The Organisation for Economic Co-operation and Development has revealed that governments worldwide must embrace simpler, smarter, and more adaptive regulatory frameworks to meet the challenges of modern policymaking.
OECD’s latest flagship report titled ‘Regulatory Policy Outlook 2025’ emphasised the urgent need for governments to rethink how they design, implement, and review regulations to align with rapid technological change and growing demands for efficiency and sustainability.
According to the OECD, while regulation remains a vital tool for protecting citizens, encouraging innovation, and guiding economic development, many current frameworks are outdated, fragmented, and ineffective in today’s fast-evolving landscape.
OECD’s Secretary-General, Mathias Cormann, said, “To navigate today’s complex policy environment, with fast technological changes and growing demands for efficiency and effectiveness, governments need to ensure that regulatory frameworks are adaptive, efficient and proportionate.
“By tackling unnecessary regulations and ensuring regulatory frameworks are focused on better outcomes, governments can contribute to a supportive policy environment for stronger and more sustainable growth.”
The Regulatory Policy Outlook 2025 outlined key areas for improvement. Notably, it finds that governments have made headway in using digital platforms to broaden stakeholder engagement during policy consultations.
Yet, only 33 per cent of OECD countries currently provide direct feedback to participants, undermining efforts to build trust and encourage broader participation in future regulatory processes.
The report called for governments to improve transparency and inclusivity by extending consultation periods and making engagements more meaningful.
It also stressed the importance of reviewing regulations through an environmental lens. Alarmingly, only 21 per cent of OECD member states currently assess rules for their environmental sustainability impacts, even as climate change and biodiversity loss continue to worsen.
The report noted that evidence-based policy making has improved, with more governments now using regulatory impact assessments that account for economic, social, and environmental consequences.
However, implementation remained a challenge, as rules often lag behind technological advancements and suffer from jurisdictional overlaps and outdated structures.
The OECD urged countries to adopt strategic intelligence tools like horizon scanning and foresight exercises to anticipate emerging risks and technological shifts.
Also, to strengthen cross-government coordination and focus enforcement on the most pressing risks would also enhance regulatory effectiveness.
The report warned of significant regulatory gaps. It recommended that governments treat environmental regulations as a system, streamline overlapping rules, and target enforcement where the most significant ecological risks exist.
“Simpler, more streamlined, and smarter regulations not only reduce burdens on citizens and businesses but also lay the groundwork for sustainable growth, innovation, and public trust in the digital age,” the OECD noted.
