Written by Meenakshi Fernandes and Aleksandra Heflich.
Why this study?
Recent years have witnessed a number of disruptive events and developments that have generated significant and sometimes transformational impacts on society. Examples include the global financial crisis in 2008, the Brexit referendum results in 2016 and the outbreak of the coronavirus pandemic in 2020. Current policy design and assessment tools seem to be ill-equipped to deal with the risks such events may entail. Moreover, Better Regulation tools such as ex-ante impact assessment and stakeholder consultation have often been sidelined due to the urgency to act.
Policy-makers are increasingly seeking to ‘future proof’ policies. In October 2021, the Organisation for Economic Co-operation and Development (OECD) called on governments to enable the development of agile and future-proof regulation. In November 2021, the European Commission issued a revised Better Regulation Guidelines and Toolbox that promotes the integration of strategic foresight into EU policy-making. Stress-testing is a strategic foresight method that appears particularly suitable for reinforcing the resilience and robustness of policies and legislation in view of unexpected shocks that could plausibly occur in the future. In a nutshell, stress-testing involves a critical assessment of a piece of legislation’s preparedness for the advent of disruptive events and developments. For example, would EU legislation concerning legal migration continue to function as intended if the internet failed? What elements in the legislation would support its resilience in the face of such an event? What additional elements could promote the legislation’s resilience to the event?
This study presents a practical methodology to stress-test EU legislation. This methodology can be applied to different policy areas and for different types of EU legislation (e.g. directives, regulations and recommendations). It draws on the lessons learnt and recommendations made following independent research led by Dr Tine Andersen of the Danish Technological Institute (see Annex – DTI Study). The research encompassed a comprehensive literature review, in-depth research in four countries with advanced foresight practices (Finland, the Netherlands, New Zealand and the United Kingdom), and a pilot-test for three policy areas (robotics and artificial intelligence (AI), information and consultation of workers, and competition policy – State aid).
Stress-testing policies against a small number of disruptive events is achievable in a limited timeframe and can generate added value for the EU law-making process. Stress-testing can help to identify weak points or gaps for closer scrutiny in EU legislation, which could be addressed via proposed amendments or new legislation.
In combination with strategic foresight, stress-testing can be applied most notably in the agenda-setting phase, but also in other phases of thelegislative cycle. It requires dedicated effort to carry out exercises and to maintain ties and communication with relevant institutions and networks. Stress-testing exercises should engage policy-makers and stakeholders at key points in the process. Following these guidelines could promote the relevance of the stress-testing exercise and its outcomes for EU law-making.
This study presents a step-by-step approach to carrying out stress-testing on EU policies. This approach draws on a range of expertise, tools and methods, including legal analysis, strategic foresight, regulatory policy analysis, narrative storytelling, online stakeholder engagement and SWOT (strength/weakness/opportunity/threat) analysis.
The European Parliament should consider the use of stress-testing to support its law-making and scrutiny activities and bolster its role as co-legislator. The organisational arrangements to facilitate the uptake of stress-testing could be inspired by examples from national parliaments. This study highlights the example of Finland, where the national Parliament includes a Committee for the Future.
Stress-testing in the European Parliament should ensure a participatory and transparent approach with other EU institutions and stakeholders. The stress-testing methodology, presented and discussed in this study, will be extended to other policy areas and legislation at different stages of its policy life-cycle. For this reason and to assist the European Parliament in using the methodology, the European Parliamentary Research Service (EPRS), will continue the stress-testing project in the second half of the ninth parliamentary term.
Read the complete study on ‘How to stress-test EU policies: Building a more resilient Europe for tomorrow‘ in the Think Tank pages of the European Parliament.