Economists call for regulatory rethink
The OECD says governments must overhaul their regulatory frameworks to ensure they are adaptive, efficient and fit for purpose in an era of technological disruption and climate urgency.
The global economics body is urging the infrastructure sector to embrace smarter, more adaptive and risk-based regulation to streamline project delivery, support innovation, and accelerate the green transition.
The report finds that regulatory systems still lag behind in areas critical to infrastructure planning, environmental protection, and innovation.
According to the OECD’s Regulatory Policy Outlook 2025, regulators should shift away from reactive, fragmented rulemaking and embrace anticipatory, data-driven approaches that can deliver better outcomes for people, businesses and the environment.
“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 to underlying policy objectives,” said OECD Secretary-General Mathias Cormann.
Only 21 per cent of member countries apply a systematic environmental sustainability lens across their entire regulatory landscape, despite mounting pressure to accelerate the green transition.
Infrastructure sectors such as energy, transport and water are particularly affected by outdated, overlapping or inconsistent rules, which can delay permitting and discourage investment.
Case studies in the report highlight how licensing complexity continues to hinder the rollout of sustainable infrastructure, such as hydrogen refuelling stations and renewable energy projects.
The OECD points to risk-based regulatory enforcement and digital tools such as real-time data analytics as opportunities to reduce burdens without compromising standards.
The Outlook also underscores the value of strategic foresight and horizon scanning to anticipate emerging technologies and market shifts.
However, fewer than half of OECD countries currently allow regulators to use risk criteria to prioritise enforcement actions – a missed opportunity to focus resources where non-compliance would have the greatest impact.
To support sustainable infrastructure delivery, the report calls on governments to streamline rules, invest in regulatory capacity and co-ordination, and move towards outcome-focused regulation that supports long-term policy goals while remaining agile in the face of change.
