Regulatory Reform in Thailand

This section examines how effectively the Government of Thailand have integrated ex ante RIA1 into the rulemaking process ensuring that it contributes to evidence-informed decision-making. Ex ante RIA is a fundamental tool that promotes the quality of new regulations supported by an evidence-based process. The use of RIA is codified in Principle 4 of the OECD Recommendation of the Council on Regulatory Policy and Governance, which states that countries should: “Integrate Regulatory Impact Assessment into the early stages of the policy process for the formulation of new regulatory proposals. Clearly identify policy goals and evaluate if regulation is necessary and how it can be most effective and efficient in achieving those goals. Consider means other than regulation and identify the trade-offs of the different approaches analysed to identify the best approach” (OECD, 2012[1]).

The use of RIA by OECD member countries have continually grown over the past 30 years, with 34 OECD countries currently having a RIA framework according to the OECD Regulatory Policy Outlook. However, challenges remain across the OECD in the implementation of RIA, as it is often the case that is undertaken too late in the rulemaking process to have a substantive effect on policy decisions (OECD, 2021[2]).

The 2020 OECD report observed that the Thai regulatory process follows long-lasting practices that combine strong conformity with the set procedural requirements with instances of wide discretion by decision-makers in shaping both the substance of the chosen course of government action and the form to give to the underlying decision-making process. The requirement to carry out RIA in some form has existed since 2004, where it was originally established on the basis of the OECD Checklist for Regulatory Decision-Making (OECD, 2021[3]).

Subsequent reforms have strengthened the fundamental infrastructure for RIA in Thailand. Article 77 of the 2017 Constitution obliged government agencies to conduct ex ante RIA on draft legislation. These RIA obligations were further implemented by the 2019 Act on Legislative Drafting and the Evaluation of the Outcomes of Law in 2019, which stipulated establish the baseline standards for applying RIA and other regulatory management tools.

In order to assist the Thai administration in implementing a high-quality RIA framework, the OECD made a series of recommendations for reform as part of the 2020 review (set out in Box 2.1).

The legal and policy framework for RIA has remained largely as described in the OECD 2020 review, albeit with two significant extensions to the scope of RIA. The constitutional principles for GRPs in Article 77 of the 2017 Constitution have universal application to general rulemaking in Thailand i.e., to the executive, legislature, government agencies, and sub-national governments. However, the 2019 Act only mandated ex ante RIA for draft primary legislation, and not for subordinate regulations (whereas ex post review is required for both primary laws and subordinate regulations). This was an important gap in the scope of RIA, as subordinate regulations can have significant impacts upon regulated subjects.

To address this, the scope of RIA was extended in 2023 to all subordinate rules (lower than Acts of Parliament) that have impacts upon people or businesses (e.g., permits, compliance, or pre-conditions for businesses), which must now undergo ex ante RIA. This has moved Thailand closer to OECD best practice, all of whom now have the obligation to carry out ex ante RIA on at least some areas of draft legislation. Unfortunately, despite encouragement from the OCS most agencies do not share draft RIA with stakeholder through the public consultation website (law.go.th). Typically, they only publish the final RIA, after stakeholder consultation is complete (see Box 2.2 for more information).

In addition, the Parliament of Thailand is bound by the GRP principles outlines in Sections 77 and 258 of the Thai Constitution. However, the 2019 Act did not give the Parliament a specific function within the GRP policy framework e.g., there was no specific obligation for the Parliament to undertake regulatory oversight of draft RIAs produced by the executive, or an obligation to carry out RIAs in case of draft legislation produced my members of Parliament.

To address this gap in the regulatory policy framework, in October 2019, Notification 2562 was announced adding greater specificity to the framework outlines in the 2019 act.2 Notification 2562 required the Secretariat of the Parliament to carry out RIA for all legislative proposals by Members of the Parliament and members of the electoral public. The Secretariat is also required to undergo stakeholder engagement (the role of stakeholder engagement in the Thai RIA framework is discussed in Chapter 3. In addition, in August 2020 a parliamentary committee was established with the responsibility of reviewing the summaries of public consultation and RIA reports of legislative proposals, however, since member sponsored, and publicly proposed legislation is rarely successful the committee is rarely engaged.

It was clear to the OECD Team during the fact-finding mission that RIA appears to have been widely implemented across government ministries and agencies. However, data on RIA adoption rates are not yet able to be ascertained by OCS, in its role as regulatory oversight body, so it is difficult to assess RIA adoption trend since the 2019 Act was enacted.

Since 2020, the Government has made some important steps in the right direction in RIA reform. However, there remain some fundamental gaps in the institutional framework for RIA, and in ministries’ capacities to produce adequate RIA documents, which are preventing it from becoming an integral part of the policymaking process in Thailand.

OCS as the government agency in charge of regulatory oversight is responsible for providing training in RIA to government officials. The agency has designed training programmes for government lawyers with regards to the implementation of the Act.

Currently, the Advanced Legal Training Institute,3 under OCS, provides capacity training courses on effective legislation drafting for State agencies in different levels. RIA lessons have already been incorporated into such courses since the beginning of 2019. Trainings under the Institution occurs regularly throughout the year. In 2020, the Law Reform Division, under OCS, ran two separate sets of capacity training courses of about three to four days in length for in-depth RIA training, as well as another joint training program with Chulalongkorn University in Bangkok.

To support line ministries in the preparation of RIAs, OCS has produced a series of PowerPoint training slides to explain the keys steps of the RIA process to ministries. The slides provide information on techniques (e.g., the problem tree method) case studies on how to assess the need for legislation, and the potential impacts of a law. The slides point to the importance of both qualitative and quantitative evidence to be utilised in the development of a RIA. Part of the slides describe in detail how to conduct a problem analysis, including developing a baseline scenario of “no-action”, which is strongly encouraged by OECD RIA best practice. Since 2022 approximately 900 legal professionals have received this training and OCS plans to continue to train 300 per year for the foreseeable future.

The methodological approach set out in the training slides is largely qualitative in nature, apart from a section on how to calculate the potential implementation costs to government from a new law. Ministries are encouraged to assess the “Impact on the economy, society, environment and other important impacts”, whilst also considering the potential for “undesired effects or indirect costs” from a draft law. However, ministries are not obliged to employ more advanced methodologies for assessing and comparing potential impacts of different policy options, such as multi-Criteria analysis, or for quantifying potential impacts such as the Standard-Cost Model, cost-benefit analysis, or cost effectiveness analysis. The guidance also does not refer to the importance of considering different regulatory, and non-regulatory options during the RIA process.

The OECD Team also found that policy teams in ministries often do not have the analytical capacities in ministries to carry out RIA, in some cases ministries did not have a good understanding of the concepts of RIA and confused the methodology with specific steps in the process such as stakeholder consultation. Several ministries expressed the desire for greater training in RIA methodologies and there is a general need to raise awareness about RIA throughout the administration. There is a general lack of analytical expertise in areas such as economics, and officials are generally trained in law, although there are exceptions to this in parts of the administration e.g., the LRC has appointed a sub-committee comprising mainly of economists to develop the guideline under Article 17 of the 2019 Act and to conduct case studies on real examples of draft legislation.

There does not appear to be contact points, or official networks of best practice with the Thai government to provide advice to officials on RIA. However, the OECD is aware of an informal group of professionals engaged in RIA, stakeholder consultation, and ex post evaluation from various ministries who ask questions and exchange information on their experiences. Formalising such a network would follow OECD best practice, whereby certain governments have established networks of officials within line ministries to provide advice on RIA and other better regulation processes (see Box 2.3 for examples from OECD governments).

Despite Thailand putting in place a comprehensive set of ex ante RIA requirements, it appears that RIAs often are conducted as a formality, with limited impact on the legislative process. Importantly, ex ante RIA does not appear to be undertaken at an early stage of the policy process, when there is a genuine interest in identifying the best available policy solution, but instead tend to be developed before a draft law is submitted to Cabinet.

The OECD examined the Thai RIA guidance, templates, as well as a sample of RIA documents,4 and compared them against the OECD Best Practice Principles for RIA (see (OECD, 2020[6])). The analysis suggested that there is still room for enhancing the Thai framework, to move it closer to international best practices, as shall be discussed below.

In the RIA template, ministries are requested to undertake an analysis of the “Problem, Causes of the Problem and Impacts of the Problem”, and respond to two sub-questions: “What is the problem, what is the cause of the problem and what are the impacts of the problem? Why should the State intervene in this matter?”. The template does not ask ministries to present this analysis in quantitative terms, or to produce a baseline analysis examining how the problem(s) may evolve in the absence of government action, (although this referred to, along with examples of how to do this in the training slides). However, an analysis of recent RIA documents suggests that ministries are still producing qualitative problem analyses and are not developing baseline options.

The RIA template requests that ministries produce an “Objective and Goal of the Intervention”. However, scrutiny of recent RIA documents suggests that they are not producing clear, targeted objectives in a best practice format e.g., objectives that are “Specific, Measurable, Assignable, Realistic, and Time-related (SMART)”. This points to a gap in the Thai RIA policy cycle, there are still insufficient linkages between ex ante RIA and ex post review, as the absence of SMART objectives will make it very difficult to assess the effectiveness of the chosen policy option in an ex post review. The OECD 2012 Recommendation (OECD, 2012[1]) states that a RIA and ex post evaluation policy should be joined through an explicit whole-of-government regulatory policy to ensure high regulatory quality (see the section “Ex post review in Thailand”).

Whilst a Cabinet Resolution of 2017 requires government agencies to specify non-regulatory alternatives in the RIA reports, the Thai RIA templates do not direct ministries to consider regulatory and non-regulatory options. Accordingly, examination of recent RIA reports suggests that ministries generally only appear to carry out any analysis of potential impacts on a selected policy option, which may point to an ongoing reflex in ministries to regulate in response to potential policy problems.

Assessments of the potential impact of policy options are generally qualitative in nature, and there is little apparent use of more sophisticated RIA methodologies for assessing potential impacts. It should be noted that RIA should not always be interpreted as requiring a full-fledged, quantitative analysis of potential impacts, which is infeasible in most cases, given the general scarcity of analytical expertise and resources in most countries. The complexity of the analysis should be scaled to the potential impacts of the policy problem, and various methodologies can be employed to compare positive and negative impacts of regulation, including qualitative and quantitative methods, such as cost-benefit analysis, cost-effectiveness analysis and multi-criteria analysis methods (see Box 2.5 for more information).

The RIA process is lacking an effective proportionality mechanism, which would enable ministries to target their scarce analytical resources (for conducting RIA) towards those draft regulations with the highest potential impact (see sub-section “Analytical resources need to be better targeted towards high impact regulatory proposals”). This also presents a risk that analytical resources will be wasted upon potentially lower impact draft laws, thereby diluting the effectiveness of RIA as a policy tool. In an effort to address these issues OCS has been working with the OECD to design a proportionality approach fit for the Thai regulatory system.5

Current quality assurance mechanisms are also lacking and take place at a late stage of the legislative process. The Secretariat of Cabinet is empowered to review the RIA, with the power to suggest revisions or to block draft legislation; whereas OCS reviews the documents after the Cabinet has given initial approval to move forward towards a final draft. However, the officials in the Secretariat and OCS are generally composed of staff members with legal backgrounds, who do not possess the necessary analytical capacities to offer analytical insights into the quality of RIAs. Furthermore, the Secretariat and OCS officials do not possess proportionality criteria for determining which pieces of draft legislation are potentially of higher impact and require greater scrutiny. Also, whilst the Secretariat of the Parliament is now obliged to carry out RIA for all legislative proposals emanating from the Parliament, there does not appear to be regulatory oversight mechanisms, such as quality control, in place for these RIA documents.

Many OECD countries have acknowledged that not every regulation or proposal needs the same level of scrutiny. The costs and time to develop and analyse a regulatory proposal should be clearly outweighed by the positive effect that this has from improved policy decisions or regulatory quality. Therefore, it is important the resources used to develop a policy scale with the size of the problem and its solution (OECD, 2019[7]).

There has not been any progress in establishing a system of forward planning for primary or subordinate regulations in Thailand, with any legislative planning activities remaining in the hands of ministries. This was a key recommendation in the OECD 2020 review. According to OECD best practice, forward planning also gives a chance for ministries to plan where they should channel their analytical resources. It can also ensure adherence between political priorities and policy objectives as well as coherence and prioritisation of government action. It also allows stakeholders and the centre of government know what regulations are being developed in advance and plan consultations accordingly. Most countries in the OECD have instituted some form of forward planning in their rule making processes.

There also does not appear to have been significant progress in introducing an effective process of “proportionality” whereby RIA is targeted towards draft proposals with the greatest potential impact - this was another recommendation from the 2020 review. This lack of forward planning and a proportionality test is a growing issue for OCS, in its statutory role as a ROB, which has been receiving high numbers of primary bills and draft secondary legislation from ministries and agencies, for RIA quality review and legal check:

• In 2022, there were 31 primary bills and 224 pieces of draft secondary legislation.

• In 2023, there were 15 primary bills and 221 pieces of draft secondary legislation.6

In the absence of a proportionality test, it is extremely difficult for OCS to plan how much scrutiny to give a draft law or regulation, and how much time the Cabinet of Thailand should dedicate to discussing them. Furthermore, it is difficult for ministries and agencies to plan in advance for how much detailed analysis that ex ante RIAs, or even ex post reviews, should contain. An overuse of RIA may create the typical “paralysis by analysis” phenomenon or, conversely, spread constrained resources across an excessive number of initiatives. International experience suggests that full RIAs might not constitute more than 5-10 percent of the overall RIAs carried out by the government in a given year. As part of the Thailand Country Programme 2, the OECD has been working with OCS to introduce a proportionality test into the Thai regulatory policy process.7

OECD best practice suggests that effective regulatory oversight is a crucial precondition for a successful RIA process, which includes putting in place mechanisms for ensuring the quality control of RIAs (OECD, 2020[6]). Regulatory oversight bodies located at the centre of government are entrusted with a relatively broad range of functions but are the preferred location for functions where centrality is essential, such as coordination of regulatory policy and provision of guidance.

OCS was designated as the official agency in charge of regulatory oversight (or the regulatory oversight body) under the 2019 Act. This gave the agency formal responsibility for regulatory policy and related matters – capacity-building, methodology development and quality scrutiny – in addition to legal scrutiny, which it possessed before. In addition, the Secretariat of the Cabinet retains an important role in regulatory oversight, focusing primarily on conducting a preliminary completion check (i.e., checking that all documents accompanying a draft law are completed) prior to submitting to Cabinet for deliberation. The Secretariat has the power to block or return proposals for revisions if the needs arise. OCS reviews the documents after the Cabinet has given initial approval to move forward towards a final draft.

However, the quality assurance mechanisms for RIA continue to take place at a late stage of the legislative process. OCS does not have the authority to block legislation but can ask a ministry for a revised RIA. Also, OCS’s opinions on the quality of RIA are not published and made accessible to the general public. It is unclear whether the oversight functions of OCS and Secretariat are having the effect of driving up the quality of RIA, or compliance with the provisions of the 2019 Act, as statistics on RIA quality are not yet systematically collected. Also, whilst the Secretariat of the Parliament is now obliged to carry out RIA for all legislative proposals emanating from the Parliament, there does not appear to be quality control processes in place for these RIAs. There also appears to be a lack of guidance on the type of evidence considered appropriate for high impact RIAs, line ministries responsible for carrying out RIA could benefit from such guidance along with more targeted use of analytical capacity discussed above.

To help shift oversight and scrutiny earlier in the legislative process, OCS aspires to establish teams to work with ministries during the initial legislative drafting stages, to provide upfront support. However, at the current stage structural and capacity limitations mean OCS can only provide such support on a reactive basis, when requested. Informally, OCS have been working with various Thai agencies to implement RIA guidelines and methods, including with the Bank of Thailand and the Securities and Exchange Commission. However, the Thai government does not currently have a functioning forward planning system, nor proportionality criteria, whereby OCS and Secretariat would understand which laws and regulations are coming down the line, and determine where to focus greater scrutiny (see sub-section “Analytical resources need to be better targeted towards high impact regulatory proposals”). In addition, the officials in the Secretariat and OCS are generally composed of staff members with legal backgrounds, who may not possess the necessary analytical capacities (e.g., economics) to offer analytical insights into the quality of RIAs.

There is currently no formal requirement for Ministers of responsible regulatory agencies to review and sign off on RIA summaries. This is an important aspect of ensuring accountability of both the bureaucracy and elected officials and it is a standard OECD practice as 27 OECD countries require such sign off for all primary regulations (OECD, 2020[6]). Ministerial sign-off ensures that elected officials are holding the bureaucracy to account by ensuring that the bureaucracy provides the best, evidence-based advice available and ministers have the power to request further analysis should the feel they have insufficient information to take a decision. On the other hand, once ministers have signed off on and RIA summary and such summaries are published, the public is able to hold the government accountable for the decisions they have made because the public now has insight into the evidence that went into the decision. This dynamic can also serve to increase the legitimacy of regulatory policy through greater transparency and increased public scrutiny which can in turn lead to increased compliance.

Thailand has made progress in making reforms to the ex ante RIA framework to shift it closer to OECD best practice, in particular through expanding the scope of RIA to subordinate regulations, and the introduction of RIA processes within the Parliament. Despite this progress, many of the recommendations set out in the OECD 2020 review continue to stand. Ex ante RIA remains a formal process in the Thai rulemaking process, being produced too late in the process, and not having a substantive effect upon policy decisions.

Efforts have been made to build RIA capacity, but this capacity should be deepened to develop greater understanding of more advanced analytical techniques, including greater economics capacities within ministries. Regulatory oversight, especially quality control for RIA, should take place at an earlier stage of the policy process, to support ministries efforts in developing RIA processes, and would be strengthened by bolstering the analytical capacities within OCS. Thailand could benefit from a forward planning process, and a proportionality test, to ensure RIA is targeted towards draft proposals with the greatest potential impact.

In light of these findings, the following recommendations, some of which were included in the OECD 2020 review, could be taken forward by the Government of Thailand:

• Institute a forward planning process: Thailand should establish a forward planning system or regulatory agenda, by putting in place a clear rolling calendar for the development of new laws and regulations. Most OECD countries plan one year in advance however some extend this horizon further out. The forward plan will specify the time implications of conducting stakeholder consultation and RIA. The plan could be used by OCS, as oversight body, to determine which upcoming draft laws or regulations will require greater RIA quality checks, and discussion by Cabinet. Forward legislative planning also assists stakeholders in preparing evidence-based submissions when the policy is opened to consultation, the lead time enables them to gather the necessary data as well as input from industry members and other concerned groups.

• Institute a proportionality test: To improve the implementation of the RIA model in Thailand, the introduction of a “triage” system is proposed. A triage system would ensure the proper allocation of resources and time needed to support the impact assessment. Ministries could be obliged to complete a short template on their legislative proposal and early ideas about potential impacts, to be shared with OCS. On the basis of this template, OCS could make the following decision:

  • An exemption from RIA may be allowed (e.g., national security proposals).

  • It may signal that a “light” RIA will be sufficient to create the needed evidence for the policy decision.

  • A “full” RIA might be required due to the relevance of regulation in analysis.8

• Increase awareness of RIA and its standards to ensure that line ministries understand the purpose of the exercise is to provide decision makers with the best possible evidence available to them. This will ensure that individual steps of RIA will not be confused with RIA itself. It could also be helpful to provide RIA practitioners within the line ministries with guidance on what type of evidence is acceptable to inform high impact RIA statements.

• Strengthen regulatory oversight of ex ante RIA, in particular quality control and accountability, by:

  • implementing OCS’s plans to move oversight and scrutiny to an earlier point in the legislative process, to establish teams to work with ministries during the initial legislative drafting stages, to provide upfront support. This will move oversight from being merely a “watchdog” function to a more supportive coaching function.

  • utilising a future forward planning process, and proportionality test to determine which ex ante RIAs require greater levels of scrutiny from OCS and the Secretariat to the Cabinet.

  • enabling OCS to provide public, published advice on the quality of the evidence supporting ex ante RIAs for laws deemed to be high impact, including publishing the RIA itself.

  • providing regular assessments of the overall quality of the RIA process across government and communicate the results with the parliament and the public.

  • further strengthening of the capacity of OCS to scrutinise the evidence base of RIAs by working closely with economists and other experts in data science.

  • Requiring Ministerial sign off on RIA summaries to ensure that both the bureaucracy and elected officials are accountable to the public, and that the policy-making process is transparent and legitimate.

Implement further methodological revisions to OCS RIA Guidelines particularly with regard to:

• Revising the RIA template to insist upon:

  • the development of a baseline analysis during the problem analysis at the start of the RIA process.

  • insist upon measurable SMART objectives to facilitate the future evaluation of the effectiveness of the chosen policy option, including quantitative measurements where possible.

  • the identification, appraisal and comparison of multiple options, including non-regulatory alternatives to address the problem at stake, including revising the template.

• Outlining more advanced analytical methods to assess potential impacts including qualitative approaches (e.g. multi-criteria analysis) and quantitative approaches (e.g. cost-benefit analysis and cost-effectiveness analysis).

• Consider – in the long run – the opportunity to further strengthen the interface between ex ante RIA and ex post reviews (to be discussed in more detail in the section “Ex post Review”).

• Establish Better Regulation Units within ministries and agencies, to champion regulatory policy; and mainstream GRPs within their administration; and liaise with OCS on the overall implementation of the reform (see Box 2.3). In addition, an informal “Better Regulation Network” could be established across various ministries and agencies, to exchange ideas, share experiences, and promote good practices on evidence-based decision-making.

[5] Ministry of Justice and Security (2023), Policy Compass, https://www.kcbr.nl/beleid-en-regelgeving-ontwikkelen/beleidskompas/hulppaginas/contact.

[2] OECD (2021), OECD Regulatory Policy Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/38b0fdb1-en.

[3] OECD (2021), Thailand Regulatory Management and Oversight Reforms: A Diagnostic Scan, OECD Reviews of Regulatory Reform, OECD Publishing, Paris, https://doi.org/10.1787/2dbaa2e5-en.

[6] OECD (2020), Regulatory Impact Assessment, OECD Best Practice Principles for Regulatory Policy, OECD Publishing, Paris, https://doi.org/10.1787/7a9638cb-en.

[4] OECD (2020), Review of International Regulatory Co-operation of the United Kingdom, OECD Publishing, Paris, https://doi.org/10.1787/09be52f0-en.

[7] OECD (2019), A closer look at proportionality and threshold tests for RIA – Annex to the OECD Best Practice Principles on Regulatory Impact Assessment, OECD Publishing, Paris, https://www.oecd.org/regreform/Proportionality-and-threshhold-tests-RIA.pdf.

[1] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, OECD Publishing, Paris, https://doi.org/10.1787/9789264209022-en.