Small business

2.4 Establishing criteria for regulatory intervention and review
Objective: To set targets for regulatory intervention aimed at ensuring a level playing field for SME development.
Regulations for the SME sector should be based on the same general principles as other regulations and
laws: protection and enhancement of the rights and liberty of individual citizens in society and promotion
of a safe and healthy environment. Specific criteria for the development of effective regulation for the
sector include:
• Broad support of the public and the business community. Education and information can help increase
support for compliance;
• Regulation must be enforceable;
• Regulations must be easily understood to ensure effectiveness and compliance.
• There should be awareness of ‘opportunity costs’. Very strict regulations can encourage SMEs to stay
in the informal sector; 
• Legislation should not interfere with decisions that individuals should make themselves; 
• Regulations should seek to reconcile contradictory policy objectives;  
• Legislation must provide clear and identifiable accountability. This is particularly important when
private companies are given responsibility for former public services.
A checklist of the principles of transparency, accountability, proportionality, consistency and targeting
is presented in Annex 3.