response. The energy white paper of 2007 promised a review of energy regulation, but, having submitted an enquiry about progress on this, I have received no response from the DCENR.

    In the meantime, the various sectoral economic regulators carry on without adequate scrutiny or accountability. The regulatory public consultation process is a pure charade. The Competition Authority has co-operation agreements with the various sectoral regulators but these primarily provide a means of preventing them stepping inadvertently on each other’s toes. Probably the most significant development is the Government decision to roll The Competition Authority and the National Consumer Agency into one body. Irrespective of any possible cost-savings, this can only be seen as a retrograde step. The consumer advocacy role of the NCA should be completely independent of the functions of the CA.

    Both in terms of structure and process sectoral economic regulation (and this includes the role of competition and consumer protection policies) is seriously flawed. I don’t want to extend this post unnecessarily by outlining the reforms required, but I look forward to your post on the growth of regulatory agencies and to further discussion of these important issues.

  13. @Brian J. Goggin (bjg)
    “Why can’t government departments do whatever regulating is needed?”
    For the same reason that a Government could not run the telephone service or the health service!
    Whatever about how civil servants are recruited, promotion favours the generalist over trained in the professions and with long experience in the differect aspects of the arts/crafts of the sectors which they are meant to regulate.
    As an example, look the CER way of regulating the electricity industry. In what way does its staffing differ from that of a Government department? How many technically qualified and industry-experienced people does it employ?
    There is a culture of generalism in many parts of the Irish governing classes. this cast of mind has brought us to where we are. Do you really bvelieve that they can get us out of it without repeating the same errors as were made before – which led to the depressions of the 1980s here?

    It is and was chaired by a (former?) civil servant was and still captured by the ESB – just as the various Government departments responsible for policy governing the

  14. @ Donal O’Brolchain on why government departments can’t regulate: “For the same reason that a Government could not run the telephone service or the health service!”

    But the government (the Dept of P agus T) did run a successful telephone service for some time, before deciding to hand it over to a state-sponsored body and ultimately to sell it off. It may be noted that the Engineering Branch was run by, recruited and trained engineers; generalists were kept in the boot cupboard somewhere, and engineers had their own career structure. Something similar applied in the Revenue Commissioners, although I understand that they have recently abolished the fine old position of Inspector of Taxes (once, briefly, held by your correspondent). And then there is the Office of Public Works, which seems to have survived the mania for modernisation, no doubt by concentrating on the distribution of piers and seed potatoes.

    It is therefore possible to have a central government department running things without having either generalists or (exceusse me while I wash my mouth out with soap) business studies types about the place.

    I find more difficulty in dealing with the health services, because they were seen as local rather than central government services. I am not sure that central government departments could be said ever to have run them.

    Comreg had at least one telecoms engineer as chair (my sister. There may have been others, but I wasn’t quite as interested in them).

    bjg

  15. @bjg
    I agree that some Government Depts used to run things well, but a rot set in…… (
    One result was that during the 1970s, the provision of a telephone service was falling seriously behind what was needed by industry, commerce, services and home owners.
    You may be old enough to remember the telephone queues/waiting lists.
    Political “pull” was such that when the telephone service was separated from the Dept, over two-thirds of those in the queue/waiting list were found to have been tagged high priority!

    During the late 1970s/early 1980s, there was some suspicion that the reason the telephone service (which is what is was – not a telecoms service) was separated from the Dept because EU funding (both ERDF and EIB funds) came with a condition that the management be improved.

    This is the kind of thing that can happen when VCs invest in new ventures.

    All that to ask, what lessons can we learn from that experience for how we manage our public affairs, now?

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