Financial and economic justification of draft laws in EU countries

Each legislative initiative is aimed at achieving a certain result in a particular area of public life. A responsible and systematic approach to the development of such initiatives requires an impartial assessment of the future consequences and potential effects of their implementation. This is of particular importance during the process of implementation of economic policy due to the existence of interconnected links between its components, and legislative influence on one of them inevitably leads to shifts in the entire mechanism. Therefore, a complex impact assessment makes it possible to substantiate the possibility of a legislative initiative to achieve the expected result, as well as to check its compliance with the interests of society or its individual groups.

In order to identify the best international practices in impact assessment of legislative initiatives that could serve as a roadmap for Ukraine, this report includes a summarized current approach of the European Commission to organizing and conducting impact assessments, as well as the experience of certain EU countries - Estonia, the Czech Republic and Slovakia - which, according to OECD monitoring, have achieved considerable success in that respect. Namely, the survey includes the basic principles of exploitation and the importance of this tool in improving the efficiency of regulatory practices in the EU. The research outlines the procedural aspects of assessing the impact of legislative initiatives and approval of relevant reports. It also provides information on the criteria and requirements for the impact assessment of legislative initiatives in European practice.

The survey contains particular methodological approaches to financial and economic calculations in assessing the impact of legislative initiatives, as regards the cost-benefit analysis, mathematical modeling, multi-criteria decision analysis, life cycle assessment, etc. Furthermore, it includes different approaches to determining the cumulative effects of legislative initiatives (such as SWOT analysis, least-cost analysis, cost-benefit analysis, and counterfactual analysis), as well as the European Commission's recommendations on the expediency of their use in certain cases.

The research highlights the difficulties faced by EU countries on the way to achieving the common European standards during the impact assessment of legislative initiatives.

The survey aims to summarize the best practices of EU, as well as its member states, related to impact assessment of legislative initiatives, and to identify:

• organizational aspects of the analysis of the expected impact of legislative initiatives, preparation and approval of relevant reports;
• criteria and requirements for the content part of the impact assessment of legislative initiatives;
• methodological approaches used for financial and economic calculations of the expected effects of legislative initiatives implementation.