Flawed impact metrics jeopardize EU deregulation plans, study finds

(Press-News.org) Flawed Impact Metrics Jeopardize EU Deregulation Plans, Study Finds

A newly published peer-reviewed study has raised concerns about the evidence base behind the European Union’s long-running efforts to reduce bureaucracy for businesses, suggesting that key measurement tools are methodologically flawed and have faced little scrutiny over the years.

The study, led by Academy Research Fellow Matti Ylönen of the University of Helsinki, traces the EU’s deregulation agenda back to the 1990s, focusing on its reliance on the Standard Cost Model (SCM)—a methodology used to estimate administrative burdens on firms. Initially built on a limited number of industry interviews, the model's guidelines were further loosened in the 2010s, reducing both its transparency and reliability.

“The SCM was problematic from the start,” Ylönen explains. “But when interview requirements and data collection standards were relaxed, its shortcomings became even more serious.”

Despite these flaws, the SCM remains central to current policy. As recently as May 28, European Commission Executive Vice President Valdis Dombrovskis reaffirmed its use in setting targets for administrative cost savings.

This comes as the EU negotiates wide-reaching omnibus directives—raising concerns that deregulation could undercut hard-won rules on corporate sustainability and responsibility. With the EU’s deregulation push entering a pivotal phase, the study’s findings suggest that the evidence base behind it may be shakier than policymakers are willing to admit.

Another example is the Competitiveness Compass of the von der Leyen Commission, which has provided a key foundation for the current omnibus directives. At the heart of the EU’s simplification narrative is a striking figure: €150 billion in recurring administrative costs borne by European businesses. 
This estimate serves as the baseline for the Commission’s goal of cutting €37.5 billion in administrative costs by the end of its mandate.

“The Commission’s referencing of this estimate is worryingly vague, but it appears to stem from Standard Cost Model -related calculations conducted in the early 2000s, whose methodology and relevance for today’s situation is questionable. Strikingly, the quantification approach also conflicts with the Commission’s own conclusions from its first generation of SCM efforts”, Ylönen notes.

He refers to the 2012 report on Regulatory Fitness, which stated: “the Commission does not believe that setting global targets and/or quantitative formulae for managing the stock of legislation will produce the desired results.”

The self-criticism mirrored similar concerns raised in 2015 by the Independent Evaluation Group (IEG) of the World Bank, which has been another major 
proponent of the administrative burdens agenda. In its evaluation, IEG concluded that the SCM’s focus solely on administrative costs made it a narrow measure of social value, as it “ignores any benefits of regulation.” The IEG emphasized that the model “can only treat regulation as a burden, cost, or constraint on businesses – but never as something that enables benefits.”

Ylönen co-authored the study with Professor Tero Erkkilä, also from the University of Helsinki.

“Without a critical examination of the indicators used to justify these sweeping changes,” Erkkilä warns, “the EU risks undermining the credibility and effectiveness of its work.”

The peer-reviewed study is titled “What Sustains Flawed Indicators? Unpacking the EU’s Administrative Burden Agenda.” 
was published at the Policy Studies journal, and is freely available at http://dx.doi.org/10.1080/01442872.2025.2519297

 

Contact information:
Academy Research Fellow, Docent Matti Ylönen
Faculty of Social Sciences, University of Helsinki

Tel. / Signal / WhatsApp +358 40 723 111 8                         
email: matti.v.ylonen@helsinki.fi

 

 

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